Exhibit 99.1



Report of Independent Registered Public Accounting Firm



The Partners

MeriStar Hospitality Operating
Partnership, L.P.:



Under date of March 15, 2005, we reported
on the consolidated balance sheets of MeriStar Hospitality Operating Partnership, L.P. and subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of operations, partners capital and cash flows for each of the
years in the three-year period ended December 31, 2004, included in MeriStar Hospitality Operating Partnership, L.P.s annual report on Form 10-K for the year 2004. Our audits were made for the purpose of forming an opinion on the consolidated
financial statements of MeriStar Hospitality Operating Partnership, L.P. and subsidiaries taken as a whole. The consolidating information is presented for purposes of additional analysis of the consolidated financial statements rather than to
present the financial position, results of operations and cash flows of the individual companies. The consolidating information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and, in our
opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.



/s/    KPMG LLP



McLean, VA

March 15, 2005



---

Exhibit 99.1



MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|------------------------------------------------- |  | --------------------------- | ---------- | - | -------------------------- | --------- | - | ----------------------------- | ------ | ------------------------------ | ------ | ------------------ | -- | ------------------ | -- | ------------- | ----- | ------------------- | ------ | - | ------------------- | ------ | - | ------------------ | ------- | -
|                                                  |  | MeriStarHospitality OP,L.P. |            |   | Non- GuarantorSubsidiaries |           |   | MeriStarLexingtonMortgage,LLC |        | MeriStarLexingtonPartners, LLC |        | MeriStarSub 7C,LLC |    | MeriStarSub 8G,LLC |    | AGH UpreitLLC |       | MeriStarSub 6H,L.P. |        |   | MeriStarSub 8F,L.P. |        |   | MeriStarSub 8B,LLC |        
|Assets                                            |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|Property and equipment                            |  | $                           | 22,301     |   |                            | 1,476,952 |   |                               |       |                                |       |                    |   |                    |   |               |      |                     | 10,885 |   |                     | 13,687 |   |                    | 88,943  |  
|Accumulated depreciation                          |  |                             | (14,642    | ) |                            | (286,652  | ) |                               |       |                                |       |                    |   |                    |   |               |      |                     | (783   | ) |                     | (3,179 | ) |                    | (14,741 | )
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|                                                  |  |                             | 7,659      |   |                            | 1,190,300 |   |                               |       |                                |       |                    |   |                    |   |               |      |                     | 10,102 |   |                     | 10,508 |   |                    | 74,202  |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                               
|Restricted cash                                   |  |                             | 55,754     |   |                            | 1,346     |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Investment in affiliate                           |  |                             | 2,492,499  |   |                            | 7,992     |   |                               | 40,393 |                                | 9,487  |                    | 32 |                    | 72 |               | 2,989 |                     |       |   |                     |       |   |                    |        |  
|Due to/from subsidiaries                          |  |                             | (1,106,110 | ) |                            | 522,427   |   |                               | 709    |                                | 750    |                    |   |                    | 9  |               | 73    |                     | 7,830  |   |                     | 6,748  |   |                    | 31,376  |  
|Note receivable from subsidiaries                 |  |                             | 221,704    |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Insurance claim receivable                        |  |                             | 76,056     |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Prepaid expenses and other assets                 |  |                             | 31,287     |   |                            | (3,841    | ) |                               |       |                                |       |                    |   |                    |   |               |      |                     | (11    | ) |                     | (81    | ) |                    | (101    | )
|Accounts receivable, net                          |  |                             | 9,596      |   |                            | 1,054     |   |                               | 740    |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Cash and cash equivalents                         |  |                             | 41,224     |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|                                                  |  | $                           | 1,829,669  |   |                            | 1,719,278 |   |                               | 41,842 |                                | 10,237 |                    | 32 |                    | 81 |               | 3,062 |                     | 17,921 |   |                     | 17,175 |   |                    | 105,477 |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|Liabilities and Partners Capital                 |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|Long-term debt                                    |  | $                           | 841,976    |   |                            | 471,781   |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Notes payable to MeriStar Hospitality Corporation |  |                             | 203,977    |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Accounts payable and accrued expenses             |  |                             | 14,777     |   |                            | 5,128     |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     | 6      |   |                    |        |  
|Accrued interest                                  |  |                             | 38,683     |   |                            | 2,214     |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Due to Interstate Hotels & Resorts                |  |                             | 11,347     |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Other liabilities                                 |  |                             | 5,382      |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|                                                  |  |                             | 1,116,142  |   |                            | 479,123   |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     | 6      |   |                    |        |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|Minority interests                                |  |                             | 2,418      |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Redeemable OP units at redemption value           |  |                             | 19,187     |   |                            |          |   |                               |       |                                |       |                    |   |                    |   |               |      |                     |       |   |                     |       |   |                    |        |  
|Partners capital - Common OP Units               |  |                             | 691,922    |   |                            | 1,240,155 |   |                               | 41,842 |                                | 10,237 |                    | 32 |                    | 81 |               | 3,062 |                     | 17,921 |   |                     | 17,169 |   |                    | 105,477 |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  
|                                                  |  | $                           | 1,829,669  |   |                            | 1,719,278 |   |                               | 41,842 |                                | 10,237 |                    | 32 |                    | 81 |               | 3,062 |                     | 17,921 |   |                     | 17,175 |   |                    | 105,477 |  
|                                                  |  |                             |            |   |                            |           |   |                               |        |                                |        |                    |    |                    |    |               |       |                     |        |   |                     |        |   |                    |         |  



1



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------- | -
|                                                  |  | MeriStarSub 1C,LLC |   |  | MeriStarSub 8E,LLC |   |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |   |  | MeriStarSub 5R,LLC |   |  | MeriStarSub 8A,LLC |  | MeriStarSub 6D,LLC |   |  | MeriStarSub 6E,LLC |   |  | MeriStarSub 4E,L.P. |  
|Assets                                            |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|Property and equipment                            |  | 27,485             |   |  | 16,028             |   |  | 10,034             |   |  | 11,800             |   |  | 17,581             |   |  |                   |   |  |                   |  | 18,367             |   |  | 49,971             |   |  |                    |  
|Accumulated depreciation                          |  | (7,319             | ) |  | (3,618             | ) |  | (413               | ) |  | (723               | ) |  | (4,384             | ) |  |                   |   |  |                   |  | (3,377             | ) |  | (11,560            | ) |  | (1                  | )
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|                                                  |  | 20,166             |   |  | 12,410             |   |  | 9,621              |   |  | 11,077             |   |  | 13,197             |   |  |                   |   |  |                   |  | 14,990             |   |  | 38,411             |   |  | (1                  | )
|                                                  |  |                    |   |  |                    |   |  |                    |   | 
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Investment in affiliate                           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 43                 |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Due to/from subsidiaries                          |  | (4,175             | ) |  | 7,517              |   |  | 3,135              |   |  | 5,022              |   |  | 6,581              |   |  | (43                | ) |  |                   |  | 9,328              |   |  | 22,758             |   |  | 7,015               |  
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Insurance claim receivable                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Prepaid expenses and other assets                 |  | (190               | ) |  | (26                | ) |  | (12                | ) |  | (77                | ) |  | 2                  |   |  |                   |   |  |                   |  | (21                | ) |  | (93                | ) |  |                    |  
|Accounts receivable, net                          |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  | 124                |   |  |                   |   |  | 64                  |  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|                                                  |  | 15,801             |   |  | 19,901             |   |  | 12,744             |   |  | 16,022             |   |  | 19,780             |   |  |                   |   |  |                   |  | 24,421             |   |  | 61,076             |   |  | 7,078               |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|Long-term debt                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Accounts payable and accrued expenses             |  | 59                 |   |  |                   |   |  | 153                |   |  | 1                  |   |  | 211                |   |  |                   |   |  |                   |  | (21                | ) |  | (20                | ) |  | 5                   |  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|                                                  |  | 59                 |   |  |                   |   |  | 153                |   |  | 1                  |   |  | 211                |   |  |                   |   |  |                   |  | (21                | ) |  | (20                | ) |  | 5                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|Minority interests                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Partners capital - Common OP Units               |  | 15,742             |   |  | 19,901             |   |  | 12,591             |   |  | 16,021             |   |  | 19,569             |   |  |                   |   |  |                   |  | 24,442             |   |  | 61,096             |   |  | 7,073               |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  
|                                                  |  | 15,801             |   |  | 19,901             |   |  | 12,744             |   |  | 16,022             |   |  | 19,780             |   |  |                   |   |  |                   |  | 24,421             |   |  | 61,076             |   |  | 7,078               |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |  



2



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ |  | ------------------- |  | ------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------------------- | -
|                                                  |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |   |  | MeriStarSub 6G,LLC |   |  | MeriStarSub 8C,LLC |  | MeriStarSub 4C,L.P. |  | MeriStarSub 4H,L.P. |  | MeriStarSub 7E,LLC |   |  | MeriStarSub 3D,LLC |   |  | MeriStarSub 1A,LLC |   |  | MeriStarSub 7AJointVenture |  
|Assets                                            |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Property and equipment                            |  | 20,404             |   |  | 18,560              |   |  | 24,167             |   |  |                   |  |                    |  | 1                   |  | 20,118             |   |  | 22,986             |   |  | 5,500              |   |  |                           |  
|Accumulated depreciation                          |  | (4,557             | ) |  | (591                | ) |  | (5,738             | ) |  |                   |  |                    |  |                    |  | (3,974             | ) |  | (7,740             | ) |  | (2                 | ) |  |                           |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|                                                  |  | 15,847             |   |  | 17,969              |   |  | 18,429             |   |  |                   |  |                    |  | 1                   |  | 16,144             |   |  | 15,246             |   |  | 5,498              |   |  |                           |  
|                                                  |  |                    |   |  |                     |   |  |                    |   | 
|Restricted cash                                   |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Investment in affiliate                           |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Due to/from subsidiaries                          |  | 15,571             |   |  | 12,510              |   |  | 8,688              |   |  | 11,439             |  |                    |  | 3,413               |  | 6,024              |   |  | 9,411              |   |  | 8,518              |   |  | 9,944                      |  
|Note receivable from subsidiaries                 |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Insurance claim receivable                        |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Prepaid expenses and other assets                 |  | (83                | ) |  | (178                | ) |  | (35                | ) |  |                   |  |                    |  |                    |  | (22                | ) |  | (43                | ) |  | (96                | ) |  |                           |  
|Accounts receivable, net                          |  | 96                 |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  | (44                        | )
|Cash and cash equivalents                         |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|                                                  |  | 31,431             |   |  | 30,301              |   |  | 27,082             |   |  | 11,439             |  |                    |  | 3,414               |  | 22,146             |   |  | 24,614             |   |  | 13,920             |   |  | 9,900                      |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Liabilities and Partners Capital                 |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Long-term debt                                    |  | 33                 |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Accounts payable and accrued expenses             |  | (7                 | ) |  | (4                  | ) |  | 61                 |   |  |                   |  |                    |  |                    |  | 88                 |   |  |                   |   |  | 2                  |   |  |                           |  
|Accrued interest                                  |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Other liabilities                                 |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|                                                  |  | 26                 |   |  | (4                  | ) |  | 61                 |   |  |                   |  |                    |  |                    |  | 88                 |   |  |                   |   |  | 2                  |   |  |                           |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Minority interests                                |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Redeemable OP units at redemption value           |  |                   |   |  |                    |   |  |                   |   |  |                   |  |                    |  |                    |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Partners capital - Common OP Units               |  | 31,405             |   |  | 30,305              |   |  | 27,021             |   |  | 11,439             |  |                    |  | 3,414               |  | 22,058             |   |  | 24,614             |   |  | 13,918             |   |  | 9,900                      |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|                                                  |  | 31,431             |   |  | 30,301              |   |  | 27,082             |   |  | 11,439             |  |                    |  | 3,414               |  | 22,146             |   |  | 24,614             |   |  | 13,920             |   |  | 9,900                      |  
|                                                  |  |                    |   |  |                     |   |  |                    |   |  |                    |  |                     |  |                     |  |                    |   |  |                    |   |  |                    |   |  |                            |  



3



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|------------------------------------------------- |  | ------------------ |  | ------------------ |  | ----------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | --------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ | -
|                                                  |  | MeriStarSub 2B,LLC |  | MeriStarSub 3A,LLC |  | MeriStarSub 4A,LP |  | MeriStarSub 4D,LLC |  | MeriStarSub 2A,LLC |  | MeriStarSub 6L,LLC |  | MDVLimitedPartnership |   |  | MeriStarSub 5C,LLC |  | MeriStarSub 6J,LLC |   |  | MeriStarSub 1D,LLC |  
|Assets                                            |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|Property and equipment                            |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 3,955                 |   |  |                   |  | 19,976             |   |  | 69,500             |  
|Accumulated depreciation                          |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | (840                  | ) |  |                   |  | (4,320             | ) |  | (14,321            | )
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|                                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 3,115                 |   |  |                   |  | 15,656             |   |  | 55,179             |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                   
|Restricted cash                                   |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Investment in affiliate                           |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Due to/from subsidiaries                          |  |                   |  | 4,976              |  | 7,612             |  |                   |  |                   |  | 20,297             |  | 2,879                 |   |  |                   |  | 9,835              |   |  | 22,849             |  
|Note receivable from subsidiaries                 |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Insurance claim receivable                        |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                 |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | (24                   | ) |  |                   |  | (6                 | ) |  | (550               | )
|Accounts receivable, net                          |  |                   |  |                   |  |                  |  |                   |  |                   |  | 178                |  |                      |   |  |                   |  |                   |   |  |                   |  
|Cash and cash equivalents                         |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|                                                  |  |                   |  | 4,976              |  | 7,612             |  |                   |  |                   |  | 20,475             |  | 5,970                 |   |  |                   |  | 25,485             |   |  | 77,478             |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|Liabilities and Partners Capital                 |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|Long-term debt                                    |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Accounts payable and accrued expenses             |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 75                    |   |  |                   |  | 59                 |   |  |                   |  
|Accrued interest                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Due to Interstate Hotels & Resorts                |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Other liabilities                                 |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|                                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 75                    |   |  |                   |  | 59                 |   |  |                   |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|Minority interests                                |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Redeemable OP units at redemption value           |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |  
|Partners capital - Common OP Units               |  |                   |  | 4,976              |  | 7,612             |  |                   |  |                   |  | 20,475             |  | 5,895                 |   |  |                   |  | 25,426             |   |  | 77,478             |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  
|                                                  |  |                   |  | 4,976              |  | 7,612             |  |                   |  |                   |  | 20,475             |  | 5,970                 |   |  |                   |  | 25,485             |   |  | 77,478             |  
|                                                  |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |  



4



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|------------------------------------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ |  | -------------- |  | ------------------
|                                                  |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |   |  | MeriStarSub 7G,LLC |  | MeriStarSub 6B,LLC |   |  | MeriStarSub 4I,L.P. |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |  | MeriStarSub 7H,LLC |  | AGH PSS I,Inc. |  | MeriStarSub 2D,LLC
|Assets                                            |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|Property and equipment                            |  |                    |   |  | 55,081             |   |  |                   |  | 11,877             |   |  |                    |  | 42,467             |   |  |                   |  |                   |  |               |  |                  
|Accumulated depreciation                          |  |                    |   |  | (11,258            | ) |  |                   |  | (2,636             | ) |  |                    |  | (9,533             | ) |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|                                                  |  |                    |   |  | 43,823             |   |  |                   |  | 9,241              |   |  |                    |  | 32,934             |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                   
|Restricted cash                                   |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Investment in affiliate                           |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  | 51,368             |   |  |                   |  |                   |  |               |  |                  
|Due to/from subsidiaries                          |  | (262                | ) |  | 26,640             |   |  | 2,370              |  | 2,976              |   |  |                    |  | (6,151             | ) |  |                   |  |                   |  |               |  |                  
|Note receivable from subsidiaries                 |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Insurance claim receivable                        |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Prepaid expenses and other assets                 |  |                    |   |  | 46                 |   |  |                   |  | (14                | ) |  |                    |  | (77                | ) |  |                   |  |                   |  |               |  |                  
|Accounts receivable, net                          |  |                    |   |  | 1,169              |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Cash and cash equivalents                         |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|                                                  |  | (262                | ) |  | 71,678             |   |  | 2,370              |  | 12,203             |   |  |                    |  | 78,074             |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|Liabilities and Partners Capital                 |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|Long-term debt                                    |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  | 24,000             |   |  |                   |  |                   |  |               |  |                  
|Notes payable to MeriStar Hospitality Corporation |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Accounts payable and accrued expenses             |  |                    |   |  | 2,381              |   |  |                   |  | (125               | ) |  |                    |  | 165                |   |  |                   |  |                   |  |               |  |                  
|Accrued interest                                  |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Due to Interstate Hotels & Resorts                |  |                    |   |  | (200               | ) |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Other liabilities                                 |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|                                                  |  |                    |   |  | 2,181              |   |  |                   |  | (125               | ) |  |                    |  | 24,165             |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|Minority interests                                |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Redeemable OP units at redemption value           |  |                    |   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |               |  |                  
|Partners capital - Common OP Units               |  | (262                | ) |  | 69,497             |   |  | 2,370              |  | 12,328             |   |  |                    |  | 53,909             |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   
|                                                  |  | (262                | ) |  | 71,678             |   |  | 2,370              |  | 12,203             |   |  |                    |  | 78,074             |   |  |                   |  |                   |  |               |  |                  
|                                                  |  |                     |   |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                |  |                   



5



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|------------------------------------------------- |  | ------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ |  | ------------------- | -
|                                                  |  | MeriStarSub 4F,L.P. |   |  | MeriStarSub 5K,LLC |  | MeriStarSub 5M,LLC |   |  | MeriStarSub 1E,LLC |  | MeriStarSub 5O,LLC |   |  | MeriStarSub 4B,L.P. |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |  | MeriStarSub 5G,L.P. |  
|Assets                                            |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|Property and equipment                            |  | 35,341              |   |  |                   |  | 18,969             |   |  |                   |  | 7,263              |   |  |                    |  |                   |   |  |                    |   |  |                   |  | 168,827             |  
|Accumulated depreciation                          |  | (6,923              | ) |  |                   |  | (1,607             | ) |  |                   |  | (844               | ) |  |                    |  |                   |   |  | (1                  | ) |  |                   |  | (35,721             | )
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|                                                  |  | 28,418              |   |  |                   |  | 17,362             |   |  |                   |  | 6,419              |   |  |                    |  |                   |   |  | (1                  | ) |  |                   |  | 133,106             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                   
|Restricted cash                                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Investment in affiliate                           |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Due to/from subsidiaries                          |  | 4,108               |   |  | 21,531             |  | 10,741             |   |  |                   |  | 4,524              |   |  | 1,728               |  | (2,360             | ) |  | 16,930              |   |  |                   |  | 45,208              |  
|Note receivable from subsidiaries                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Insurance claim receivable                        |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Prepaid expenses and other assets                 |  | (10                 | ) |  |                   |  | (118               | ) |  |                   |  | (39                | ) |  |                    |  |                   |   |  |                    |   |  |                   |  | (394                | )
|Accounts receivable, net                          |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Cash and cash equivalents                         |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|                                                  |  | 32,516              |   |  | 21,531             |  | 27,985             |   |  |                   |  | 10,904             |   |  | 1,728               |  | (2,360             | ) |  | 16,929              |   |  |                   |  | 177,920             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|Liabilities and Partners Capital                 |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|Long-term debt                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Notes payable to MeriStar Hospitality Corporation |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Accounts payable and accrued expenses             |  | 334                 |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Accrued interest                                  |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Due to Interstate Hotels & Resorts                |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Other liabilities                                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|                                                  |  | 334                 |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|Minority interests                                |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Redeemable OP units at redemption value           |  |                    |   |  |                   |  |                   |   |  |                   |  |                   |   |  |                    |  |                   |   |  |                    |   |  |                   |  |                    |  
|Partners capital - Common OP Units               |  | 32,182              |   |  | 21,531             |  | 27,985             |   |  |                   |  | 10,904             |   |  | 1,728               |  | (2,360             | ) |  | 16,929              |   |  |                   |  | 177,920             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  
|                                                  |  | 32,516              |   |  | 21,531             |  | 27,985             |   |  |                   |  | 10,904             |   |  | 1,728               |  | (2,360             | ) |  | 16,929              |   |  |                   |  | 177,920             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                    |   |  |                     |  |                    |   |  |                     |   |  |                    |  |                     |  



6



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------------ | - |  | ------------------ |  | ------------------
|                                                  |  | MeriStarSub 5N,LLC |   |  | MeriStarSub 5P,LLC |   |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |   |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |  | MeriStarSub 4J,LLC |   |  | MeristarPentagonCity,LLC |   |  | MeriStarSub 6K,LLC |  | MeriStarSub 5E,LLC
|Assets                                            |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|Property and equipment                            |  | 3,580              |   |  | 39                 |   |  | 79,579             |   |  | 13,980             |   |  | 37,074             |   |  |                   |  | 41,862             |   |  | 93,264                   |   |  |                   |  |                  
|Accumulated depreciation                          |  | (448               | ) |  | (28                | ) |  | (14,819            | ) |  | (2,312             | ) |  | (11,767            | ) |  |                   |  | (8,398             | ) |  | (3,478                   | ) |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|                                                  |  | 3,132              |   |  | 11                 |   |  | 64,760             |   |  | 11,668             |   |  | 25,307             |   |  |                   |  | 33,464             |   |  | 89,786                   |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   | 
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Investment in affiliate                           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 4,627              |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Due to/from subsidiaries                          |  | 4,988              |   |  | 3,724              |   |  | 51,127             |   |  | 8,187              |   |  | 8,010              |   |  | 16,379             |  | 6,370              |   |  | 58,867                   |   |  |                   |  |                  
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Insurance claim receivable                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Prepaid expenses and other assets                 |  | (45                | ) |  | (10                | ) |  | (769               | ) |  | (137               | ) |  | (78                | ) |  |                   |  | (51                | ) |  | 466                      |   |  |                   |  |                  
|Accounts receivable, net                          |  |                   |   |  | 38                 |   |  |                   |   |  |                   |   |  |                   |   |  | 359                |  | (14                | ) |  | (361                     | ) |  |                   |  |                  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|                                                  |  | 8,075              |   |  | 3,763              |   |  | 115,118            |   |  | 19,718             |   |  | 37,866             |   |  | 16,738             |  | 39,769             |   |  | 148,758                  |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|Long-term debt                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 23,609             |   |  |                   |  |                   |   |  | 55,509                   |   |  |                   |  |                  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Accounts payable and accrued expenses             |  | 4                  |   |  |                   |   |  | 126                |   |  | (18                | ) |  | 114                |   |  |                   |  | 152                |   |  | 273                      |   |  |                   |  |                  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  | 268                      |   |  |                   |  |                  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|                                                  |  | 4                  |   |  |                   |   |  | 126                |   |  | (18                | ) |  | 23,723             |   |  |                   |  | 152                |   |  | 56,050                   |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|Minority interests                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                         |   |  |                   |  |                  
|Partners capital - Common OP Units               |  | 8,071              |   |  | 3,763              |   |  | 114,992            |   |  | 19,736             |   |  | 14,143             |   |  | 16,738             |  | 39,617             |   |  | 92,708                   |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   
|                                                  |  | 8,075              |   |  | 3,763              |   |  | 115,118            |   |  | 19,718             |   |  | 37,866             |   |  | 16,738             |  | 39,769             |   |  | 148,758                  |   |  |                   |  |                  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                          |   |  |                    |  |                   



7



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2004

(Dollars in thousands)



|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|------------------------------------------------- |  | ------------------ |  | ------------------ |  | ----------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------------- | - |  | --------------------- | - |  | -------------------------- | - |  | ------------------------- | - |  | ----------------- | --------- | -
|                                                  |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotel Lessee,Inc. |   |  | GuarantorEliminations |   |  | GuarantorSubsidiariesTotal |   |  | ConsolidationEliminations |   |  | TotalConsolidated |          
|Assets                                            |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|Property and equipment                            |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 3,316                     |   |  |                      |   |  | 1,082,467                  |   |  |                          |   |  | $                 | 2,581,720 |  
|Accumulated depreciation                          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (3,384                    | ) |  |                      |   |  | (205,338                   | ) |  |                          |   |  |                   | (506,632  | )
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (68                       | ) |  |                      |   |  | 877,129                    |   |  |                          |   |  |                   | 2,075,088 |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    | 
|Restricted cash                                   |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 1,313                     |   |  |                      |   |  | 1,313                      |   |  |                          |   |  |                   | 58,413    |  
|Investment in affiliate                           |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 42,022                    |   |  | (40,393               | ) |  | 110,640                    |   |  | (2,526,603                | ) |  |                   | 84,528    |  
|Due to/from subsidiaries                          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 40,158                    |   |  | (709                  | ) |  | 583,683                    |   |  |                          |   |  |                   |          |  
|Note receivable from subsidiaries                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  | (221,704                  | ) |  |                   |          |  
|Insurance claim receivable                        |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 76,056    |  
|Prepaid expenses and other assets                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 9,661                     |   |  |                      |   |  | 6,784                      |   |  |                          |   |  |                   | 34,230    |  
|Accounts receivable, net                          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 30,874                    |   |  | (740                  | ) |  | 32,483                     |   |  | (9,414                    | ) |  |                   | 33,719    |  
|Cash and cash equivalents                         |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 19,309                    |   |  |                      |   |  | 19,309                     |   |  |                          |   |  |                   | 60,533    |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 143,269                   |   |  | (41,842               | ) |  | 1,631,341                  |   |  | (2,757,721                | ) |  | $                 | 2,422,567 |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|Liabilities and Partners Capital                 |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|Long-term debt                                    |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 174,095                   |   |  |                      |   |  | 277,246                    |   |  | (221,704                  | ) |  | $                 | 1,369,299 |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 203,977   |  
|Accounts payable and accrued expenses             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 48,274                    |   |  |                      |   |  | 52,348                     |   |  |                          |   |  |                   | 72,253    |  
|Accrued interest                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 9,414                     |   |  |                      |   |  | 9,682                      |   |  | (9,414                    | ) |  |                   | 41,165    |  
|Due to Interstate Hotels & Resorts                |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 10,652                    |   |  |                      |   |  | 10,452                     |   |  |                          |   |  |                   | 21,799    |  
|Other liabilities                                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 6,171                     |   |  |                      |   |  | 6,171                      |   |  |                          |   |  |                   | 11,553    |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 248,606                   |   |  |                      |   |  | 355,899                    |   |  | (231,118                  | ) |  |                   | 1,720,046 |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|Minority interests                                |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 2,418     |  
|Redeemable OP units at redemption value           |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 19,187    |  
|Partners capital - Common OP Units               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (105,337                  | ) |  | (41,842               | ) |  | 1,275,442                  |   |  | (2,526,603                | ) |  |                   | 680,916   |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 143,269                   |   |  | (41,842               | ) |  | 1,631,341                  |   |  | (2,757,721                | ) |  | $                 | 2,422,567 |  
|                                                  |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |           |  



8



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|------------------------------------------------- |  | --------------------------- | --------- | - | -------------------------- | --------- | - | ------------------- | -- | ------------------- | -- | ------------ | ----- | -------------------- | ------ | - | ------------------- | ------ | - | ------------------ | ------- | - | ------------------- | ------ | - | ------------------ | ------ | -
|                                                  |  | MeriStarHospitality OP,L.P. |           |   | Non- GuarantorSubsidiaries |           |   | MeriStar Sub 7C,LLC |    | MeriStar Sub 8G,LLC |    | AGHUpreitLLC |       | MeriStar Sub 6H,L.P. |        |   | MeriStarSub 8F,L.P. |        |   | MeriStarSub 8B,LLC |         |   | MeriStarSub 1C,L.P. |        |   | MeriStarSub 8E,LLC |       
|Assets                                            |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|Property and equipment                            |  | $                           | 18,987    |   |                            | 1,407,432 |   |                     |   |                     |   |              |      |                      | 10,862 |   |                     | 11,502 |   |                    | 83,215  |   |                     | 26,641 |   |                    | 15,493 |  
|Accumulated depreciation                          |  |                             | (13,219   | ) |                            | (246,091  | ) |                     |   |                     |   |              |      |                      | (157   | ) |                     | (2,521 | ) |                    | (12,270 | ) |                     | (5,900 | ) |                    | (3,024 | )
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|                                                  |  |                             | 5,768     |   |                            | 1,161,341 |   |                     |   |                     |   |              |      |                      | 10,705 |   |                     | 8,981  |   |                    | 70,945  |   |                     | 20,741 |   |                    | 12,469 |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                    
|Assets held for sale                              |  |                             |          |   |                            | 4,273     |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Restricted cash                                   |  |                             | 39,932    |   |                            | 2,476     |   |                     |   |                     |   |              |      |                      |       |   |                     | 115    |   |                    |        |   |                     |       |   |                    |       |  
|Investments in affiliate                          |  |                             | 2,208,641 |   |                            | 8,200     |   |                     | 32 |                     | 72 |              | 2,989 |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Due from/to subsidiaries                          |  |                             | (838,258  | ) |                            | 397,837   |   |                     |   |                     | 10 |              | 133   |                      | 6,814  |   |                     | 7,012  |   |                    | 30,981  |   |                     | (3,881 | ) |                    | 6,688  |  
|Note receivable from subsidiaries                 |  |                             | 120,855   |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Prepaid expenses and other assets                 |  |                             | 34,658    |   |                            | (1,612    | ) |                     |   |                     |   |              |      |                      | 1      |   |                     | (28    | ) |                    | (26     | ) |                     | (88    | ) |                    | (10    | )
|Accounts receivable, net                          |  |                             | 18,220    |   |                            | 956       |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Cash and cash equivalents                         |  |                             | 218,646   |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|                                                  |  | $                           | 1,808,462 |   |                            | 1,573,471 |   |                     | 32 |                     | 82 |              | 3,122 |                      | 17,520 |   |                     | 16,080 |   |                    | 101,900 |   |                     | 16,772 |   |                    | 19,147 |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|Liabilities and Partners Capital                 |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|Long-term debt                                    |  | $                           | 917,232   |   |                            | 436,778   |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Notes payable to MeriStar Hospitality Corporation |  |                             | 256,473   |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Accounts payable and accrued expenses             |  |                             | 14,806    |   |                            | 5,517     |   |                     |   |                     |   |              |      |                      | 161    |   |                     | 67     |   |                    | 2,502   |   |                     | 88     |   |                    | (32    | )
|Accrued interest                                  |  |                             | 43,396    |   |                            | 2,639     |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Due to Interstate Hotels & Resorts                |  |                             | 6,923     |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Other liabilities                                 |  |                             | 1,750     |   |                            | (304      | ) |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|Total liabilities                                 |  |                             | 1,240,580 |   |                            | 444,630   |   |                     |   |                     |   |              |      |                      | 161    |   |                     | 67     |   |                    | 2,502   |   |                     | 88     |   |                    | (32    | )
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|Minority interests                                |  |                             | 2,496     |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Redeemable OP units at redemption value           |  |                             | 35,926    |   |                            |          |   |                     |   |                     |   |              |      |                      |       |   |                     |       |   |                    |        |   |                     |       |   |                    |       |  
|Partners capital - Common OP Units               |  |                             | 529,460   |   |                            | 1,128,841 |   |                     | 32 |                     | 82 |              | 3,122 |                      | 17,359 |   |                     | 16,013 |   |                    | 99,398  |   |                     | 16,684 |   |                    | 19,179 |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  
|                                                  |  | $                           | 1,808,462 |   |                            | 1,573,471 |   |                     | 32 |                     | 82 |              | 3,122 |                      | 17,520 |   |                     | 16,080 |   |                    | 101,900 |   |                     | 16,772 |   |                    | 19,147 |  
|                                                  |  |                             |           |   |                            |           |   |                     |    |                     |    |              |       |                      |        |   |                     |        |   |                    |         |   |                     |        |   |                    |        |  



9



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | -
|                                                  |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |   |  | MeriStarSub 5R,LLC |   |  | MeriStarSub 8A,LLC |  | MeriStarSub 6D,LLC |   |  | MeriStarSub 6E,LLC |   |  | MeriStarSub 4E,L.P. |   |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |  
|Assets                                            |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Property and equipment                            |  | 7,293              |   |  | 11,841             |   |  | 17,498             |   |  |                   |   |  |                   |  | 17,449             |   |  | 45,155             |   |  | 5,047               |   |  | 18,656             |   |  | 17,410              |  
|Accumulated depreciation                          |  | (97                | ) |  | (645               | ) |  | (3,696             | ) |  |                   |   |  |                   |  | (2,893             | ) |  | (9,963             | ) |  | (76                 | ) |  | (4,064             | ) |  | (198                | )
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|                                                  |  | 7,196              |   |  | 11,196             |   |  | 13,802             |   |  |                   |   |  |                   |  | 14,556             |   |  | 35,192             |   |  | 4,971               |   |  | 14,592             |   |  | 17,212              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   | 
|Assets held for sale                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Investments in affiliate                          |  |                   |   |  |                   |   |  |                   |   |  | 43                 |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Due from/to subsidiaries                          |  | 5,122              |   |  | 4,239              |   |  | 5,062              |   |  | (43                | ) |  |                   |  | 8,445              |   |  | 21,931             |   |  | 3,545               |   |  | 15,375             |   |  | 12,431              |  
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Prepaid expenses and other assets                 |  | (1                 | ) |  | (24                | ) |  | 28                 |   |  |                   |   |  |                   |  | (7                 | ) |  | (33                | ) |  | (17                 | ) |  | (32                | ) |  | (63                 | )
|Accounts receivable, net                          |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  | 103                |   |  |                   |   |  |                    |   |  | 96                 |   |  |                    |  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|                                                  |  | 12,317             |   |  | 15,411             |   |  | 18,892             |   |  |                   |   |  |                   |  | 23,097             |   |  | 57,090             |   |  | 8,499               |   |  | 30,031             |   |  | 29,580              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Long-term debt                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  | 33                 |   |  |                    |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Accounts payable and accrued expenses             |  | 208                |   |  | (15                | ) |  | 140                |   |  |                   |   |  |                   |  | 38                 |   |  | (208               | ) |  | 351                 |   |  | 39                 |   |  | 97                  |  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Total liabilities                                 |  | 208                |   |  | (15                | ) |  | 140                |   |  |                   |   |  |                   |  | 38                 |   |  | (208               | ) |  | 351                 |   |  | 72                 |   |  | 97                  |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Minority interests                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Partners capital - Common OP Units               |  | 12,109             |   |  | 15,426             |   |  | 18,752             |   |  |                   |   |  |                   |  | 23,059             |   |  | 57,298             |   |  | 8,148               |   |  | 29,959             |   |  | 29,483              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|                                                  |  | 12,317             |   |  | 15,411             |   |  | 18,892             |   |  |                   |   |  |                   |  | 23,097             |   |  | 57,090             |   |  | 8,499               |   |  | 30,031             |   |  | 29,580              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  



10



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------------------- | - |  | ------------------ | - |  | ------------------ | -
|                                                  |  | MeriStarSub 6G,LLC |   |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |   |  | MeriStarSub 3D,LLC |   |  | MeriStarSub 1A,LLC |   |  | MeriStarSub 7AJointVenture |   |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |  
|Assets                                            |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Property and equipment                            |  | 22,578             |   |  |                   |   |  |                   |  | 4,929               |   |  | 18,569             |   |  | 22,682             |   |  | 11,514             |   |  | 5,881                      |   |  |                   |   |  | 3,197              |  
|Accumulated depreciation                          |  | (5,014             | ) |  |                   |   |  |                   |  | (130                | ) |  | (3,323             | ) |  | (7,036             | ) |  | (2,928             | ) |  | (121                       | ) |  |                   |   |  | (51                | )
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|                                                  |  | 17,564             |   |  |                   |   |  |                   |  | 4,799               |   |  | 15,246             |   |  | 15,646             |   |  | 8,586              |   |  | 5,760                      |   |  |                   |   |  | 3,146              |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                    
|Assets held for sale                              |  |                   |   |  | 5,530              |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Investments in affiliate                          |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Due from/to subsidiaries                          |  | 6,988              |   |  | 5,557              |   |  |                   |  | (791                | ) |  | 6,367              |   |  | 8,459              |   |  | 7,330              |   |  | 5,021                      |   |  | (7,036             | ) |  | 1,904              |  
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                 |  | (12                | ) |  | 117                |   |  |                   |  | (8                  | ) |  | (8                 | ) |  | (16                | ) |  | (56                | ) |  | 1                          |   |  |                   |   |  | 1                  |  
|Accounts receivable, net                          |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | 2,345              |   |  |                   |  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|                                                  |  | 24,540             |   |  | 11,204             |   |  |                   |  | 4,000               |   |  | 21,605             |   |  | 24,089             |   |  | 15,860             |   |  | 10,782                     |   |  | (4,691             | ) |  | 5,051              |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Long-term debt                                    |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Accounts payable and accrued expenses             |  | (69                | ) |  | (306               | ) |  |                   |  | 178                 |   |  | 74                 |   |  | 30                 |   |  | (17                | ) |  | 150                        |   |  | (8                 | ) |  | 161                |  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Total liabilities                                 |  | (69                | ) |  | (306               | ) |  |                   |  | 178                 |   |  | 74                 |   |  | 30                 |   |  | (17                | ) |  | 150                        |   |  | (8                 | ) |  | 161                |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Minority interests                                |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Partners capital - Common OP Units               |  | 24,609             |   |  | 11,510             |   |  |                   |  | 3,822               |   |  | 21,531             |   |  | 24,059             |   |  | 15,877             |   |  | 10,632                     |   |  | (4,683             | ) |  | 4,890              |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|                                                  |  | 24,540             |   |  | 11,204             |   |  |                   |  | 4,000               |   |  | 21,605             |   |  | 24,089             |   |  | 15,860             |   |  | 10,782                     |   |  | (4,691             | ) |  | 5,051              |  
|                                                  |  |                    |   |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  



11



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|------------------------------------------------- |  | ------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ |  | --------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | -
|                                                  |  | MeriStarSub 4A,L.P. |   |  | MeriStarSub 4D,LLC |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |  | MDVLimitedPartnership |   |  | MeriStarSub 5C,LLC |  | MeriStarSub 6J,LLC |   |  | MeriStarSub 1D,LLC |   |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |  
|Assets                                            |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Property and equipment                            |  |                    |   |  |                   |  |                   |   |  |                   |  | 3,850                 |   |  |                   |  | 19,530             |   |  | 68,709             |   |  | 4,806               |   |  | 52,417             |  
|Accumulated depreciation                          |  |                    |   |  |                   |  |                   |   |  |                   |  | (686                  | ) |  |                   |  | (3,776             | ) |  | (12,036            | ) |  | (156                | ) |  | (9,771             | )
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|                                                  |  |                    |   |  |                   |  |                   |   |  |                   |  | 3,164                 |   |  |                   |  | 15,754             |   |  | 56,673             |   |  | 4,650               |   |  | 42,646             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                   
|Assets held for sale                              |  | 3,301               |   |  |                   |  |                   |   |  | 12,395             |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Restricted cash                                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Investments in affiliate                          |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Due from/to subsidiaries                          |  | 4,573               |   |  | 2,930              |  | (9,934             | ) |  | 6,238              |  | 2,538                 |   |  | 5,088              |  | 7,636              |   |  | 19,511             |   |  | (3,011              | ) |  | 25,422             |  
|Note receivable from subsidiaries                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Prepaid expenses and other assets                 |  | (9                  | ) |  | 3                  |  |                   |   |  | 15                 |  | (4                    | ) |  |                   |  | 23                 |   |  | (209               | ) |  | 1                   |   |  | 192                |  
|Accounts receivable, net                          |  |                    |   |  |                   |  | 2,002              |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  | 1,326              |  
|Cash and cash equivalents                         |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|                                                  |  | 7,865               |   |  | 2,933              |  | (7,932             | ) |  | 18,648             |  | 5,698                 |   |  | 5,088              |  | 23,413             |   |  | 75,975             |   |  | 1,640               |   |  | 69,586             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Liabilities and Partners Capital                 |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Long-term debt                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Notes payable to MeriStar Hospitality Corporation |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Accounts payable and accrued expenses             |  | 342                 |   |  |                   |  | (8                 | ) |  | 25                 |  | 96                    |   |  |                   |  | (216               | ) |  | (91                | ) |  | 1,080               |   |  | 4,169              |  
|Accrued interest                                  |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Due to Interstate Hotels & Resorts                |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  | (200               | )
|Other liabilities                                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Total liabilities                                 |  | 342                 |   |  |                   |  | (8                 | ) |  | 25                 |  | 96                    |   |  |                   |  | (216               | ) |  | (91                | ) |  | 1,080               |   |  | 3,969              |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Minority interests                                |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Redeemable OP units at redemption value           |  |                    |   |  |                   |  |                   |   |  |                   |  |                      |   |  |                   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Partners capital - Common OP Units               |  | 7,523               |   |  | 2,933              |  | (7,924             | ) |  | 18,623             |  | 5,602                 |   |  | 5,088              |  | 23,629             |   |  | 76,066             |   |  | 560                 |   |  | 65,617             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|                                                  |  | 7,865               |   |  | 2,933              |  | (7,932             | ) |  | 18,648             |  | 5,698                 |   |  | 5,088              |  | 23,413             |   |  | 75,975             |   |  | 1,640               |   |  | 69,586             |  
|                                                  |  |                     |   |  |                    |  |                    |   |  |                    |  |                       |   |  |                    |  |                    |   |  |                    |   |  |                     |   |  |                    |  



12



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | -------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ | -
|                                                  |  | MeriStarSub 7G,LLC |   |  | MeriStarSub 6B,LLC |   |  | MeriStarSub 4I,L.P. |   |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |   |  | MeriStarSub 7H,LLC |  | AGH PSS I,Inc. |  | MeriStarSub 2D,LLC |   |  | MeriStarSub 4F,L.P. |   |  | MeriStarSub 5K,LLC |  
|Assets                                            |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|Property and equipment                            |  | 1,901              |   |  | 10,802             |   |  |                    |   |  | 42,105             |   |  |                   |   |  |                   |  |               |  |                   |   |  | 32,615              |   |  | 28,386             |  
|Accumulated depreciation                          |  |                   |   |  | (2,188             | ) |  |                    |   |  | (8,102             | ) |  |                   |   |  |                   |  |               |  |                   |   |  | (5,809              | ) |  | (5,206             | )
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|                                                  |  | 1,901              |   |  | 8,614              |   |  |                    |   |  | 34,003             |   |  |                   |   |  |                   |  |               |  |                   |   |  | 26,806              |   |  | 23,180             |  
|                                                  |  |                    |   |  |                    |   |  |                     |   | 
|Assets held for sale                              |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Restricted cash                                   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Investments in affiliate                          |  |                   |   |  |                   |   |  |                    |   |  | 51,368             |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Due from/to subsidiaries                          |  | 365                |   |  | 3,137              |   |  | 1,609               |   |  | (6,600             | ) |  | 36,579             |   |  | 9,567              |  | 25,579         |  | (6,223             | ) |  | 5,237               |   |  | (365               | )
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Prepaid expenses and other assets                 |  |                   |   |  | (5                 | ) |  |                    |   |  | (17                | ) |  | 1                  |   |  |                   |  | 1              |  |                   |   |  | 13                  |   |  | (74                | )
|Accounts receivable, net                          |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  | 46                 |   |  | 43                 |  |               |  | 1,166              |   |  |                    |   |  |                   |  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|                                                  |  | 2,266              |   |  | 11,746             |   |  | 1,609               |   |  | 78,754             |   |  | 36,626             |   |  | 9,610              |  | 25,580         |  | (5,057             | ) |  | 32,056              |   |  | 22,741             |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|Long-term debt                                    |  |                   |   |  |                   |   |  |                    |   |  | 24,000             |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Accounts payable and accrued expenses             |  | (6                 | ) |  | (107               | ) |  | (61                 | ) |  | 12                 |   |  | (2                 | ) |  |                   |  |               |  | (1                 | ) |  | 370                 |   |  | 3,028              |  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|Total liabilities                                 |  | (6                 | ) |  | (107               | ) |  | (61                 | ) |  | 24,012             |   |  | (2                 | ) |  |                   |  |               |  | (1                 | ) |  | 370                 |   |  | 3,028              |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|Minority interests                                |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |               |  |                   |   |  |                    |   |  |                   |  
|Partners capital - Common OP Units               |  | 2,272              |   |  | 11,853             |   |  | 1,670               |   |  | 54,742             |   |  | 36,628             |   |  | 9,610              |  | 25,580         |  | (5,056             | ) |  | 31,686              |   |  | 19,713             |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  
|                                                  |  | 2,266              |   |  | 11,746             |   |  | 1,609               |   |  | 78,754             |   |  | 36,626             |   |  | 9,610              |  | 25,580         |  | (5,057             | ) |  | 32,056              |   |  | 22,741             |  
|                                                  |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                |  |                    |   |  |                     |   |  |                    |  



13



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | -
|                                                  |  | MeriStarSub 5M,LLC |   |  | MeriStarSub 1E,LLC |   |  | MeriStarSub 5O,LLC |   |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |   |  | MeriStarSub 5G,L.P. |   |  | MeriStarSub 5N,LLC |   |  | MeriStarSub 5P,LLC |  
|Assets                                            |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Property and equipment                            |  | 22,056             |   |  |                   |   |  | 8,741              |   |  |                    |   |  |                   |   |  | 9,086               |   |  |                   |   |  | 164,273             |   |  | 4,146              |   |  | 39                 |  
|Accumulated depreciation                          |  | (2,355             | ) |  |                   |   |  | (1,144             | ) |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  | (30,502             | ) |  | (679               | ) |  | (23                | )
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|                                                  |  | 19,701             |   |  |                   |   |  | 7,597              |   |  |                    |   |  |                   |   |  | 9,086               |   |  |                   |   |  | 133,771             |   |  | 3,467              |   |  | 16                 |  
|                                                  |  |                    |   |  |                    |   |  |                    |   | 
|Assets held for sale                              |  |                   |   |  |                   |   |  |                   |   |  | 7,158               |   |  | 9,415              |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Investments in affiliate                          |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Due from/to subsidiaries                          |  | 7,852              |   |  | 24,172             |   |  | 3,077              |   |  | (4,789              | ) |  | 5,673              |   |  | 8,806               |   |  | 9,336              |   |  | 42,679              |   |  | 4,243              |   |  | 3,088              |  
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                 |  | (48                | ) |  | (1                 | ) |  | (15                | ) |  | (4                  | ) |  | (240               | ) |  | (89                 | ) |  | (3                 | ) |  | (255                | ) |  | (18                | ) |  | (4                 | )
|Accounts receivable, net                          |  |                   |   |  | 198                |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  | 38                 |  
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|                                                  |  | 27,505             |   |  | 24,369             |   |  | 10,659             |   |  | 2,365               |   |  | 14,848             |   |  | 17,803              |   |  | 9,333              |   |  | 176,195             |   |  | 7,692              |   |  | 3,138              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Long-term debt                                    |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | 19,731             |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Accounts payable and accrued expenses             |  |                   |   |  | 14                 |   |  | (8                 | ) |  | 410                 |   |  | 257                |   |  | 488                 |   |  |                   |   |  | 775                 |   |  | (11                | ) |  |                   |  
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Total liabilities                                 |  |                   |   |  | 14                 |   |  | (8                 | ) |  | 410                 |   |  | 19,988             |   |  | 488                 |   |  |                   |   |  | 775                 |   |  | (11                | ) |  |                   |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Minority interests                                |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Partners capital - Common OP Units               |  | 27,505             |   |  | 24,355             |   |  | 10,667             |   |  | 1,955               |   |  | (5,140             | ) |  | 17,315              |   |  | 9,333              |   |  | 175,420             |   |  | 7,703              |   |  | 3,138              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|                                                  |  | 27,505             |   |  | 24,369             |   |  | 10,659             |   |  | 2,365               |   |  | 14,848             |   |  | 17,803              |   |  | 9,333              |   |  | 176,195             |   |  | 7,692              |   |  | 3,138              |  
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  



14



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | -----------------------------
|                                                  |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |   |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |   |  | MeriStarSub 6K,LLC |  | MeriStarSub 5E,LLC |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC
|Assets                                            |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|Property and equipment                            |  | 110,406            |   |  | 16,737             |   |  | 35,707             |   |  |                   |   |  | 38,463             |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Accumulated depreciation                          |  | (16,816            | ) |  | (2,269             | ) |  | (10,686            | ) |  |                   |   |  | (7,127             | ) |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|                                                  |  | 93,590             |   |  | 14,468             |   |  | 25,021             |   |  |                   |   |  | 31,336             |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   | 
|Assets held for sale                              |  |                   |   |  |                   |   |  |                   |   |  | 9,097              |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Restricted cash                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Investments in affiliate                          |  |                   |   |  |                   |   |  | 4,627              |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Due from/to subsidiaries                          |  | 21,963             |   |  | 4,637              |   |  | 6,562              |   |  | 8,303              |   |  | 7,469              |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Note receivable from subsidiaries                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Prepaid expenses and other assets                 |  | (370               | ) |  | (53                | ) |  | (29                | ) |  | 14                 |   |  | (19                | ) |  |                   |  |                   |  |                   |  |                   |  |                             
|Accounts receivable, net                          |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (13                | ) |  |                   |  |                   |  |                   |  |                   |  |                             
|Cash and cash equivalents                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|                                                  |  | 115,183            |   |  | 19,052             |   |  | 36,181             |   |  | 17,414             |   |  | 38,773             |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|Liabilities and Partners Capital                 |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|Long-term debt                                    |  |                   |   |  |                   |   |  | 23,609             |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Notes payable to MeriStar Hospitality Corporation |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Accounts payable and accrued expenses             |  | 131                |   |  | (189               | ) |  | (195               | ) |  | (183               | ) |  | 81                 |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Accrued interest                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Due to Interstate Hotels & Resorts                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Other liabilities                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|Total liabilities                                 |  | 131                |   |  | (189               | ) |  | 23,414             |   |  | (183               | ) |  | 81                 |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|Minority interests                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Redeemable OP units at redemption value           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                             
|Partners capital - Common OP Units               |  | 115,052            |   |  | 19,241             |   |  | 12,767             |   |  | 17,597             |   |  | 38,692             |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              
|                                                  |  | 115,183            |   |  | 19,052             |   |  | 36,181             |   |  | 17,414             |   |  | 38,773             |   |  |                   |  |                   |  |                   |  |                   |  |                             
|                                                  |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                              



15



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Balance Sheet

December 31, 2003

(Dollars in thousands)



|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|------------------------------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------------ | - |  | -------------------------- | - |  | ------------------------- | - |  | ----------------- | --------- | -
|                                                  |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotelLessee,Inc. |   |  | GuarantorSubsidiariesTotal |   |  | ConsolidationEliminations |   |  | TotalConsolidated |          
|Assets                                            |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|Property and equipment                            |  |                               |  |                   |  |                   |  | 3,146                    |   |  | 1,055,333                  |   |  |                          |   |  | $                 | 2,481,752 |  
|Accumulated depreciation                          |  |                               |  |                   |  |                   |  | (3,284                   | ) |  | (186,722                   | ) |  |                          |   |  |                   | (446,032  | )
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                               |  |                   |  |                   |  | (138                     | ) |  | 868,611                    |   |  |                          |   |  |                   | 2,035,720 |  
|                                                  |  |                                |  |                    |  |                    | 
|Assets held for sale                              |  |                               |  |                   |  |                   |  |                         |   |  | 46,896                     |   |  |                          |   |  |                   | 51,169    |  
|Restricted cash                                   |  |                               |  |                   |  |                   |  |                         |   |  | 115                        |   |  |                          |   |  |                   | 42,523    |  
|Investments in affiliate                          |  |                               |  |                   |  |                   |  | 1,629                    |   |  | 60,760                     |   |  | (2,262,601                | ) |  |                   | 15,000    |  
|Due from/to subsidiaries                          |  |                               |  |                   |  |                   |  | (189                     | ) |  | 440,421                    |   |  |                          |   |  |                   |          |  
|Note receivable from subsidiaries                 |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  | (120,855                  | ) |  |                   |          |  
|Prepaid expenses and other assets                 |  |                               |  |                   |  |                   |  | 15,471                   |   |  | 13,987                     |   |  |                          |   |  |                   | 47,033    |  
|Accounts receivable, net                          |  |                               |  |                   |  |                   |  | 38,183                   |   |  | 45,533                     |   |  |                          |   |  |                   | 64,709    |  
|Cash and cash equivalents                         |  |                               |  |                   |  |                   |  | 12,230                   |   |  | 12,230                     |   |  |                          |   |  |                   | 230,876   |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                               |  |                   |  |                   |  | 67,186                   |   |  | 1,488,553                  |   |  | (2,383,456                | ) |  | $                 | 2,487,030 |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|Liabilities and Partners Capital                 |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|Long-term debt                                    |  |                               |  |                   |  |                   |  | 81,027                   |   |  | 148,400                    |   |  | (120,855                  | ) |  | $                 | 1,381,555 |  
|Notes payable to MeriStar Hospitality Corporation |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 256,473   |  
|Accounts payable and accrued expenses             |  |                               |  |                   |  |                   |  | 45,862                   |   |  | 59,691                     |   |  |                          |   |  |                   | 80,014    |  
|Accrued interest                                  |  |                               |  |                   |  |                   |  | 778                      |   |  | 778                        |   |  |                          |   |  |                   | 46,813    |  
|Due to Interstate Hotels & Resorts                |  |                               |  |                   |  |                   |  | 9,688                    |   |  | 9,488                      |   |  |                          |   |  |                   | 16,411    |  
|Other liabilities                                 |  |                               |  |                   |  |                   |  | 9,599                    |   |  | 9,599                      |   |  |                          |   |  |                   | 11,045    |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|Total liabilities                                 |  |                               |  |                   |  |                   |  | 146,954                  |   |  | 227,956                    |   |  | (120,855                  | ) |  |                   | 1,792,311 |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|Minority interests                                |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 2,496     |  
|Redeemable OP units at redemption value           |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 35,926    |  
|Partners capital - Common OP Units               |  |                               |  |                   |  |                   |  | (79,768                  | ) |  | 1,260,597                  |   |  | (2,262,601                | ) |  |                   | 656,297   |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  
|                                                  |  |                               |  |                   |  |                   |  | 67,186                   |   |  | 1,488,553                  |   |  | (2,383,456                | ) |  | $                 | 2,487,030 |  
|                                                  |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |           |  



16



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|---------------------------------------------------------------------- |  | --------------------------- | ------- | - | -------------------------- | ------- | - | ----------------------------- | ----- | ----------------------------- | --- | ------------------ | - | ------------------ | - | ------------ | - | ------------------- | ----- | ------------------- | ----- | ------------------ | ------ | -
|                                                                       |  | MeriStarHospitality OP,L.P. |         |   | Non- GuarantorSubsidiaries |         |   | MeriStarLexingtonMortgage,LLC |       | MeriStarLexingtonPartners,LLC |     | MeriStarSub 7C,LLC |   | MeriStarSub 8G,LLC |   | AGHUpreitLLC |   | MeriStarSub 6H,L.P. |       | MeriStarSub 8F,L.P. |       | MeriStarSub 8B,LLC |       
|Revenue:                                                               |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Hotel operations:                                                      |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Rooms                                                                  |  | $                           |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Food and beverage                                                      |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Other hotel operations                                                 |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Office rental, parking and other revenue                               |  |                             | 4,193   |   |                            | 417     |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     | 35    |                    |       |  
|Participating lease revenue                                            |  |                             |        |   |                            | 151,439 |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 1,286 |                     | 2,404 |                    | 7,454  |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Total revenue                                                          |  |                             | 4,193   |   |                            | 151,856 |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 1,286 |                     | 2,439 |                    | 7,454  |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Hotel operating expenses:                                              |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Rooms                                                                  |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Food and beverage                                                      |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Other hotel operating expenses                                         |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Office rental, parking and other expenses                              |  |                             |        |   |                            | 1,194   |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    | (2,612 | )
|Other operating expenses:                                              |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|General and administrative, hotel                                      |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|General and administrative, corporate                                  |  |                             | 13,977  |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Property operating costs                                               |  |                             |        |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Depreciation and amortization                                          |  |                             | 7,964   |   |                            | 51,781  |   |                               |      |                               |    |                    |  |                    |  |              |  |                     | 627   |                     | 658   |                    | 2,483  |  
|Property taxes, insurance and other                                    |  |                             | 5,681   |   |                            | 33,856  |   |                               |      |                               |    |                    |  |                    |  |              |  |                     | 98    |                     | 626   |                    | 1,450  |  
|Loss on asset impairments                                              |  |                             |        |   |                            | 2,103   |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Operating expenses                                                     |  |                             | 27,622  |   |                            | 88,934  |   |                               |      |                               |    |                    |  |                    |  |              |  |                     | 725   |                     | 1,284 |                    | 1,321  |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Equity in income of and interest earned from unconsolidated affiliates |  |                             | 13,147  |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Operating income (loss)                                                |  |                             | (10,282 | ) |                            | 62,922  |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 561   |                     | 1,155 |                    | 6,133  |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Minority interest                                                      |  |                             | 79      |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Interest expense, net                                                  |  |                             | (77,362 | ) |                            | (35,196 | ) |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|(Loss) gain on early extinguishments of debt                           |  |                             | (7,967  | ) |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Equity in income from consolidated entities                            |  |                             | (3,957  | ) |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|(Loss) income before income taxes and discontinued operations          |  |                             | (99,489 | ) |                            | 27,726  |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 561   |                     | 1,155 |                    | 6,133  |  
|Income tax benefit                                                     |  |                             | 367     |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|(Loss) income from continuing operations                               |  |                             | (99,122 | ) |                            | 27,726  |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 561   |                     | 1,155 |                    | 6,133  |  
|Discontinued operations:                                               |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|(Loss) income from discontinued operations before income tax           |  |                             | (145    | ) |                            | 3,444   |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|Income tax benefit                                                     |  |                             | 134     |   |                            |        |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|(Loss) income from discontinued operations                             |  |                             | (11     | ) |                            | 3,444   |   |                               |      |                               |    |                    |  |                    |  |              |  |                     |      |                     |      |                    |       |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  
|Net income (loss)                                                      |  | $                           | (99,133 | ) |                            | 31,170  |   |                               | 1,439 |                               | 237 |                    |  |                    |  |              |  |                     | 561   |                     | 1,155 |                    | 6,133  |  
|                                                                       |  |                             |         |   |                            |         |   |                               |       |                               |     |                    |   |                    |   |              |   |                     |       |                     |       |                    |        |  



17



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|---------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------- | -
|                                                                       |  | MeriStarSub 1C,LLC |   |  | MeriStarSub 8E,LLC |  | MeriStarSub 7F,LLC |  | MeriStarSub 5L,LLC |  | MeriStarSub 3C,LLC |  | MeriStarSub 5R,LLC |  | MeriStarSub 8A,LLC |  | MeriStarSub 6D,LLC |  | MeriStarSub 6E,LLC |  | MeriStarSub 4E,L.P. |  
|Revenue:                                                               |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Hotel operations:                                                      |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Rooms                                                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Food and beverage                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Other hotel operations                                                 |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Office rental, parking and other revenue                               |  |                   |   |  | 29                 |  |                   |  |                   |  | 3                  |  |                   |  |                   |  | 57                 |  |                   |  |                    |  
|Participating lease revenue                                            |  | 1,185              |   |  | 1,485              |  | 926                |  | 888                |  | 1,921              |  |                   |  |                   |  | 2,122              |  | 5,914              |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Total revenue                                                          |  | 1,185              |   |  | 1,514              |  | 926                |  | 888                |  | 1,924              |  |                   |  |                   |  | 2,179              |  | 5,914              |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Hotel operating expenses:                                              |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Rooms                                                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Food and beverage                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Other hotel operating expenses                                         |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Office rental, parking and other expenses                              |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Other operating expenses:                                              |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|General and administrative, hotel                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|General and administrative, corporate                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Property operating costs                                               |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Depreciation and amortization                                          |  | 1,419              |   |  | 594                |  | 316                |  | 155                |  | 698                |  |                   |  |                   |  | 484                |  | 1,596              |  |                    |  
|Property taxes, insurance and other                                    |  | 702                |   |  | 198                |  | 124                |  | 137                |  | 392                |  |                   |  |                   |  | 310                |  | 521                |  |                    |  
|Loss on asset impairments                                              |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Operating expenses                                                     |  | 2,121              |   |  | 792                |  | 440                |  | 292                |  | 1,090              |  |                   |  |                   |  | 794                |  | 2,117              |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Operating income (loss)                                                |  | (936               | ) |  | 722                |  | 486                |  | 596                |  | 834                |  |                   |  |                   |  | 1,385              |  | 3,797              |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Minority interest                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Interest expense, net                                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|(Loss) gain on early extinguishments of debt                           |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|Equity in income from consolidated entities                            |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|(Loss) income before income taxes and discontinued operations          |  | (936               | ) |  | 722                |  | 486                |  | 596                |  | 834                |  |                   |  |                   |  | 1,385              |  | 3,797              |  |                    |  
|Income tax benefit                                                     |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|(Loss) income from continuing operations                               |  | (936               | ) |  | 722                |  | 486                |  | 596                |  | 834                |  |                   |  |                   |  | 1,385              |  | 3,797              |  |                    |  
|Discontinued operations:                                               |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|(Loss) income from discontinued operations before income tax           |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  | (1,058              | )
|Income tax benefit                                                     |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                    |  
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|(Loss) income from discontinued operations                             |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                   |  | (1,058              | )
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  
|Net income (loss)                                                      |  | (936               | ) |  | 722                |  | 486                |  | 596                |  | 834                |  |                   |  |                   |  | 1,385              |  | 3,797              |  | (1,058              | )
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                    |  |                     |  



18



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|---------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- |  | ------------------ |  | ------------------ | - |  | ------------------- |  | ------------------- | - |  | ------------------ |  | ------------------ |  | ------------------ | - |  | ---------------------------- | -
|                                                                       |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |  | MeriStarSub 6G,LLC |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P. |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |  | MeriStarSub 3D,LLC |  | MeriStarSub 1A,LLC |   |  | MeriStar Sub 7AJoint Venture |  
|Revenue:                                                               |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Hotel operations:                                                      |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Rooms                                                                  |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Food and beverage                                                      |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Other hotel operations                                                 |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Office rental, parking and other revenue                               |  | (4                 | ) |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  | 1                  |  |                   |  |                   |   |  |                             |  
|Participating lease revenue                                            |  | 2,090              |   |  | 1,949               |  | 3,532              |  |                   |   |  |                    |  |                    |   |  | 1,379              |  | 1,488              |  | 1,690              |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Total revenue                                                          |  | 2,086              |   |  | 1,949               |  | 3,532              |  |                   |   |  |                    |  |                    |   |  | 1,380              |  | 1,488              |  | 1,690              |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Hotel operating expenses:                                              |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Rooms                                                                  |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Food and beverage                                                      |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Other hotel operating expenses                                         |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Office rental, parking and other expenses                              |  | 3                  |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  | 95                 |   |  |                             |  
|Other operating expenses:                                              |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|General and administrative, hotel                                      |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|General and administrative, corporate                                  |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Property operating costs                                               |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Depreciation and amortization                                          |  | 493                |   |  | 772                 |  | 724                |  |                   |   |  |                    |  |                    |   |  | 651                |  | 703                |  | 279                |   |  |                             |  
|Property taxes, insurance and other                                    |  | 142                |   |  | 353                 |  | 392                |  |                   |   |  |                    |  |                    |   |  | 200                |  | 217                |  | 403                |   |  |                             |  
|Loss on asset impairments                                              |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  | 2,871              |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Operating expenses                                                     |  | 638                |   |  | 1,125               |  | 1,116              |  |                   |   |  |                    |  |                    |   |  | 851                |  | 920                |  | 3,648              |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Operating income (loss)                                                |  | 1,448              |   |  | 824                 |  | 2,416              |  |                   |   |  |                    |  |                    |   |  | 529                |  | 568                |  | (1,958             | ) |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Minority interest                                                      |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Interest expense, net                                                  |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|(Loss) gain on early extinguishments of debt                           |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|Equity in income from consolidated entities                            |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|(Loss) income before income taxes and discontinued operations          |  | 1,448              |   |  | 824                 |  | 2,416              |  |                   |   |  |                    |  |                    |   |  | 529                |  | 568                |  | (1,958             | ) |  |                             |  
|Income tax benefit                                                     |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|(Loss) income from continuing operations                               |  | 1,448              |   |  | 824                 |  | 2,416              |  |                   |   |  |                    |  |                    |   |  | 529                |  | 568                |  | (1,958             | ) |  |                             |  
|Discontinued operations:                                               |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|(Loss) income from discontinued operations before income tax           |  |                   |   |  |                    |  |                   |  | (61                | ) |  |                    |  | (403                | ) |  |                   |  |                   |  |                   |   |  | (732                         | )
|Income tax benefit                                                     |  |                   |   |  |                    |  |                   |  |                   |   |  |                    |  |                    |   |  |                   |  |                   |  |                   |   |  |                             |  
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|(Loss) income from discontinued operations                             |  |                   |   |  |                    |  |                   |  | (61                | ) |  |                    |  | (403                | ) |  |                   |  |                   |  |                   |   |  | (732                         | )
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  
|Net income (loss)                                                      |  | 1,448              |   |  | 824                 |  | 2,416              |  | (61                | ) |  |                    |  | (403                | ) |  | 529                |  | 568                |  | (1,958             | ) |  | (732                         | )
|                                                                       |  |                    |   |  |                     |  |                    |  |                    |   |  |                     |  |                     |   |  |                    |  |                    |  |                    |   |  |                              |  



19



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|---------------------------------------------------------------------- |  | ------------------ |  | ------------------ |  | ----------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | --------------------- |  | ------------------ |  | ------------------ |  | ------------------
|                                                                       |  | MeriStarSub 2B,LLC |  | MeriStarSub 3A,LLC |  | MeriStarSub 4A,LP |  | MeriStarSub 4D,LLC |  | MeriStarSub 2A,LLC |  | MeriStarSub 6L,LLC |  | MDVLimitedPartnership |  | MeriStarSub 5C,LLC |  | MeriStarSub 6J,LLC |  | MeriStarSub 1D,LLC
|Revenue:                                                               |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Hotel operations:                                                      |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Other hotel operations                                                 |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Office rental, parking and other revenue                               |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  | 8                 
|Participating lease revenue                                            |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 518                   |  |                   |  | 2,651              |  | 5,296             
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Total revenue                                                          |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 518                   |  |                   |  | 2,651              |  | 5,304             
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Hotel operating expenses:                                              |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Other hotel operating expenses                                         |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Office rental, parking and other expenses                              |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  | 102               
|Other operating expenses:                                              |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|General and administrative, hotel                                      |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|General and administrative, corporate                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Property operating costs                                               |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Depreciation and amortization                                          |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 154                   |  |                   |  | 556                |  | 2,286             
|Property taxes, insurance and other                                    |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 69                    |  |                   |  | 297                |  | 1,459             
|Loss on asset impairments                                              |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Operating expenses                                                     |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 223                   |  |                   |  | 853                |  | 3,847             
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Operating income (loss)                                                |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 295                   |  |                   |  | 1,798              |  | 1,457             
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Minority interest                                                      |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Interest expense, net                                                  |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|(Loss) gain on early extinguishments of debt                           |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|Equity in income from consolidated entities                            |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|(Loss) income before income taxes and discontinued operations          |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 295                   |  |                   |  | 1,798              |  | 1,457             
|Income tax benefit                                                     |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|(Loss) income from continuing operations                               |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  | 295                   |  |                   |  | 1,798              |  | 1,457             
|Discontinued operations:                                               |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|(Loss) income from discontinued operations before income tax           |  |                   |  | 89                 |  | 97                |  |                   |  |                   |  | 1,852              |  |                      |  |                   |  |                   |  |                  
|Income tax benefit                                                     |  |                   |  |                   |  |                  |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|(Loss) income from discontinued operations                             |  |                   |  | 89                 |  | 97                |  |                   |  |                   |  | 1,852              |  |                      |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   
|Net income (loss)                                                      |  |                   |  | 89                 |  | 97                |  |                   |  |                   |  | 1,852              |  | 295                   |  |                   |  | 1,798              |  | 1,457             
|                                                                       |  |                    |  |                    |  |                   |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                   



20



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|---------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------- |  | ------------------
|                                                                       |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |  | MeriStarSub 7G,LLC |  | MeriStarSub 6B,LLC |  | MeriStarSub 4I,L.P. |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |  | MeriStarSub 7H,LLC |  | AGHPSS I,Inc. |  | MeriStarSub 2D,LLC
|Revenue:                                                               |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Hotel operations:                                                      |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Rooms                                                                  |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Food and beverage                                                      |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Other hotel operations                                                 |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Office rental, parking and other revenue                               |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Participating lease revenue                                            |  |                    |   |  | 7,368              |  |                   |  | 1,160              |  |                    |  | 2,189              |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Total revenue                                                          |  |                    |   |  | 7,368              |  |                   |  | 1,160              |  |                    |  | 2,189              |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Hotel operating expenses:                                              |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Rooms                                                                  |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Food and beverage                                                      |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Other hotel operating expenses                                         |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Office rental, parking and other expenses                              |  |                    |   |  | 718                |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Other operating expenses:                                              |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|General and administrative, hotel                                      |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|General and administrative, corporate                                  |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Property operating costs                                               |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Depreciation and amortization                                          |  |                    |   |  | 1,572              |  |                   |  | 448                |  |                    |  | 1,432              |   |  |                   |  |                   |  |              |  |                  
|Property taxes, insurance and other                                    |  |                    |   |  | 1,200              |  |                   |  | 223                |  |                    |  | 194                |   |  |                   |  |                   |  |              |  |                  
|Loss on asset impairments                                              |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Operating expenses                                                     |  |                    |   |  | 3,490              |  |                   |  | 671                |  |                    |  | 1,626              |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Equity in income of and interest earned from unconsolidated affiliates |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Operating income (loss)                                                |  |                    |   |  | 3,878              |  |                   |  | 489                |  |                    |  | 563                |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Minority interest                                                      |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Interest expense, net                                                  |  |                    |   |  |                   |  |                   |  |                   |  |                    |  | (1,367             | ) |  |                   |  |                   |  |              |  |                  
|(Loss) gain on early extinguishments of debt                           |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Equity in income from consolidated entities                            |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|(Loss) income before income taxes and discontinued operations          |  |                    |   |  | 3,878              |  |                   |  | 489                |  |                    |  | (804               | ) |  |                   |  |                   |  |              |  |                  
|Income tax benefit                                                     |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|(Loss) income from continuing operations                               |  |                    |   |  | 3,878              |  |                   |  | 489                |  |                    |  | (804               | ) |  |                   |  |                   |  |              |  |                  
|Discontinued operations:                                               |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|(Loss) income from discontinued operations before income tax           |  | (787                | ) |  |                   |  | 103                |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|Income tax benefit                                                     |  |                    |   |  |                   |  |                   |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|(Loss) income from discontinued operations                             |  | (787                | ) |  |                   |  | 103                |  |                   |  |                    |  |                   |   |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   
|Net income (loss)                                                      |  | (787                | ) |  | 3,878              |  | 103                |  | 489                |  |                    |  | (804               | ) |  |                   |  |                   |  |              |  |                  
|                                                                       |  |                     |   |  |                    |  |                    |  |                    |  |                     |  |                    |   |  |                    |  |                    |  |               |  |                   



21



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|---------------------------------------------------------------------- |  | ------------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ |  | -------------------
|                                                                       |  | MeriStarSub 4F,L.P. |  | MeriStarSub 5K,LLC |  | MeriStarSub 5M,LLC |  | MeriStarSub 1E,LLC |  | MeriStarSub 5O,LLC |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |  | MeriStarSub 5G,L.P.
|Revenue:                                                               |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Hotel operations:                                                      |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Rooms                                                                  |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Food and beverage                                                      |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Other hotel operations                                                 |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Office rental, parking and other revenue                               |  | 17                  |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 26                 
|Participating lease revenue                                            |  | 1,967               |  |                   |  | 1,149              |  |                   |  | 542                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 10,397             
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Total revenue                                                          |  | 1,984               |  |                   |  | 1,149              |  |                   |  | 542                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 10,423             
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Hotel operating expenses:                                              |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Rooms                                                                  |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Food and beverage                                                      |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Other hotel operating expenses                                         |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Office rental, parking and other expenses                              |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 8                  
|Other operating expenses:                                              |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|General and administrative, hotel                                      |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|General and administrative, corporate                                  |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Property operating costs                                               |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Depreciation and amortization                                          |  | 1,114               |  |                   |  | 423                |  |                   |  | 210                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 6,364              
|Property taxes, insurance and other                                    |  | 367                 |  |                   |  | 243                |  |                   |  | 95                 |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 1,537              
|Loss on asset impairments                                              |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Operating expenses                                                     |  | 1,481               |  |                   |  | 666                |  |                   |  | 305                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 7,909              
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Equity in income of and interest earned from unconsolidated affiliates |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Operating income (loss)                                                |  | 503                 |  |                   |  | 483                |  |                   |  | 237                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 2,514              
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Minority interest                                                      |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Interest expense, net                                                  |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|(Loss) gain on early extinguishments of debt                           |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|Equity in income from consolidated entities                            |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|(Loss) income before income taxes and discontinued operations          |  | 503                 |  |                   |  | 483                |  |                   |  | 237                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 2,514              
|Income tax benefit                                                     |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|(Loss) income from continuing operations                               |  | 503                 |  |                   |  | 483                |  |                   |  | 237                |  |                    |   |  |                   |   |  |                    |   |  |                   |  | 2,514              
|Discontinued operations:                                               |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|(Loss) income from discontinued operations before income tax           |  |                    |  | 1,835              |  |                   |  |                   |  |                   |  | (217                | ) |  | (2,242             | ) |  | (373                | ) |  |                   |  |                   
|Income tax benefit                                                     |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  |                   
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|(Loss) income from discontinued operations                             |  |                    |  | 1,835              |  |                   |  |                   |  |                   |  | (217                | ) |  | (2,242             | ) |  | (373                | ) |  |                   |  |                   
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    
|Net income (loss)                                                      |  | 503                 |  | 1,835              |  | 483                |  |                   |  | 237                |  | (217                | ) |  | (2,242             | ) |  | (373                | ) |  |                   |  | 2,514              
|                                                                       |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  |                    



22



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|---------------------------------------------------------------------- |  | ------------------ |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------------ | - |  | ------------------ |  | ------------------
|                                                                       |  | MeriStarSub 5N,LLC |  | MeriStarSub 5P,LLC |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |  | MeristarPentagonCity,LLC |   |  | MeriStarSub 6K,LLC |  | MeriStarSub 5E,LLC
|Revenue:                                                               |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Hotel operations:                                                      |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Other hotel operations                                                 |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Office rental, parking and other revenue                               |  |                   |  |                   |  |                   |   |  |                   |  | 85                 |   |  |                   |   |  | 5                  |  |                         |   |  |                   |  |                  
|Participating lease revenue                                            |  | 591                |  | 636                |  | 6,380              |   |  | 1,314              |  | 6,055              |   |  |                   |   |  | 3,038              |  | 6,218                    |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Total revenue                                                          |  | 591                |  | 636                |  | 6,380              |   |  | 1,314              |  | 6,140              |   |  |                   |   |  | 3,043              |  | 6,218                    |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Hotel operating expenses:                                              |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Other hotel operating expenses                                         |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Office rental, parking and other expenses                              |  |                   |  |                   |  | 28                 |   |  |                   |  | 6                  |   |  |                   |   |  | 447                |  | 12                       |   |  |                   |  |                  
|Other operating expenses:                                              |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|General and administrative, hotel                                      |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|General and administrative, corporate                                  |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Property operating costs                                               |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Depreciation and amortization                                          |  | 123                |  | 5                  |  | 5,171              |   |  | 565                |  | 1,081              |   |  |                   |   |  | 1,272              |  | 3,515                    |   |  |                   |  |                  
|Property taxes, insurance and other                                    |  | 98                 |  | 6                  |  | 1,224              |   |  | 251                |  | 810                |   |  |                   |   |  | 374                |  | 1,231                    |   |  |                   |  |                  
|Loss on asset impairments                                              |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Operating expenses                                                     |  | 221                |  | 11                 |  | 6,423              |   |  | 816                |  | 1,897              |   |  |                   |   |  | 2,093              |  | 4,758                    |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Operating income (loss)                                                |  | 370                |  | 625                |  | (43                | ) |  | 498                |  | 4,243              |   |  |                   |   |  | 950                |  | 1,460                    |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Minority interest                                                      |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Interest expense, net                                                  |  |                   |  |                   |  |                   |   |  |                   |  | (2,833             | ) |  |                   |   |  |                   |  | (1,621                   | ) |  |                   |  |                  
|(Loss) gain on early extinguishments of debt                           |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|Equity in income from consolidated entities                            |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|(Loss) income before income taxes and discontinued operations          |  | 370                |  | 625                |  | (43                | ) |  | 498                |  | 1,410              |   |  |                   |   |  | 950                |  | (161                     | ) |  |                   |  |                  
|Income tax benefit                                                     |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|(Loss) income from continuing operations                               |  | 370                |  | 625                |  | (43                | ) |  | 498                |  | 1,410              |   |  |                   |   |  | 950                |  | (161                     | ) |  |                   |  |                  
|Discontinued operations:                                               |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|(Loss) income from discontinued operations before income tax           |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  | (857               | ) |  |                   |  |                         |   |  |                   |  |                  
|Income tax benefit                                                     |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                         |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|(Loss) income from discontinued operations                             |  |                   |  |                   |  |                   |   |  |                   |  |                   |   |  | (857               | ) |  |                   |  |                         |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   
|Net income (loss)                                                      |  | 370                |  | 625                |  | (43                | ) |  | 498                |  | 1,410              |   |  | (857               | ) |  | 950                |  | (161                     | ) |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                          |   |  |                    |  |                   



23



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2004

(Dollars in thousands)



|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|---------------------------------------------------------------------- |  | ------------------ |  | ------------------ |  | ----------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------------- | - |  | --------------------- | - |  | -------------------------- | - |  | ------------------------- | - |  | ----------------- | -------- | -
|                                                                       |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotelLessee, Inc. |   |  | GuarantorEliminations |   |  | GuarantorSubsidiariesTotal |   |  | ConsolidationEliminations |   |  | TotalConsolidated |         
|Revenue:                                                               |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Hotel operations:                                                      |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Rooms                                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 507,897                   |   |  |                      |   |  | 507,897                    |   |  |                          |   |  | $                 | 507,897  |  
|Food and beverage                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 212,132                   |   |  |                      |   |  | 212,132                    |   |  |                          |   |  |                   | 212,132  |  
|Other hotel operations                                                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 54,111                    |   |  |                      |   |  | 54,111                     |   |  |                          |   |  |                   | 54,111   |  
|Office rental, parking and other revenue                               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 160                       |   |  |                      |   |  | 422                        |   |  |                          |   |  |                   | 5,032    |  
|Participating lease revenue                                            |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 1,439                     |   |  | (1,439                | ) |  | 96,858                     |   |  | (248,297                  | ) |  |                   |         |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Total revenue                                                          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 775,739                   |   |  | (1,439                | ) |  | 871,420                    |   |  | (248,297                  | ) |  |                   | 779,172  |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Hotel operating expenses:                                              |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Rooms                                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 129,007                   |   |  |                      |   |  | 129,007                    |   |  |                          |   |  |                   | 129,007  |  
|Food and beverage                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 153,150                   |   |  |                      |   |  | 153,150                    |   |  |                          |   |  |                   | 153,150  |  
|Other hotel operating expenses                                         |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 34,480                    |   |  |                      |   |  | 34,480                     |   |  |                          |   |  |                   | 34,480   |  
|Office rental, parking and other expenses                              |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 2,394                     |   |  |                      |   |  | 1,201                      |   |  |                          |   |  |                   | 2,395    |  
|Other operating expenses:                                              |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|General and administrative, hotel                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 123,502                   |   |  |                      |   |  | 123,502                    |   |  |                          |   |  |                   | 123,502  |  
|General and administrative, corporate                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 238                       |   |  |                      |   |  | 238                        |   |  |                          |   |  |                   | 14,215   |  
|Property operating costs                                               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 117,077                   |   |  |                      |   |  | 117,077                    |   |  |                          |   |  |                   | 117,077  |  
|Depreciation and amortization                                          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 98                        |   |  |                      |   |  | 39,041                     |   |  |                          |   |  |                   | 98,786   |  
|Property taxes, insurance and other                                    |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 249,782                   |   |  |                      |   |  | 265,725                    |   |  | (248,297                  | ) |  |                   | 56,965   |  
|Loss on asset impairments                                              |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  | 2,871                      |   |  |                          |   |  |                   | 4,974    |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Operating expenses                                                     |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 809,728                   |   |  |                      |   |  | 866,292                    |   |  | (248,297                  | ) |  |                   | 734,551  |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 13,147   |  
|Operating income (loss)                                                |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (33,989                   | ) |  | (1,439                | ) |  | 5,128                      |   |  |                          |   |  |                   | 57,768   |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Minority interest                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 79       |  
|Interest expense, net                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (8,548                    | ) |  |                      |   |  | (14,369                    | ) |  |                          |   |  |                   | (126,927 | )
|(Loss) gain on early extinguishments of debt                           |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (7,967   | )
|Equity in income from consolidated entities                            |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  | 3,957                     |   |  |                   |         |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|(Loss) income before income taxes and discontinued operations          |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (42,537                   | ) |  | (1,439                | ) |  | (9,241                     | ) |  | 3,957                     |   |  |                   | (77,047  | )
|Income tax benefit                                                     |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 367      |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|(Loss) income from continuing operations                               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (42,537                   | ) |  | (1,439                | ) |  | (9,241                     | ) |  | 3,957                     |   |  |                   | (76,680  | )
|Discontinued operations:                                               |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|(Loss) income from discontinued operations before income tax           |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (23,132                   | ) |  |                      |   |  | (25,886                    | ) |  |                          |   |  |                   | (22,587  | )
|Income tax benefit                                                     |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                          |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 134      |  
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|(Loss) income from discontinued operations                             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (23,132                   | ) |  |                      |   |  | (25,886                    | ) |  |                          |   |  |                   | (22,453  | )
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net income (loss)                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (65,669                   | ) |  | (1,439                | ) |  | (35,127                    | ) |  | 3,957                     |   |  | $                 | (99,133  | )
|                                                                       |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                           |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  



24



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|-------------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | -------------------------- | ------- | - | ------------------ | - | ------------ | - | ------------------ | --- | ------------------ | - | ------------------- | ----- | ------------------ | - | ------------------- | ----- | ------------------ | -----
|                                                                                                         |  | MeriStarHospitality OP,L.P. |          |   | Non- GuarantorSubsidiaries |         |   | MeriStarSub 7C,LLC |   | AGHUpreitLLC |   | MeriStarSub 5N,LLC |     | MeriStarSub 8A,LLC |   | MeriStarSub 8F,L.P. |       | MeriStarSub 8G,LLC |   | MeriStarSub 6H,L.P. |       | MeriStarSub 8B,LLC
|Revenue:                                                                                                 |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Hotel operations:                                                                                        |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Rooms                                                                                                    |  | $                           |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Food and beverage                                                                                        |  |                             |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Other hotel operations                                                                                   |  |                             |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Office rental, parking and other revenue                                                                 |  |                             | (258     | ) |                            | 3,810   |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Participating lease revenue                                                                              |  |                             |         |   |                            | 130,138 |   |                    |  |              |  |                    | 851 |                    |  |                     | 2,345 |                    |  |                     | 1,172 |                    | 7,273
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Total revenue                                                                                            |  |                             | (258     | ) |                            | 133,948 |   |                    |  |              |  |                    | 851 |                    |  |                     | 2,345 |                    |  |                     | 1,172 |                    | 7,273
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Hotel operating expenses:                                                                                |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Rooms                                                                                                    |  |                             |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Food and beverage                                                                                        |  |                             |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Other hotel operating expenses                                                                           |  |                             |         |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Office rental, parking and other expenses                                                                |  |                             |         |   |                            | 1,147   |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Other operating expenses:                                                                                |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|General and administrative, hotel                                                                        |  |                             |         |   |                            | 11      |   |                    |  |              |  |                    |    |                    |  |                     | 1     |                    |  |                     |      |                    | 1    
|General and administrative, corporate                                                                    |  |                             | 11,913   |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Property operating costs                                                                                 |  |                             | (2,453   | ) |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Depreciation and amortization                                                                            |  |                             | 13,482   |   |                            | 42,724  |   |                    |  |              |  |                    | 137 |                    |  |                     | 587   |                    |  |                     | 569   |                    | 2,416
|Property taxes, insurance and other                                                                      |  |                             | (1,489   | ) |                            | 36,800  |   |                    |  |              |  |                    | 102 |                    |  |                     | 549   |                    |  |                     | 93    |                    | 1,415
|Loss on asset impairments                                                                                |  |                             |         |   |                            | 15,566  |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     | 500   |                    |     
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Operating expenses                                                                                       |  |                             | 21,453   |   |                            | 96,248  |   |                    |  |              |  |                    | 239 |                    |  |                     | 1,137 |                    |  |                     | 1,162 |                    | 3,832
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                             | (17,631  | ) |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Operating income (loss)                                                                                  |  |                             | (39,342  | ) |                            | 37,700  |   |                    |  |              |  |                    | 612 |                    |  |                     | 1,208 |                    |  |                     | 10    |                    | 3,441
|Minority interest                                                                                        |  |                             | 62       |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Interest expense, net                                                                                    |  |                             | (105,834 | ) |                            | (27,857 | ) |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|(Loss) gain on early extinguishments of debt                                                             |  |                             | 4,085    |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Equity in income from consolidated entities                                                              |  |                             | (270,566 | ) |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income before income taxes and discontinued operations                                            |  |                             | (411,595 | ) |                            | 9,843   |   |                    |  |              |  |                    | 612 |                    |  |                     | 1,208 |                    |  |                     | 10    |                    | 3,441
|Income tax benefit                                                                                       |  |                             | 3,689    |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from continuing operations                                                                 |  |                             | (407,906 | ) |                            | 9,843   |   |                    |  |              |  |                    | 612 |                    |  |                     | 1,208 |                    |  |                     | 10    |                    | 3,441
|Discontinued operations:                                                                                 |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from discontinued operations before income tax                                             |  |                             | 3,402    |   |                            | (98,676 | ) |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|Income tax benefit                                                                                       |  |                             | 67       |   |                            |        |   |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from discontinued operations                                                               |  |                             | 3,469    |   |                            | (98,676 | ) |                    |  |              |  |                    |    |                    |  |                     |      |                    |  |                     |      |                    |     
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      
|Net income (loss)                                                                                        |  | $                           | (404,437 | ) |                            | (88,833 | ) |                    |  |              |  |                    | 612 |                    |  |                     | 1,208 |                    |  |                     | 10    |                    | 3,441
|                                                                                                         |  |                             |          |   |                            |         |   |                    |   |              |   |                    |     |                    |   |                     |       |                    |   |                     |       |                    |      



25



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------- | - |  | ------------------ | -
|                                                                                                         |  | MeriStarSub 1C,LLC |   |  | MeriStarSub 8E,LLC |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |  | MeriStarSub 5R,LLC |  | MeriStarSub 6D,LLC |  | MeriStarSub 6E,LLC |  | MeriStarSub 4E,L.P. |   |  | MeriStarSub 1B,LLC |  
|Revenue:                                                                                                 |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Hotel operations:                                                                                        |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Rooms                                                                                                    |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Food and beverage                                                                                        |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Other hotel operations                                                                                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Office rental, parking and other revenue                                                                 |  |                   |   |  | 47                 |  |                   |   |  |                   |   |  | 2                  |  |                   |  | 194                |  |                   |  |                    |   |  | 338                |  
|Participating lease revenue                                                                              |  | 1,211              |   |  | 1,449              |  | 935                |   |  | 955                |   |  | 1,710              |  |                   |  | 1,794              |  | 5,213              |  |                    |   |  | 2,485              |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Total revenue                                                                                            |  | 1,211              |   |  | 1,496              |  | 935                |   |  | 955                |   |  | 1,712              |  |                   |  | 1,988              |  | 5,213              |  |                    |   |  | 2,823              |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Hotel operating expenses:                                                                                |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Rooms                                                                                                    |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Food and beverage                                                                                        |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Other hotel operating expenses                                                                           |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Office rental, parking and other expenses                                                                |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Other operating expenses:                                                                                |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|General and administrative, hotel                                                                        |  | 1                  |   |  | 1                  |  |                   |   |  |                   |   |  | 1                  |  |                   |  | 1                  |  |                   |  |                    |   |  |                   |  
|General and administrative, corporate                                                                    |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Property operating costs                                                                                 |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Depreciation and amortization                                                                            |  | 1,015              |   |  | 583                |  | 425                |   |  | 142                |   |  | 709                |  |                   |  | 546                |  | 1,629              |  |                    |   |  | 535                |  
|Property taxes, insurance and other                                                                      |  | 773                |   |  | 215                |  | 161                |   |  | 129                |   |  | 407                |  |                   |  | 329                |  | 671                |  |                    |   |  | 155                |  
|Loss on asset impairments                                                                                |  |                   |   |  |                   |  | 2,037              |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Operating expenses                                                                                       |  | 1,789              |   |  | 799                |  | 2,623              |   |  | 271                |   |  | 1,117              |  |                   |  | 876                |  | 2,300              |  |                    |   |  | 690                |  
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Operating income (loss)                                                                                  |  | (578               | ) |  | 697                |  | (1,688             | ) |  | 684                |   |  | 595                |  |                   |  | 1,112              |  | 2,913              |  |                    |   |  | 2,133              |  
|Minority interest                                                                                        |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Interest expense, net                                                                                    |  |                   |   |  |                   |  |                   |   |  | (2                 | ) |  |                   |  |                   |  |                   |  |                   |  |                    |   |  | (13                | )
|(Loss) gain on early extinguishments of debt                                                             |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|Equity in income from consolidated entities                                                              |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|(Loss) income before income taxes and discontinued operations                                            |  | (578               | ) |  | 697                |  | (1,688             | ) |  | 682                |   |  | 595                |  |                   |  | 1,112              |  | 2,913              |  |                    |   |  | 2,120              |  
|Income tax benefit                                                                                       |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|(Loss) income from continuing operations                                                                 |  | (578               | ) |  | 697                |  | (1,688             | ) |  | 682                |   |  | 595                |  |                   |  | 1,112              |  | 2,913              |  |                    |   |  | 2,120              |  
|Discontinued operations:                                                                                 |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|(Loss) income from discontinued operations before income tax                                             |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  | (14,966             | ) |  |                   |  
|Income tax benefit                                                                                       |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|(Loss) income from discontinued operations                                                               |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                   |  | (14,966             | ) |  |                   |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  
|Net income (loss)                                                                                        |  | (578               | ) |  | 697                |  | (1,688             | ) |  | 682                |   |  | 595                |  |                   |  | 1,112              |  | 2,913              |  | (14,966             | ) |  | 2,120              |  
|                                                                                                         |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |  



26



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------- | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | -------------------------- | -
|                                                                                                         |  | MeriStarSub 5F,L.P. |   |  | MeriStarSub 6G,LLC |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |  | MeriStarSub 3D,LLC |  | MeriStarSub 1A,LLC |  | MeriStarSub 5E,LLC |  | MeriStarSub 7AJointVenture |  
|Revenue:                                                                                                 |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Hotel operations:                                                                                        |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Rooms                                                                                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Food and beverage                                                                                        |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Other hotel operations                                                                                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Office rental, parking and other revenue                                                                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  | 1                  |  |                   |  |                   |  |                           |  
|Participating lease revenue                                                                              |  | 2,625               |   |  | 2,527              |  |                   |   |  |                   |  |                    |   |  | 1,345              |  | 1,431              |  | 1,798              |  | 3,934              |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Total revenue                                                                                            |  | 2,625               |   |  | 2,527              |  |                   |   |  |                   |  |                    |   |  | 1,345              |  | 1,432              |  | 1,798              |  | 3,934              |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Hotel operating expenses:                                                                                |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Rooms                                                                                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Food and beverage                                                                                        |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Other hotel operating expenses                                                                           |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Office rental, parking and other expenses                                                                |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Other operating expenses:                                                                                |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|General and administrative, hotel                                                                        |  |                    |   |  | 1                  |  |                   |   |  |                   |  |                    |   |  | 1                  |  |                   |  |                   |  |                   |  |                           |  
|General and administrative, corporate                                                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Property operating costs                                                                                 |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Depreciation and amortization                                                                            |  | 941                 |   |  | 848                |  |                   |   |  |                   |  |                    |   |  | 615                |  | 776                |  | 450                |  | 1,438              |  |                           |  
|Property taxes, insurance and other                                                                      |  | 396                 |   |  | 376                |  |                   |   |  |                   |  |                    |   |  | 196                |  | 233                |  | 421                |  | 302                |  |                           |  
|Loss on asset impairments                                                                                |  | 9,231               |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Operating expenses                                                                                       |  | 10,568              |   |  | 1,225              |  |                   |   |  |                   |  |                    |   |  | 812                |  | 1,009              |  | 871                |  | 1,740              |  |                           |  
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Operating income (loss)                                                                                  |  | (7,943              | ) |  | 1,302              |  |                   |   |  |                   |  |                    |   |  | 533                |  | 423                |  | 927                |  | 2,194              |  |                           |  
|Minority interest                                                                                        |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Interest expense, net                                                                                    |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|(Loss) gain on early extinguishments of debt                                                             |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|Equity in income from consolidated entities                                                              |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|(Loss) income before income taxes and discontinued operations                                            |  | (7,943              | ) |  | 1,302              |  |                   |   |  |                   |  |                    |   |  | 533                |  | 423                |  | 927                |  | 2,194              |  |                           |  
|Income tax benefit                                                                                       |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|(Loss) income from continuing operations                                                                 |  | (7,943              | ) |  | 1,302              |  |                   |   |  |                   |  |                    |   |  | 533                |  | 423                |  | 927                |  | 2,194              |  |                           |  
|Discontinued operations:                                                                                 |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|(Loss) income from discontinued operations before income tax                                             |  |                    |   |  |                   |  | (4,555             | ) |  |                   |  | (5,491              | ) |  |                   |  |                   |  |                   |  |                   |  | (4,907                     | )
|Income tax benefit                                                                                       |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |  |                   |  |                   |  |                   |  |                           |  
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|(Loss) income from discontinued operations                                                               |  |                    |   |  |                   |  | (4,555             | ) |  |                   |  | (5,491              | ) |  |                   |  |                   |  |                   |  |                   |  | (4,907                     | )
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  
|Net income (loss)                                                                                        |  | (7,943              | ) |  | 1,302              |  | (4,555             | ) |  |                   |  | (5,491              | ) |  | 533                |  | 423                |  | 927                |  | 2,194              |  | (4,907                     | )
|                                                                                                         |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |  |                    |  |                    |  |                    |  |                            |  



27



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|-------------------------------------------------------------------------------------------------------- |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ----------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | --------------------- |  | ------------------ | - |  | ------------------
|                                                                                                         |  | MeriStarSub 6K,LLC |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |   |  | MeriStarSub 4A,LP |   |  | MeriStarSub 4D,LLC |   |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |   |  | MDVLimitedPartnership |  | MeriStarSub 5C,LLC |   |  | MeriStarSub 6J,LLC
|Revenue:                                                                                                 |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Hotel operations:                                                                                        |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Rooms                                                                                                    |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Food and beverage                                                                                        |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Other hotel operations                                                                                   |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Office rental, parking and other revenue                                                                 |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Participating lease revenue                                                                              |  | 2,980              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 506                   |  |                   |   |  | 2,148             
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Total revenue                                                                                            |  | 2,980              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 506                   |  |                   |   |  | 2,148             
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Hotel operating expenses:                                                                                |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Rooms                                                                                                    |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Food and beverage                                                                                        |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Other hotel operating expenses                                                                           |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Office rental, parking and other expenses                                                                |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Other operating expenses:                                                                                |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|General and administrative, hotel                                                                        |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|General and administrative, corporate                                                                    |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Property operating costs                                                                                 |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Depreciation and amortization                                                                            |  | 538                |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 139                   |  |                   |   |  | 581               
|Property taxes, insurance and other                                                                      |  | 288                |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 139                   |  |                   |   |  | 262               
|Loss on asset impairments                                                                                |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Operating expenses                                                                                       |  | 826                |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 278                   |  |                   |   |  | 843               
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Operating income (loss)                                                                                  |  | 2,154              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 228                   |  |                   |   |  | 1,305             
|Minority interest                                                                                        |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Interest expense, net                                                                                    |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  | 2                 
|(Loss) gain on early extinguishments of debt                                                             |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|Equity in income from consolidated entities                                                              |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|(Loss) income before income taxes and discontinued operations                                            |  | 2,154              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 228                   |  |                   |   |  | 1,307             
|Income tax benefit                                                                                       |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|(Loss) income from continuing operations                                                                 |  | 2,154              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 228                   |  |                   |   |  | 1,307             
|Discontinued operations:                                                                                 |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|(Loss) income from discontinued operations before income tax                                             |  |                   |  | (6,486             | ) |  | (1,933             | ) |  | (845              | ) |  | (939               | ) |  | (5,037             | ) |  | (12,550            | ) |  |                      |  | (5,634             | ) |  |                  
|Income tax benefit                                                                                       |  |                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                      |  |                   |   |  |                  
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|(Loss) income from discontinued operations                                                               |  |                   |  | (6,486             | ) |  | (1,933             | ) |  | (845              | ) |  | (939               | ) |  | (5,037             | ) |  | (12,550            | ) |  |                      |  | (5,634             | ) |  |                  
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   
|Net income (loss)                                                                                        |  | 2,154              |  | (6,486             | ) |  | (1,933             | ) |  | (845              | ) |  | (939               | ) |  | (5,037             | ) |  | (12,550            | ) |  | 228                   |  | (5,634             | ) |  | 1,307             
|                                                                                                         |  |                    |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                       |  |                    |   |  |                   



28



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------ |  | ------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------- | -
|                                                                                                         |  | MeriStarSub 1D,LLC |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |  | MeriStarSub 7G,LLC |   |  | MeriStarSub 6B,LLC |  | MeriStarSub 4I,L.P. |   |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |   |  | MeriStarSub 7H,LLC |   |  | AGH PSS I,Inc. |  
|Revenue:                                                                                                 |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Hotel operations:                                                                                        |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Rooms                                                                                                    |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Food and beverage                                                                                        |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Other hotel operations                                                                                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Office rental, parking and other revenue                                                                 |  | 282                |  |                    |   |  | 1,964              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Participating lease revenue                                                                              |  | 4,536              |  |                    |   |  | 5,700              |  |                   |   |  | 1,082              |  |                    |   |  | 2,050              |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Total revenue                                                                                            |  | 4,818              |  |                    |   |  | 7,664              |  |                   |   |  | 1,082              |  |                    |   |  | 2,050              |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Hotel operating expenses:                                                                                |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Rooms                                                                                                    |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Food and beverage                                                                                        |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Other hotel operating expenses                                                                           |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Office rental, parking and other expenses                                                                |  | 107                |  |                    |   |  | 1,041              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Other operating expenses:                                                                                |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|General and administrative, hotel                                                                        |  |                   |  |                    |   |  |                   |  |                   |   |  | 1                  |  |                    |   |  | 1                  |   |  |                   |   |  |                   |   |  |               |  
|General and administrative, corporate                                                                    |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Property operating costs                                                                                 |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Depreciation and amortization                                                                            |  | 2,276              |  |                    |   |  | 1,722              |  |                   |   |  | 449                |  |                    |   |  | 1,459              |   |  |                   |   |  |                   |   |  |               |  
|Property taxes, insurance and other                                                                      |  | 1,583              |  |                    |   |  | 2,203              |  |                   |   |  | 203                |  |                    |   |  | 216                |   |  |                   |   |  |                   |   |  |               |  
|Loss on asset impairments                                                                                |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Operating expenses                                                                                       |  | 3,966              |  |                    |   |  | 4,966              |  |                   |   |  | 653                |  |                    |   |  | 1,676              |   |  |                   |   |  |                   |   |  |               |  
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Operating income (loss)                                                                                  |  | 852                |  |                    |   |  | 2,698              |  |                   |   |  | 429                |  |                    |   |  | 374                |   |  |                   |   |  |                   |   |  |               |  
|Minority interest                                                                                        |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Interest expense, net                                                                                    |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  | (1,153             | ) |  |                   |   |  |                   |   |  |               |  
|(Loss) gain on early extinguishments of debt                                                             |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|Equity in income from consolidated entities                                                              |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|(Loss) income before income taxes and discontinued operations                                            |  | 852                |  |                    |   |  | 2,698              |  |                   |   |  | 429                |  |                    |   |  | (779               | ) |  |                   |   |  |                   |   |  |               |  
|Income tax benefit                                                                                       |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|(Loss) income from continuing operations                                                                 |  | 852                |  |                    |   |  | 2,698              |  |                   |   |  | 429                |  |                    |   |  | (779               | ) |  |                   |   |  |                   |   |  |               |  
|Discontinued operations:                                                                                 |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|(Loss) income from discontinued operations before income tax                                             |  |                   |  | (9,925              | ) |  |                   |  | (10,327            | ) |  |                   |  | (2,614              | ) |  |                   |   |  | (17,432            | ) |  | (1,564             | ) |  | (929           | )
|Income tax benefit                                                                                       |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |  
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|(Loss) income from discontinued operations                                                               |  |                   |  | (9,925              | ) |  |                   |  | (10,327            | ) |  |                   |  | (2,614              | ) |  |                   |   |  | (17,432            | ) |  | (1,564             | ) |  | (929           | )
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  
|Net income (loss)                                                                                        |  | 852                |  | (9,925              | ) |  | 2,698              |  | (10,327            | ) |  | 429                |  | (2,614              | ) |  | (779               | ) |  | (17,432            | ) |  | (1,564             | ) |  | (929           | )
|                                                                                                         |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |  



29



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | -
|                                                                                                         |  | MeriStarSub 2D,LLC |   |  | MeriStarSub 4F,L.P. |  | MeriStarSub 5K,LLC |  | MeriStarSub 5M,LLC |  | MeriStarSub 1E,LLC |  | MeriStarSub 5O,LLC |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |  
|Revenue:                                                                                                 |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Hotel operations:                                                                                        |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Rooms                                                                                                    |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Food and beverage                                                                                        |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Other hotel operations                                                                                   |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Office rental, parking and other revenue                                                                 |  |                   |   |  | 15                  |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Participating lease revenue                                                                              |  |                   |   |  | 1,919               |  |                   |  | 1,549              |  |                   |  | 709                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Total revenue                                                                                            |  |                   |   |  | 1,934               |  |                   |  | 1,549              |  |                   |  | 709                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Hotel operating expenses:                                                                                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Rooms                                                                                                    |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Food and beverage                                                                                        |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Other hotel operating expenses                                                                           |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Office rental, parking and other expenses                                                                |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Other operating expenses:                                                                                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|General and administrative, hotel                                                                        |  |                   |   |  |                    |  |                   |  |                   |  |                   |  | 1                  |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|General and administrative, corporate                                                                    |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Property operating costs                                                                                 |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Depreciation and amortization                                                                            |  |                   |   |  | 1,107               |  |                   |  | 472                |  |                   |  | 228                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Property taxes, insurance and other                                                                      |  |                   |   |  | 344                 |  |                   |  | 264                |  |                   |  | 103                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Loss on asset impairments                                                                                |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Operating expenses                                                                                       |  |                   |   |  | 1,451               |  |                   |  | 736                |  |                   |  | 332                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Operating income (loss)                                                                                  |  |                   |   |  | 483                 |  |                   |  | 813                |  |                   |  | 377                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Minority interest                                                                                        |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Interest expense, net                                                                                    |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|(Loss) gain on early extinguishments of debt                                                             |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Equity in income from consolidated entities                                                              |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|(Loss) income before income taxes and discontinued operations                                            |  |                   |   |  | 483                 |  |                   |  | 813                |  |                   |  | 377                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Income tax benefit                                                                                       |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|(Loss) income from continuing operations                                                                 |  |                   |   |  | 483                 |  |                   |  | 813                |  |                   |  | 377                |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|Discontinued operations:                                                                                 |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|(Loss) income from discontinued operations before income tax                                             |  | (9,171             | ) |  |                    |  | 593                |  |                   |  | 8,205              |  |                   |  | (1,275              | ) |  | (17,784            | ) |  | (11,178             | ) |  | (1,245             | )
|Income tax benefit                                                                                       |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                    |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|(Loss) income from discontinued operations                                                               |  | (9,171             | ) |  |                    |  | 593                |  |                   |  | 8,205              |  |                   |  | (1,275              | ) |  | (17,784            | ) |  | (11,178             | ) |  | (1,245             | )
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  
|Net income (loss)                                                                                        |  | (9,171             | ) |  | 483                 |  | 593                |  | 813                |  | 8,205              |  | 377                |  | (1,275              | ) |  | (17,784            | ) |  | (11,178             | ) |  | (1,245             | )
|                                                                                                         |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                     |   |  |                    |   |  |                     |   |  |                    |  



30



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|-------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ |  | -----------------------------
|                                                                                                         |  | MeriStarSub 5G,L.P. |  | MeriStarSub 5P,LLC |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC
|Revenue:                                                                                                 |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Hotel operations:                                                                                        |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Rooms                                                                                                    |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Food and beverage                                                                                        |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Other hotel operations                                                                                   |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Office rental, parking and other revenue                                                                 |  | 48                  |  | 38                 |  | 9                  |   |  |                   |  | 116                |   |  |                   |   |  | 225                |  |                   |  |                   |  |                             
|Participating lease revenue                                                                              |  | 9,844               |  | 1,106              |  | 8,662              |   |  | 1,820              |  | 5,729              |   |  |                   |   |  | 3,010              |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Total revenue                                                                                            |  | 9,892               |  | 1,144              |  | 8,671              |   |  | 1,820              |  | 5,845              |   |  |                   |   |  | 3,235              |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Hotel operating expenses:                                                                                |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Rooms                                                                                                    |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Food and beverage                                                                                        |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Other hotel operating expenses                                                                           |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Office rental, parking and other expenses                                                                |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  | 503                |  |                   |  |                   |  |                             
|Other operating expenses:                                                                                |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|General and administrative, hotel                                                                        |  |                    |  |                   |  |                   |   |  |                   |  | 1                  |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|General and administrative, corporate                                                                    |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Property operating costs                                                                                 |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Depreciation and amortization                                                                            |  | 6,290               |  | 5                  |  | 3,483              |   |  | 560                |  | 1,291              |   |  |                   |   |  | 1,270              |  |                   |  |                   |  |                             
|Property taxes, insurance and other                                                                      |  | 1,911               |  | 7                  |  | 1,466              |   |  | 215                |  | 707                |   |  |                   |   |  | 310                |  |                   |  |                   |  |                             
|Loss on asset impairments                                                                                |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Operating expenses                                                                                       |  | 8,201               |  | 12                 |  | 4,949              |   |  | 775                |  | 1,999              |   |  |                   |   |  | 2,083              |  |                   |  |                   |  |                             
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Operating income (loss)                                                                                  |  | 1,691               |  | 1,132              |  | 3,722              |   |  | 1,045              |  | 3,846              |   |  |                   |   |  | 1,152              |  |                   |  |                   |  |                             
|Minority interest                                                                                        |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Interest expense, net                                                                                    |  |                    |  |                   |  | (3                 | ) |  |                   |  | (2,833             | ) |  |                   |   |  |                   |  |                   |  |                   |  |                             
|(Loss) gain on early extinguishments of debt                                                             |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|Equity in income from consolidated entities                                                              |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|(Loss) income before income taxes and discontinued operations                                            |  | 1,691               |  | 1,132              |  | 3,719              |   |  | 1,045              |  | 1,013              |   |  |                   |   |  | 1,152              |  |                   |  |                   |  |                             
|Income tax benefit                                                                                       |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|(Loss) income from continuing operations                                                                 |  | 1,691               |  | 1,132              |  | 3,719              |   |  | 1,045              |  | 1,013              |   |  |                   |   |  | 1,152              |  |                   |  |                   |  |                             
|Discontinued operations:                                                                                 |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|(Loss) income from discontinued operations before income tax                                             |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  | (15,069            | ) |  |                   |  |                   |  |                   |  |                             
|Income tax benefit                                                                                       |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|(Loss) income from discontinued operations                                                               |  |                    |  |                   |  |                   |   |  |                   |  |                   |   |  | (15,069            | ) |  |                   |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              
|Net income (loss)                                                                                        |  | 1,691               |  | 1,132              |  | 3,719              |   |  | 1,045              |  | 1,013              |   |  | (15,069            | ) |  | 1,152              |  |                   |  |                   |  |                             
|                                                                                                         |  |                     |  |                    |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |  |                              



31



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2003

(Dollars in thousands)



|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------------ | - |  | -------------------------- | - |  | ------------ | - |  | ----------------- | -------- | -
|                                                                                                         |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotelLessee,Inc. |   |  | GuarantorSubsidiariesTotal |   |  | Eliminations |   |  | TotalConsolidated |         
|Revenue:                                                                                                 |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Hotel operations:                                                                                        |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Rooms                                                                                                    |  |                               |  |                   |  |                   |  | 488,883                  |   |  | 488,883                    |   |  |             |   |  | $                 | 488,883  |  
|Food and beverage                                                                                        |  |                               |  |                   |  |                   |  | 200,795                  |   |  | 200,795                    |   |  |             |   |  |                   | 200,795  |  
|Other hotel operations                                                                                   |  |                               |  |                   |  |                   |  | 61,657                   |   |  | 61,657                     |   |  |             |   |  |                   | 61,657   |  
|Office rental, parking and other revenue                                                                 |  |                               |  |                   |  |                   |  | (555                     | ) |  | 2,724                      |   |  |             |   |  |                   | 6,276    |  
|Participating lease revenue                                                                              |  |                               |  |                   |  |                   |  | 554                      |   |  | 94,957                     |   |  | (225,095     | ) |  |                   |         |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Total revenue                                                                                            |  |                               |  |                   |  |                   |  | 751,334                  |   |  | 849,016                    |   |  | (225,095     | ) |  |                   | 757,611  |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Hotel operating expenses:                                                                                |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Rooms                                                                                                    |  |                               |  |                   |  |                   |  | 123,479                  |   |  | 123,479                    |   |  |             |   |  |                   | 123,479  |  
|Food and beverage                                                                                        |  |                               |  |                   |  |                   |  | 145,691                  |   |  | 145,691                    |   |  |             |   |  |                   | 145,691  |  
|Other hotel operating expenses                                                                           |  |                               |  |                   |  |                   |  | 36,429                   |   |  | 36,429                     |   |  |             |   |  |                   | 36,429   |  
|Office rental, parking and other expenses                                                                |  |                               |  |                   |  |                   |  |                         |   |  | 1,651                      |   |  |             |   |  |                   | 2,798    |  
|Other operating expenses:                                                                                |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|General and administrative, hotel                                                                        |  |                               |  |                   |  |                   |  | 119,979                  |   |  | 119,991                    |   |  |             |   |  |                   | 120,002  |  
|General and administrative, corporate                                                                    |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | 11,913   |  
|Property operating costs                                                                                 |  |                               |  |                   |  |                   |  | 116,448                  |   |  | 116,448                    |   |  |             |   |  |                   | 113,995  |  
|Depreciation and amortization                                                                            |  |                               |  |                   |  |                   |  | 1,069                    |   |  | 37,300                     |   |  |             |   |  |                   | 93,506   |  
|Property taxes, insurance and other                                                                      |  |                               |  |                   |  |                   |  | 233,877                  |   |  | 251,021                    |   |  | (225,095     | ) |  |                   | 61,237   |  
|Loss on asset impairments                                                                                |  |                               |  |                   |  |                   |  |                         |   |  | 11,768                     |   |  |             |   |  |                   | 27,334   |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Operating expenses                                                                                       |  |                               |  |                   |  |                   |  | 776,972                  |   |  | 843,778                    |   |  | (225,095     | ) |  |                   | 736,384  |  
|Equity in income of and interest earned from unconsolidated affiliates, net of impairment charge in 2003 |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | (17,631  | )
|Operating income (loss)                                                                                  |  |                               |  |                   |  |                   |  | (25,638                  | ) |  | 5,238                      |   |  |             |   |  |                   | 3,596    |  
|Minority interest                                                                                        |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | 62       |  
|Interest expense, net                                                                                    |  |                               |  |                   |  |                   |  | (2,930                   | ) |  | (6,932                     | ) |  |             |   |  |                   | (140,623 | )
|(Loss) gain on early extinguishments of debt                                                             |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | 4,085    |  
|Equity in income from consolidated entities                                                              |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  | 270,566      |   |  |                   |         |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income before income taxes and discontinued operations                                            |  |                               |  |                   |  |                   |  | (28,568                  | ) |  | (1,694                     | ) |  | 270,566      |   |  |                   | (132,880 | )
|Income tax benefit                                                                                       |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | 3,689    |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income from continuing operations                                                                 |  |                               |  |                   |  |                   |  | (28,568                  | ) |  | (1,694                     | ) |  | 270,566      |   |  |                   | (129,191 | )
|Discontinued operations:                                                                                 |  |                                |  |                    |  |                    |  |                          |   |  |                           |   |  |              |   |  |                   |          |  
|(Loss) income from discontinued operations before income tax                                             |  |                               |  |                   |  |                   |  | (26,981                  | ) |  | (180,039                   | ) |  |             |   |  |                   | (275,313 | )
|Income tax benefit                                                                                       |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |             |   |  |                   | 67       |  
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income from discontinued operations                                                               |  |                               |  |                   |  |                   |  | (26,981                  | ) |  | (180,039                   | ) |  |             |   |  |                   | (275,246 | )
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  
|Net income (loss)                                                                                        |  |                               |  |                   |  |                   |  | (55,549                  | ) |  | (181,733                   | ) |  | 270,566      |   |  | $                 | (404,437 | )
|                                                                                                         |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |              |   |  |                   |          |  



32



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|---------------------------------------------------------------------- |  | --------------------------- | -------- | - | ------------------------- | ------- | - | ------------------ | - | ------------ | - | ------------------ | --- | ------------------ | ------ | - | ------------------- | ----- | ------------------ | - | ------------------- | ----- | ------------------ | -----
|                                                                       |  | MeriStarHospitality OP,L.P. |          |   | Non-GuarantorSubsidiaries |         |   | MeriStarSub 7C,LLC |   | AGHUpreitLLC |   | MeriStarSub 5N,LLC |     | MeriStarSub 8A,LLC |        |   | MeriStarSub 8F,L.P. |       | MeriStarSub 8G,LLC |   | MeriStarSub 6H,L.P. |       | MeriStarSub 8B,LLC
|Revenue:                                                               |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Hotel operations:                                                      |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Rooms                                                                  |  | $                           |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Food and beverage                                                      |  |                             |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Other hotel operations                                                 |  |                             |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Office rental, parking and other revenue                               |  |                             | (1       | ) |                           | 7,069   |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Participating lease revenue                                            |  |                             |         |   |                           | 124,061 |   |                    |  |              |  |                    | 877 |                    |       |   |                     | 2,282 |                    |  |                     | 1,472 |                    | 7,078
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Total revenue                                                          |  |                             | (1       | ) |                           | 131,130 |   |                    |  |              |  |                    | 877 |                    |       |   |                     | 2,282 |                    |  |                     | 1,472 |                    | 7,078
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Hotel operating expenses:                                              |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Rooms                                                                  |  |                             |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Food and beverage                                                      |  |                             |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Other hotel operating expenses                                         |  |                             |         |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Office rental, parking and other expenses                              |  |                             |         |   |                           | 1,895   |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Other operating expenses:                                              |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|General and administrative, hotel                                      |  |                             |         |   |                           | 6       |   |                    |  |              |  |                    |    |                    |       |   |                     | 1     |                    |  |                     | 1     |                    | 1    
|General and administrative, corporate                                  |  |                             | 7,643    |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Property operating costs                                               |  |                             | 3,282    |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Depreciation and amortization                                          |  |                             | 13,433   |   |                           | 42,461  |   |                    |  |              |  |                    | 133 |                    |       |   |                     | 453   |                    |  |                     | 431   |                    | 2,385
|Property taxes, insurance and other                                    |  |                             | (6,039   | ) |                           | 28,578  |   |                    |  |              |  |                    | 104 |                    |       |   |                     | 733   |                    |  |                     | 101   |                    | 1,414
|Write down of note receivable with Interstate Hotels & Resorts         |  |                             | 14,517   |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Operating expenses                                                     |  |                             | 32,836   |   |                           | 72,940  |   |                    |  |              |  |                    | 237 |                    |       |   |                     | 1,187 |                    |  |                     | 533   |                    | 3,800
|Equity in income of and interest earned from unconsolidated affiliates |  |                             | 7,608    |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Operating income (loss)                                                |  |                             | (25,229  | ) |                           | 58,190  |   |                    |  |              |  |                    | 640 |                    |       |   |                     | 1,095 |                    |  |                     | 939   |                    | 3,278
|Minority interest                                                      |  |                             | 15       |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Interest expense, net                                                  |  |                             | (107,089 | ) |                           | (25,777 | ) |                    |  |              |  |                    | 6   |                    |       |   |                     | 11    |                    |  |                     | 3     |                    | 78   
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                             | (4,446   | ) |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Loss on fair value of non-hedging derivatives                          |  |                             | (4,735   | ) |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|Equity in income from consolidated entities                            |  |                             | (33,753  | ) |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income before income taxes and discontinued operations          |  |                             | (175,237 | ) |                           | 32,413  |   |                    |  |              |  |                    | 646 |                    |       |   |                     | 1,106 |                    |  |                     | 942   |                    | 3,356
|Income tax benefit                                                     |  |                             | 1,331    |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from continuing operations                               |  |                             | (173,906 | ) |                           | 32,413  |   |                    |  |              |  |                    | 646 |                    |       |   |                     | 1,106 |                    |  |                     | 942   |                    | 3,356
|Discontinued operations:                                               |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from discontinued operations before income tax           |  |                             | 3,147    |   |                           | (35,256 | ) |                    |  |              |  |                    |    |                    | (4,107 | ) |                     |      |                    |  |                     |      |                    |     
|Income tax benefit                                                     |  |                             | 590      |   |                           |        |   |                    |  |              |  |                    |    |                    |       |   |                     |      |                    |  |                     |      |                    |     
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|(Loss) income from discontinued operations                             |  |                             | 3,737    |   |                           | (35,256 | ) |                    |  |              |  |                    |    |                    | (4,107 | ) |                     |      |                    |  |                     |      |                    |     
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      
|Net income (loss)                                                      |  | $                           | (170,169 | ) |                           | (2,843  | ) |                    |  |              |  |                    | 646 |                    | (4,107 | ) |                     | 1,106 |                    |  |                     | 942   |                    | 3,356
|                                                                       |  |                             |          |   |                           |         |   |                    |   |              |   |                    |     |                    |        |   |                     |       |                    |   |                     |       |                    |      



33



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|---------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | --------------------- |  | ------------------ |  | ------------------ |  | -------------------
|                                                                       |  | MeriStarSub 1C,LLC |   |  | MeriStarSub 8E,LLC |  | MeriStarSub 7F,LLC |  | MeriStarSub 5L,LLC |  | MeriStarSub 3C,LLC |  | MeriStarSub 5R,LLC |  | OldMeriStarSub 8A,LLC |  | MeriStarSub 6D,LLC |  | MeriStarSub 6E,LLC |  | MeriStarSub 4E,L.P.
|Revenue:                                                               |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Hotel operations:                                                      |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Rooms                                                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Food and beverage                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Other hotel operations                                                 |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Office rental, parking and other revenue                               |  |                   |   |  | 27                 |  |                   |  |                   |  |                   |  |                   |  |                      |  | 18                 |  |                   |  |                   
|Participating lease revenue                                            |  | 1,245              |   |  | 1,605              |  | 1,069              |  | 991                |  | 1,704              |  |                   |  |                      |  | 2,031              |  | 5,545              |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Total revenue                                                          |  | 1,245              |   |  | 1,632              |  | 1,069              |  | 991                |  | 1,704              |  |                   |  |                      |  | 2,049              |  | 5,545              |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Hotel operating expenses:                                              |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Rooms                                                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Food and beverage                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Other hotel operating expenses                                         |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Office rental, parking and other expenses                              |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Other operating expenses:                                              |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|General and administrative, hotel                                      |  | 7                  |   |  | 1                  |  | 1                  |  | 1                  |  | 1                  |  |                   |  |                      |  | 1                  |  | 16                 |  |                   
|General and administrative, corporate                                  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Property operating costs                                               |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Depreciation and amortization                                          |  | 1,021              |   |  | 600                |  | 463                |  | 135                |  | 706                |  |                   |  |                      |  | 526                |  | 1,692              |  |                   
|Property taxes, insurance and other                                    |  | 716                |   |  | 187                |  | 143                |  | 132                |  | 458                |  |                   |  |                      |  | 203                |  | 762                |  |                   
|Write down of note receivable with Interstate Hotels & Resorts         |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Operating expenses                                                     |  | 1,744              |   |  | 788                |  | 607                |  | 268                |  | 1,165              |  |                   |  |                      |  | 730                |  | 2,470              |  |                   
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Operating income (loss)                                                |  | (499               | ) |  | 844                |  | 462                |  | 723                |  | 539                |  |                   |  |                      |  | 1,319              |  | 3,075              |  |                   
|Minority interest                                                      |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Interest expense, net                                                  |  | 41                 |   |  | 7                  |  | 8                  |  | 10                 |  | 18                 |  |                   |  |                      |  | 21                 |  | 66                 |  |                   
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Loss on fair value of non-hedging derivatives                          |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|Equity in income from consolidated entities                            |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|(Loss) income before income taxes and discontinued operations          |  | (458               | ) |  | 851                |  | 470                |  | 733                |  | 557                |  |                   |  |                      |  | 1,340              |  | 3,141              |  |                   
|Income tax benefit                                                     |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|(Loss) income from continuing operations                               |  | (458               | ) |  | 851                |  | 470                |  | 733                |  | 557                |  |                   |  |                      |  | 1,340              |  | 3,141              |  |                   
|Discontinued operations:                                               |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|(Loss) income from discontinued operations before income tax           |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  | 83                 
|Income tax benefit                                                     |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  |                   
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|(Loss) income from discontinued operations                             |  |                   |   |  |                   |  |                   |  |                   |  |                   |  |                   |  |                      |  |                   |  |                   |  | 83                 
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    
|Net income (loss)                                                      |  | (458               | ) |  | 851                |  | 470                |  | 733                |  | 557                |  |                   |  |                      |  | 1,340              |  | 3,141              |  | 83                 
|                                                                       |  |                    |   |  |                    |  |                    |  |                    |  |                    |  |                    |  |                       |  |                    |  |                    |  |                    



34



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|---------------------------------------------------------------------- |  | ------------------ |  | ------------------- |  | ------------------ |  | ------------------ | - |  | ------------------- | - |  | ------------------- | - |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------
|                                                                       |  | MeriStarSub 1B,LLC |  | MeriStarSub 5F,L.P. |  | MeriStarSub 6G,LLC |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P. |   |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |  | MeriStarSub 3D,LLC |  | MeriStarSub 1A,LLC |  | MeriStarSub 5E,LLC
|Revenue:                                                               |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Hotel operations:                                                      |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Other hotel operations                                                 |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Office rental, parking and other revenue                               |  | 572                |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  | 1                  |  |                   |  |                   |  |                  
|Participating lease revenue                                            |  | 2,312              |  | 2,627               |  | 2,459              |  |                   |   |  |                    |   |  |                    |   |  | 1,346              |  | 2,159              |  | 1,767              |  | 5,540             
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Total revenue                                                          |  | 2,884              |  | 2,627               |  | 2,459              |  |                   |   |  |                    |   |  |                    |   |  | 1,347              |  | 2,159              |  | 1,767              |  | 5,540             
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Hotel operating expenses:                                              |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Other hotel operating expenses                                         |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Office rental, parking and other expenses                              |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Other operating expenses:                                              |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|General and administrative, hotel                                      |  | 1                  |  | 1                   |  | 1                  |  |                   |   |  |                    |   |  |                    |   |  | 1                  |  | 1                  |  | 1                  |  | 1                 
|General and administrative, corporate                                  |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Property operating costs                                               |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Depreciation and amortization                                          |  | 602                |  | 1,058               |  | 837                |  |                   |   |  |                    |   |  |                    |   |  | 634                |  | 849                |  | 453                |  | 1,943             
|Property taxes, insurance and other                                    |  | 89                 |  | 373                 |  | 335                |  |                   |   |  |                    |   |  |                    |   |  | 161                |  | 225                |  | 392                |  | 392               
|Write down of note receivable with Interstate Hotels & Resorts         |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Operating expenses                                                     |  | 692                |  | 1,432               |  | 1,173              |  |                   |   |  |                    |   |  |                    |   |  | 796                |  | 1,075              |  | 846                |  | 2,336             
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Operating income (loss)                                                |  | 2,192              |  | 1,195               |  | 1,286              |  |                   |   |  |                    |   |  |                    |   |  | 551                |  | 1,084              |  | 921                |  | 3,204             
|Minority interest                                                      |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Interest expense, net                                                  |  | 21                 |  | 40                  |  | 41                 |  |                   |   |  |                    |   |  |                    |   |  | 17                 |  | 39                 |  | 17                 |  | 28                
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Loss on fair value of non-hedging derivatives                          |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|Equity in income from consolidated entities                            |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|(Loss) income before income taxes and discontinued operations          |  | 2,213              |  | 1,235               |  | 1,327              |  |                   |   |  |                    |   |  |                    |   |  | 568                |  | 1,123              |  | 938                |  | 3,232             
|Income tax benefit                                                     |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|(Loss) income from continuing operations                               |  | 2,213              |  | 1,235               |  | 1,327              |  |                   |   |  |                    |   |  |                    |   |  | 568                |  | 1,123              |  | 938                |  | 3,232             
|Discontinued operations:                                               |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|(Loss) income from discontinued operations before income tax           |  |                   |  |                    |  |                   |  | (20,129            | ) |  | (1,407              | ) |  | (145                | ) |  |                   |  |                   |  |                   |  |                  
|Income tax benefit                                                     |  |                   |  |                    |  |                   |  |                   |   |  |                    |   |  |                    |   |  |                   |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|(Loss) income from discontinued operations                             |  |                   |  |                    |  |                   |  | (20,129            | ) |  | (1,407              | ) |  | (145                | ) |  |                   |  |                   |  |                   |  |                  
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   
|Net income (loss)                                                      |  | 2,213              |  | 1,235               |  | 1,327              |  | (20,129            | ) |  | (1,407              | ) |  | (145                | ) |  | 568                |  | 1,123              |  | 938                |  | 3,232             
|                                                                       |  |                    |  |                     |  |                    |  |                    |   |  |                     |   |  |                     |   |  |                    |  |                    |  |                    |  |                   



35



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|---------------------------------------------------------------------- |  | -------------------------- |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | --------------------- |  | ------------------
|                                                                       |  | MeriStarSub 7AJointVenture |  | MeriStarSub 6K,LLC |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |  | MeriStarSub 4A,L.P. |   |  | MeriStarSub 4D,LLC |   |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |  | MDVLimitedPartnership |  | MeriStarSub 5C,LLC
|Revenue:                                                               |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Hotel operations:                                                      |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Rooms                                                                  |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Food and beverage                                                      |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Other hotel operations                                                 |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Office rental, parking and other revenue                               |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Participating lease revenue                                            |  |                           |  | 3,975              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 503                   |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Total revenue                                                          |  |                           |  | 3,975              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 503                   |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Hotel operating expenses:                                              |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Rooms                                                                  |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Food and beverage                                                      |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Other hotel operating expenses                                         |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Office rental, parking and other expenses                              |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Other operating expenses:                                              |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|General and administrative, hotel                                      |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|General and administrative, corporate                                  |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Property operating costs                                               |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Depreciation and amortization                                          |  |                           |  | 736                |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 137                   |  |                  
|Property taxes, insurance and other                                    |  |                           |  | 453                |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 122                   |  |                  
|Write down of note receivable with Interstate Hotels & Resorts         |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Operating expenses                                                     |  |                           |  | 1,189              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 259                   |  |                  
|Equity in income of and interest earned from unconsolidated affiliates |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Operating income (loss)                                                |  |                           |  | 2,786              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 244                   |  |                  
|Minority interest                                                      |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Interest expense, net                                                  |  |                           |  | 33                 |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 2                     |  |                  
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Loss on fair value of non-hedging derivatives                          |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|Equity in income from consolidated entities                            |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|(Loss) income before income taxes and discontinued operations          |  |                           |  | 2,819              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 246                   |  |                  
|Income tax benefit                                                     |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|(Loss) income from continuing operations                               |  |                           |  | 2,819              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  | 246                   |  |                  
|Discontinued operations:                                               |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|(Loss) income from discontinued operations before income tax           |  | 638                        |  |                   |  | (464               | ) |  | 195                |  | (2,398              | ) |  | (3,591             | ) |  | (605               | ) |  | 658                |  |                      |  | 267               
|Income tax benefit                                                     |  |                           |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |   |  |                   |  |                      |  |                  
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|(Loss) income from discontinued operations                             |  | 638                        |  |                   |  | (464               | ) |  | 195                |  | (2,398              | ) |  | (3,591             | ) |  | (605               | ) |  | 658                |  |                      |  | 267               
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   
|Net income (loss)                                                      |  | 638                        |  | 2,819              |  | (464               | ) |  | 195                |  | (2,398              | ) |  | (3,591             | ) |  | (605               | ) |  | 658                |  | 246                   |  | 267               
|                                                                       |  |                            |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |   |  |                    |  |                       |  |                   



36



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|---------------------------------------------------------------------- |  | ------------------ |  | ------------------ |  | ------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------- | - |  | ------------------ | - |  | ------------------ |  | ------------------
|                                                                       |  | MeriStarSub 6J,LLC |  | MeriStarSub 1D,LLC |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |  | MeriStarSub 7G,LLC |   |  | MeriStarSub 6B,LLC |  | MeriStarSub 4I,L.P. |   |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |  | MeriStarSub 7H,LLC
|Revenue:                                                               |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Hotel operations:                                                      |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Other hotel operations                                                 |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Office rental, parking and other revenue                               |  |                   |  | 435                |  |                    |   |  | 1,484              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Participating lease revenue                                            |  | 2,387              |  | 5,104              |  |                    |   |  | 5,660              |  |                   |   |  | 1,192              |  |                    |   |  | 1,889              |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Total revenue                                                          |  | 2,387              |  | 5,539              |  |                    |   |  | 7,144              |  |                   |   |  | 1,192              |  |                    |   |  | 1,889              |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Hotel operating expenses:                                              |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Rooms                                                                  |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Other hotel operating expenses                                         |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Office rental, parking and other expenses                              |  |                   |  | 129                |  |                    |   |  | 1,162              |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Other operating expenses:                                              |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|General and administrative, hotel                                      |  | 1                  |  |                   |  |                    |   |  |                   |  |                   |   |  | 1                  |  |                    |   |  | 1                  |   |  |                   |  |                  
|General and administrative, corporate                                  |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Property operating costs                                               |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Depreciation and amortization                                          |  | 647                |  | 2,286              |  |                    |   |  | 1,660              |  |                   |   |  | 456                |  |                    |   |  | 1,450              |   |  |                   |  |                  
|Property taxes, insurance and other                                    |  | 209                |  | 1,287              |  |                    |   |  | 2,154              |  |                   |   |  | 226                |  |                    |   |  | 216                |   |  |                   |  |                  
|Write down of note receivable with Interstate Hotels & Resorts         |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Operating expenses                                                     |  | 857                |  | 3,702              |  |                    |   |  | 4,976              |  |                   |   |  | 683                |  |                    |   |  | 1,667              |   |  |                   |  |                  
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Operating income (loss)                                                |  | 1,530              |  | 1,837              |  |                    |   |  | 2,168              |  |                   |   |  | 509                |  |                    |   |  | 222                |   |  |                   |  |                  
|Minority interest                                                      |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Interest expense, net                                                  |  | 34                 |  | 38                 |  |                    |   |  | 40                 |  |                   |   |  | 8                  |  |                    |   |  | (1,479             | ) |  |                   |  |                  
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Loss on fair value of non-hedging derivatives                          |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|Equity in income from consolidated entities                            |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|(Loss) income before income taxes and discontinued operations          |  | 1,564              |  | 1,875              |  |                    |   |  | 2,208              |  |                   |   |  | 517                |  |                    |   |  | (1,257             | ) |  |                   |  |                  
|Income tax benefit                                                     |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|(Loss) income from continuing operations                               |  | 1,564              |  | 1,875              |  |                    |   |  | 2,208              |  |                   |   |  | 517                |  |                    |   |  | (1,257             | ) |  |                   |  |                  
|Discontinued operations:                                               |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|(Loss) income from discontinued operations before income tax           |  |                   |  |                   |  | (6,877              | ) |  |                   |  | (393               | ) |  |                   |  | (5,445              | ) |  |                   |   |  | 615                |  | 484               
|Income tax benefit                                                     |  |                   |  |                   |  |                    |   |  |                   |  |                   |   |  |                   |  |                    |   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|(Loss) income from discontinued operations                             |  |                   |  |                   |  | (6,877              | ) |  |                   |  | (393               | ) |  |                   |  | (5,445              | ) |  |                   |   |  | 615                |  | 484               
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   
|Net income (loss)                                                      |  | 1,564              |  | 1,875              |  | (6,877              | ) |  | 2,208              |  | (393               | ) |  | 517                |  | (5,445              | ) |  | (1,257             | ) |  | 615                |  | 484               
|                                                                       |  |                    |  |                    |  |                     |   |  |                    |  |                    |   |  |                    |  |                     |   |  |                    |   |  |                    |  |                   



37



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|---------------------------------------------------------------------- |  | -------------- |  | ------------------ | - |  | ------------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | --------------------- |  | ------------------- | - |  | ------------------
|                                                                       |  | AGH PSS I,Inc. |  | MeriStarSub 2D,LLC |   |  | MeriStarSub 4F,L.P. |  | MeriStarSub 5K,LLC |  | MeriStarSub 5M,LLC |  | MeriStarSub 1E,LLC |  | MeriStarSub 5O,LLC |  | MeriStarSub 6MCompany |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 6C,LLC
|Revenue:                                                               |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Hotel operations:                                                      |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Rooms                                                                  |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Food and beverage                                                      |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Other hotel operations                                                 |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Office rental, parking and other revenue                               |  |               |  |                   |   |  | 12                  |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  | 16                
|Participating lease revenue                                            |  |               |  |                   |   |  | 1,868               |  |                   |  | 1,604              |  |                   |  | 724                |  | 4,279                 |  |                    |   |  | 2,946             
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Total revenue                                                          |  |               |  |                   |   |  | 1,880               |  |                   |  | 1,604              |  |                   |  | 724                |  | 4,279                 |  |                    |   |  | 2,962             
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Hotel operating expenses:                                              |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Rooms                                                                  |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Food and beverage                                                      |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Other hotel operating expenses                                         |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Office rental, parking and other expenses                              |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Other operating expenses:                                              |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|General and administrative, hotel                                      |  |               |  |                   |   |  |                    |  |                   |  | 1                  |  |                   |  | 1                  |  | 1                     |  |                    |   |  | 1                 
|General and administrative, corporate                                  |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Property operating costs                                               |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Depreciation and amortization                                          |  |               |  |                   |   |  | 1,122               |  |                   |  | 454                |  |                   |  | 219                |  | 1,211                 |  |                    |   |  | 777               
|Property taxes, insurance and other                                    |  |               |  |                   |   |  | 383                 |  |                   |  | 287                |  |                   |  | 119                |  | 294                   |  |                    |   |  | 209               
|Write down of note receivable with Interstate Hotels & Resorts         |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Operating expenses                                                     |  |               |  |                   |   |  | 1,505               |  |                   |  | 742                |  |                   |  | 339                |  | 1,506                 |  |                    |   |  | 987               
|Equity in income of and interest earned from unconsolidated affiliates |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Operating income (loss)                                                |  |               |  |                   |   |  | 375                 |  |                   |  | 862                |  |                   |  | 385                |  | 2,773                 |  |                    |   |  | 1,975             
|Minority interest                                                      |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Interest expense, net                                                  |  |               |  |                   |   |  | 37                  |  |                   |  | 19                 |  |                   |  | 7                  |  | 21                    |  |                    |   |  | 36                
|Change in fair value of non-hedging derivatives, net of swap payments  |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Loss on fair value of non-hedging derivatives                          |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|Equity in income from consolidated entities                            |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|(Loss) income before income taxes and discontinued operations          |  |               |  |                   |   |  | 412                 |  |                   |  | 881                |  |                   |  | 392                |  | 2,794                 |  |                    |   |  | 2,011             
|Income tax benefit                                                     |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|(Loss) income from continuing operations                               |  |               |  |                   |   |  | 412                 |  |                   |  | 881                |  |                   |  | 392                |  | 2,794                 |  |                    |   |  | 2,011             
|Discontinued operations:                                               |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|(Loss) income from discontinued operations before income tax           |  | 1,639          |  | (224               | ) |  |                    |  | 970                |  |                   |  | 1,216              |  |                   |  |                      |  | (4,245              | ) |  |                  
|Income tax benefit                                                     |  |               |  |                   |   |  |                    |  |                   |  |                   |  |                   |  |                   |  |                      |  |                    |   |  |                  
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|(Loss) income from discontinued operations                             |  | 1,639          |  | (224               | ) |  |                    |  | 970                |  |                   |  | 1,216              |  |                   |  |                      |  | (4,245              | ) |  |                  
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   
|Net income (loss)                                                      |  | 1,639          |  | (224               | ) |  | 412                 |  | 970                |  | 881                |  | 1,216              |  | 392                |  | 2,794                 |  | (4,245              | ) |  | 2,011             
|                                                                       |  |                |  |                    |   |  |                     |  |                    |  |                    |  |                    |  |                    |  |                       |  |                     |   |  |                   



38



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|---------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- |  | ------------------ | - |  | ------------------- |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ | - |  | ------------------ |  | ------------------
|                                                                       |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |  | MeriStarSub 3B,LLC |   |  | MeriStarSub 5G,L.P. |  | MeriStarSub 5P,LLC |   |  | MeriStarSub 5J,LLC |  | MeriStarSub 5Q,LLC |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |  | MeriStarSub 4J,LLC
|Revenue:                                                               |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Hotel operations:                                                      |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Rooms                                                                  |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Other hotel operations                                                 |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Office rental, parking and other revenue                               |  |                   |   |  |                    |  |                   |   |  | 53                  |  |                   |   |  |                   |  |                   |  | 110                |   |  |                   |  | 10                
|Participating lease revenue                                            |  |                   |   |  |                    |  |                   |   |  | 10,316              |  | 581                |   |  | 8,641              |  | 1,838              |  | 5,709              |   |  |                   |  | 3,000             
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Total revenue                                                          |  |                   |   |  |                    |  |                   |   |  | 10,369              |  | 581                |   |  | 8,641              |  | 1,838              |  | 5,819              |   |  |                   |  | 3,010             
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Hotel operating expenses:                                              |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Rooms                                                                  |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Food and beverage                                                      |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Other hotel operating expenses                                         |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Office rental, parking and other expenses                              |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Other operating expenses:                                              |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|General and administrative, hotel                                      |  |                   |   |  |                    |  |                   |   |  | 2                   |  |                   |   |  | 1                  |  | 1                  |  | 1                  |   |  |                   |  | 5                 
|General and administrative, corporate                                  |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Property operating costs                                               |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Depreciation and amortization                                          |  |                   |   |  |                    |  |                   |   |  | 6,201               |  | 3                  |   |  | 3,475              |  | 494                |  | 1,434              |   |  |                   |  | 1,343             
|Property taxes, insurance and other                                    |  |                   |   |  |                    |  |                   |   |  | 1,861               |  | (11                | ) |  | 1,537              |  | 255                |  | 634                |   |  |                   |  | 274               
|Write down of note receivable with Interstate Hotels & Resorts         |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Operating expenses                                                     |  |                   |   |  |                    |  |                   |   |  | 8,064               |  | (8                 | ) |  | 5,013              |  | 750                |  | 2,069              |   |  |                   |  | 1,622             
|Equity in income of and interest earned from unconsolidated affiliates |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Operating income (loss)                                                |  |                   |   |  |                    |  |                   |   |  | 2,305               |  | 589                |   |  | 3,628              |  | 1,088              |  | 3,750              |   |  |                   |  | 1,388             
|Minority interest                                                      |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Interest expense, net                                                  |  |                   |   |  |                    |  |                   |   |  | 124                 |  |                   |   |  | 156                |  | 76                 |  | (2,780             | ) |  |                   |  | 56                
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Loss on fair value of non-hedging derivatives                          |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|Equity in income from consolidated entities                            |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|(Loss) income before income taxes and discontinued operations          |  |                   |   |  |                    |  |                   |   |  | 2,429               |  | 589                |   |  | 3,784              |  | 1,164              |  | 970                |   |  |                   |  | 1,444             
|Income tax benefit                                                     |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|(Loss) income from continuing operations                               |  |                   |   |  |                    |  |                   |   |  | 2,429               |  | 589                |   |  | 3,784              |  | 1,164              |  | 970                |   |  |                   |  | 1,444             
|Discontinued operations:                                               |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|(Loss) income from discontinued operations before income tax           |  | (1,248             | ) |  | 809                 |  | (12,777            | ) |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  | 651                |  |                  
|Income tax benefit                                                     |  |                   |   |  |                    |  |                   |   |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |  |                  
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|(Loss) income from discontinued operations                             |  | (1,248             | ) |  | 809                 |  | (12,777            | ) |  |                    |  |                   |   |  |                   |  |                   |  |                   |   |  | 651                |  |                  
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   
|Net income (loss)                                                      |  | (1,248             | ) |  | 809                 |  | (12,777            | ) |  | 2,429               |  | 589                |   |  | 3,784              |  | 1,164              |  | 970                |   |  | 651                |  | 1,444             
|                                                                       |  |                    |   |  |                     |  |                    |   |  |                     |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |  |                   



39



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Operations

Year Ended December 31, 2002

(Dollars in thousands)



|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|---------------------------------------------------------------------- |  | ------------------------------- |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------------------ |  | ------------------------- | - |  | -------------------------- | - |  | ------------ | - |  | ----------------- | -------- | -
|                                                                       |  | MeriStar AcquisitionCompany,LLC |  | MeriStarSub 6I,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarSub 5I,LLC |  | CapStar Cherry HillCompany,LLC |  | MeriStarHotel Lessee,Inc. |   |  | GuarantorSubsidiariesTotal |   |  | Eliminations |   |  | TotalConsolidated |         
|Revenue:                                                               |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Hotel operations:                                                      |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Rooms                                                                  |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 503,951                   |   |  | 503,951                    |   |  |             |   |  | $                 | 503,951  |  
|Food and beverage                                                      |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 199,148                   |   |  | 199,148                    |   |  |             |   |  |                   | 199,148  |  
|Other hotel operations                                                 |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 61,093                    |   |  | 61,093                     |   |  |             |   |  |                   | 61,093   |  
|Office rental, parking and other revenue                               |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (1,506                    | ) |  | 1,232                      |   |  |             |   |  |                   | 8,300    |  
|Participating lease revenue                                            |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  | 106,325                    |   |  | (230,386     | ) |  |                   |         |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Total revenue                                                          |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 762,686                   |   |  | 871,749                    |   |  | (230,386     | ) |  |                   | 772,492  |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Hotel operating expenses:                                              |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Rooms                                                                  |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 120,668                   |   |  | 120,668                    |   |  |             |   |  |                   | 120,668  |  
|Food and beverage                                                      |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 141,120                   |   |  | 141,120                    |   |  |             |   |  |                   | 141,120  |  
|Other hotel operating expenses                                         |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 33,297                    |   |  | 33,297                     |   |  |             |   |  |                   | 33,297   |  
|Office rental, parking and other expenses                              |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  | 1,291                      |   |  |             |   |  |                   | 3,186    |  
|Other operating expenses:                                              |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|General and administrative, hotel                                      |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 120,771                   |   |  | 120,826                    |   |  |             |   |  |                   | 120,832  |  
|General and administrative, corporate                                  |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (1,156                    | ) |  | (1,156                     | ) |  |             |   |  |                   | 6,487    |  
|Property operating costs                                               |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 109,103                   |   |  | 109,103                    |   |  |             |   |  |                   | 112,385  |  
|Depreciation and amortization                                          |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 1,578                     |   |  | 40,604                     |   |  |             |   |  |                   | 96,498   |  
|Property taxes, insurance and other                                    |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 243,613                   |   |  | 261,042                    |   |  | (230,386     | ) |  |                   | 53,195   |  
|Write down of note receivable with Interstate Hotels & Resorts         |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | 14,517   |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Operating expenses                                                     |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | 768,994                   |   |  | 826,795                    |   |  | (230,386     | ) |  |                   | 702,185  |  
|Equity in income of and interest earned from unconsolidated affiliates |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | 7,608    |  
|Operating income (loss)                                                |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (6,308                    | ) |  | 44,954                     |   |  |             |   |  |                   | 77,915   |  
|Minority interest                                                      |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | 15       |  
|Interest expense, net                                                  |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (159                      | ) |  | (3,259                     | ) |  |             |   |  |                   | (136,125 | )
|Change in fair value of non-hedging derivatives, net of swap payments  |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | (4,446   | )
|Loss on fair value of non-hedging derivatives                          |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | (4,735   | )
|Equity in income from consolidated entities                            |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  | 33,753       |   |  |                   |         |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income before income taxes and discontinued operations          |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (6,467                    | ) |  | 41,695                     |   |  | 33,753       |   |  |                   | (67,376  | )
|Income tax benefit                                                     |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | 1,331    |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income from continuing operations                               |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (6,467                    | ) |  | 41,695                     |   |  | 33,753       |   |  |                   | (66,045  | )
|Discontinued operations:                                               |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income from discontinued operations before income tax           |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (17,425                   | ) |  | (73,255                    | ) |  |             |   |  |                   | (105,364 | )
|Income tax benefit                                                     |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  |                          |   |  |                           |   |  |             |   |  |                   | 590      |  
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|(Loss) income from discontinued operations                             |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (17,425                   | ) |  | (73,255                    | ) |  |             |   |  |                   | (104,774 | )
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net income (loss)                                                      |  |                                |  |                   |  |                   |  |                   |  |                   |  |                               |  | (23,892                   | ) |  | (31,560                    | ) |  | 33,753       |   |  | $                 | (170,819 | )
|                                                                       |  |                                 |  |                    |  |                    |  |                    |  |                    |  |                                |  |                           |   |  |                            |   |  |              |   |  |                   |          |  



40



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)

|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|----------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | -------------------------- | -------- | - | ----------------------------- | ----- | - | ----------------------------- | ---- | - | ------------------ | - | ------------------ | - | ------------ | - | ------------------- | ------ | - | ------------------- | ------ | - | ------------------ | ------ | -
|                                                                                          |  | MeriStarHospitality OP,L.P. |          |   | Non- GuarantorSubsidiaries |          |   | MeriStarLexingtonMortgage,LLC |       |   | MeriStarLexingtonPartners,LLC |      |   | MeriStarSub 7C,LLC |   | MeriStarSub 8G,LLC |   | AGHUpreitLLC |   | MeriStarSub 6H,L.P. |        |   | MeriStarSub 8F,L.P. |        |   | MeriStarSub 8B,LLC |       
|Operating activities:                                                                     |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Net income (loss)                                                                         |  | $                           | (99,133  | ) |                            | 31,170   |   |                               | 1,439 |   |                               | 237  |   |                    |  |                    |  |              |  |                     | 561    |   |                     | 1,155  |   |                    | 6,133  |  
|Adjustments to reconcile net loss to net cash provided by (used in) operating
activities: |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Depreciation and amortization                                                             |  |                             | 7,964    |   |                            | 52,829   |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | 627    |   |                     | 658    |   |                    | 2,483  |  
|Loss on asset impairments                                                                 |  |                             |         |   |                            | 5,556    |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Loss on sale of assets, before tax effect                                                 |  |                             |         |   |                            | 3,099    |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Loss on early extinguishments of debt                                                     |  |                             | 7,967    |   |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Minority interests                                                                        |  |                             | (79      | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Equity in income of unconsolidated affiliates                                             |  |                             | 3,957    |   |                            |         |   |                               |      |   |                               | (237 | ) |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Cash distributions from equity method of investment                                       |  |                             |         |   |                            |         |   |                               |      |   |                               | 840  |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Amortization of unearned stock-based compensation                                         |  |                             | (2,939   | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Redemption of POPs                                                                        |  |                             | (4,602   | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Deferred income taxes                                                                     |  |                             | (730     | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Changes in operating assets and liabilities:                                              |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Accounts receivable                                                                       |  |                             | (21,593  | ) |                            | 1,078    |   |                               | (740  | ) |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Prepaid expenses and other assets                                                         |  |                             | (442     | ) |                            | 2,229    |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | 12     |   |                     | 53     |   |                    | 75     |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                             | (8,096   | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  |                             | (12,813  | ) |                            | (510     | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | (161   | ) |                     | (61    | ) |                    | (2,502 | )
|Due from/to subsidiaries                                                                  |  |                             | 150,751  |   |                            | (40,661  | ) |                               | (699  | ) |                               | (840 | ) |                    |  |                    |  |              |  |                     | (1,016 | ) |                     | 266    |   |                    | (461   | )
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Net cash provided by (used in) operating activities                                       |  |                             | 20,212   |   |                            | 54,790   |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | 23     |   |                     | 2,071  |   |                    | 5,728  |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Investing activities:                                                                     |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                             |         |   |                            | (91,251  | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Capital expenditures for property and equipment                                           |  |                             | (3,334   | ) |                            | (67,351  | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | (23    | ) |                     | (2,186 | ) |                    | (5,728 | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                             | (50,493  | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Proceeds from sales of assets                                                             |  |                             |         |   |                            | 51,675   |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|(Increase) decrease in restricted cash                                                    |  |                             | (15,822  | ) |                            | 1,130    |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     | 115    |   |                    |       |  
|Costs associated with disposition program and other, net                                  |  |                             | 85       |   |                            | (2,021   | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Net cash (used in) provided by investing activities                                       |  |                             | (69,564  | ) |                            | (107,818 | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     | (23    | ) |                     | (2,071 | ) |                    | (5,728 | )
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Financing activities:                                                                     |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Prepayments on long-term debt                                                             |  |                             | (85,318  | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Scheduled payments on long-term debt                                                      |  |                             | (11,234  | ) |                            | (1,811   | ) |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Proceeds from issuance of long-term debt                                                  |  |                             | (397     | ) |                            | 54,839   |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Loans to/from subsidiaries                                                                |  |                             | (93,067  | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Contributions from partners                                                               |  |                             | 72,296   |   |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Distributions to minority investors                                                       |  |                             | (141     | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Purchase of limited partnership unit                                                      |  |                             | (8,854   | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Net cash provided by (used in) financing activities                                       |  |                             | (126,715 | ) |                            | 53,028   |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                             | (1,355   | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                             | (177,422 | ) |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|Cash and cash equivalents, beginning of year                                              |  |                             | 218,646  |   |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  
|Cash and cash equivalents, end of year                                                    |  | $                           | 41,224   |   |                            |         |   |                               |      |   |                               |     |   |                    |  |                    |  |              |  |                     |       |   |                     |       |   |                    |       |  
|                                                                                          |  |                             |          |   |                            |          |   |                               |       |   |                               |      |   |                    |   |                    |   |              |   |                     |        |   |                     |        |   |                    |        |  



41



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)



|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|----------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------- | -
|                                                                                          |  | MeriStarSub 1C,LLC |   |  | MeriStarSub 8E,LLC |   |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |   |  | MeriStarSub 5R,LLC |  | MeriStarSub 8A,LLC |  | MeriStarSub 6D,LLC |   |  | MeriStarSub 6E,LLC |   |  | MeriStarSub 4E,L.P. |  
|Operating activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Net income (loss)                                                                         |  | (936               | ) |  | 722                |   |  | 486                |   |  | 596                |   |  | 834                |   |  |                   |  |                   |  | 1,385              |   |  | 3,797              |   |  | (1,058              | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Depreciation and amortization                                                             |  | 1,419              |   |  | 594                |   |  | 316                |   |  | 155                |   |  | 698                |   |  |                   |  |                   |  | 484                |   |  | 1,596              |   |  | 254                 |  
|Loss on asset impairments                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  | 1,021               |  
|Loss on sale of assets, before tax effect                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  | 1,219               |  
|Loss on early extinguishments of debt                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Minority interests                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Equity in income of unconsolidated affiliates                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Cash distributions from equity method of investment                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Amortization of unearned stock-based compensation                                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Redemption of POPs                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Deferred income taxes                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Changes in operating assets and liabilities:                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Accounts receivable                                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  | (21                | ) |  |                   |   |  | (64                 | )
|Prepaid expenses and other assets                                                         |  | 102                |   |  | 16                 |   |  | 11                 |   |  | 53                 |   |  | 26                 |   |  |                   |  |                   |  | 14                 |   |  | 60                 |   |  | (17                 | )
|Due from/to Interstate Hotels & Resorts                                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  | (29                | ) |  | 32                 |   |  | (55                | ) |  | 16                 |   |  | 71                 |   |  |                   |  |                   |  | (59                | ) |  | 188                |   |  | (346                | )
|Due from/to subsidiaries                                                                  |  | 288                |   |  | (829               | ) |  | 1,983              |   |  | (170               | ) |  | (1,545             | ) |  |                   |  |                   |  | (885               | ) |  | (825               | ) |  | (4,050              | )
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Net cash provided by (used in) operating activities                                       |  | 844                |   |  | 535                |   |  | 2,741              |   |  | 650                |   |  | 84                 |   |  |                   |  |                   |  | 918                |   |  | 4,816              |   |  | (3,041              | )
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Investing activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Capital expenditures for property and equipment                                           |  | (844               | ) |  | (535               | ) |  | (2,741             | ) |  | (650               | ) |  | (84                | ) |  |                   |  |                   |  | (918               | ) |  | (4,816             | ) |  | (61                 | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Proceeds from sales of assets                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  | 3,400               |  
|(Increase) decrease in restricted cash                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Costs associated with disposition program and other, net                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  | (298                | )
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Net cash (used in) provided by investing activities                                       |  | (844               | ) |  | (535               | ) |  | (2,741             | ) |  | (650               | ) |  | (84                | ) |  |                   |  |                   |  | (918               | ) |  | (4,816             | ) |  | 3,041               |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Financing activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Prepayments on long-term debt                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Scheduled payments on long-term debt                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Proceeds from issuance of long-term debt                                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Loans to/from subsidiaries                                                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Contributions from partners                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Distributions to minority investors                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Purchase of limited partnership unit                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Net cash provided by (used in) financing activities                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|Cash and cash equivalents, beginning of year                                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  
|Cash and cash equivalents, end of year                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                   |   |  |                   |   |  |                    |  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                    |   |  |                    |   |  |                     |  





42



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)



|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|----------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------------------- | -
|                                                                                          |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |   |  | MeriStarSub 6G,LLC |   |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P. |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |   |  | MeriStarSub 3D,LLC |   |  | MeriStarSub 1A,LLC |   |  | MeriStarSub 7AJointVenture |  
|Operating activities:                                                                     |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Net income (loss)                                                                         |  | 1,448              |   |  | 824                 |   |  | 2,416              |   |  | (61                | ) |  |                    |  | (403                | ) |  | 529                |   |  | 568                |   |  | (1,958             | ) |  | (732                       | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Depreciation and amortization                                                             |  | 493                |   |  | 772                 |   |  | 724                |   |  |                   |   |  |                    |  | 43                  |   |  | 651                |   |  | 703                |   |  | 279                |   |  | 121                        |  
|Loss on asset impairments                                                                 |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  | 2,871              |   |  | 1,005                      |  
|Loss on sale of assets, before tax effect                                                 |  |                   |   |  |                    |   |  |                   |   |  | 1,577              |   |  |                    |  | 980                 |   |  |                   |   |  |                   |   |  |                   |   |  | 55                         |  
|Loss on early extinguishments of debt                                                     |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Minority interests                                                                        |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Equity in income of unconsolidated affiliates                                             |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Cash distributions from equity method of investment                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Amortization of unearned stock-based compensation                                         |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Redemption of POPs                                                                        |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Deferred income taxes                                                                     |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Changes in operating assets and liabilities:                                              |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Accounts receivable                                                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  | 44                         |  
|Prepaid expenses and other assets                                                         |  | 51                 |   |  | 115                 |   |  | 23                 |   |  | 117                |   |  |                    |  | (8                  | ) |  | 14                 |   |  | 27                 |   |  | 40                 |   |  | 1                          |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  | (46                | ) |  | (101                | ) |  | 130                |   |  | 306                |   |  |                    |  | (178                | ) |  | 14                 |   |  | (30                | ) |  | 19                 |   |  | (150                       | )
|Due from/to subsidiaries                                                                  |  | (198               | ) |  | 5,598               |   |  | (1,704             | ) |  | (6,824             | ) |  |                    |  | (4,883              | ) |  | 341                |   |  | (964               | ) |  | (1,190             | ) |  | (4,966                     | )
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Net cash provided by (used in) operating activities                                       |  | 1,748              |   |  | 7,208               |   |  | 1,589              |   |  | (4,885             | ) |  |                    |  | (4,449              | ) |  | 1,549              |   |  | 304                |   |  | 61                 |   |  | (4,622                     | )
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Investing activities:                                                                     |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Capital expenditures for property and equipment                                           |  | (1,748             | ) |  | (7,208              | ) |  | (1,589             | ) |  | (2                 | ) |  |                    |  | (10                 | ) |  | (1,549             | ) |  | (304               | ) |  | (61                | ) |  | (23                        | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Proceeds from sales of assets                                                             |  |                   |   |  |                    |   |  |                   |   |  | 5,000              |   |  |                    |  | 4,650               |   |  |                   |   |  |                   |   |  |                   |   |  | 4,850                      |  
|(Increase) decrease in restricted cash                                                    |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Costs associated with disposition program and other, net                                  |  |                   |   |  |                    |   |  |                   |   |  | (113               | ) |  |                    |  | (191                | ) |  |                   |   |  |                   |   |  |                   |   |  | (205                       | )
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Net cash (used in) provided by investing activities                                       |  | (1,748             | ) |  | (7,208              | ) |  | (1,589             | ) |  | 4,885              |   |  |                    |  | 4,449               |   |  | (1,549             | ) |  | (304               | ) |  | (61                | ) |  | 4,622                      |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Financing activities:                                                                     |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Prepayments on long-term debt                                                             |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Scheduled payments on long-term debt                                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Proceeds from issuance of long-term debt                                                  |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Loans to/from subsidiaries                                                                |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Contributions from partners                                                               |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Distributions to minority investors                                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Purchase of limited partnership unit                                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Net cash provided by (used in) financing activities                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|Cash and cash equivalents, beginning of year                                              |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  
|Cash and cash equivalents, end of year                                                    |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |  
|                                                                                          |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |  



43



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)



|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|----------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ----------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ---------------------- | - |  | ------------------ |  | ------------------ | - |  | ------------------ | -
|                                                                                          |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |   |  | MeriStarSub 4A,LP |   |  | MeriStarSub 4D,LLC |   |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |   |  | MDV LimitedPartnership |   |  | MeriStarSub 5C,LLC |  | MeriStarSub 6J,LLC |   |  | MeriStarSub 1D,LLC |  
|Operating activities:                                                                     |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Net income (loss)                                                                         |  |                   |   |  | 89                 |   |  | 97                |   |  |                   |   |  |                   |   |  | 1,852              |   |  | 295                    |   |  |                   |  | 1,798              |   |  | 1,457              |  
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Depreciation and amortization                                                             |  |                   |   |  | 43                 |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  | 154                    |   |  |                   |  | 556                |   |  | 2,286              |  
|Loss on asset impairments                                                                 |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Loss on sale of assets, before tax effect                                                 |  |                   |   |  | 20                 |   |  | 470               |   |  |                   |   |  |                   |   |  | (937               | ) |  |                       |   |  |                   |  |                   |   |  |                   |  
|Loss on early extinguishments of debt                                                     |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Minority interests                                                                        |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Equity in income of unconsolidated affiliates                                             |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Cash distributions from equity method of investment                                       |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Amortization of unearned stock-based compensation                                         |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Redemption of POPs                                                                        |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Deferred income taxes                                                                     |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                              |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Accounts receivable                                                                       |  | 2,345              |   |  |                   |   |  |                  |   |  |                   |   |  | 2,002              |   |  | (178               | ) |  |                       |   |  |                   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                                                         |  |                   |   |  | 1                  |   |  | (9                | ) |  | 3                  |   |  |                   |   |  | 15                 |   |  | 20                     |   |  |                   |  | 29                 |   |  | 341                |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  | 8                  |   |  | (161               | ) |  | (342              | ) |  |                   |   |  | 8                  |   |  | (25                | ) |  | (21                    | ) |  |                   |  | 275                |   |  | 91                 |  
|Due from/to subsidiaries                                                                  |  | (2,353             | ) |  | (3,051             | ) |  | (3,528            | ) |  | (3                 | ) |  | (2,010             | ) |  | (15,033            | ) |  | (343                   | ) |  |                   |  | (2,212             | ) |  | (3,349             | )
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                       |  |                   |   |  | (3,059             | ) |  | (3,312            | ) |  |                   |   |  |                   |   |  | (14,306            | ) |  | 105                    |   |  |                   |  | 446                |   |  | 826                |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Investing activities:                                                                     |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Capital expenditures for property and equipment                                           |  |                   |   |  |                   |   |  | (9                | ) |  |                   |   |  |                   |   |  |                   |   |  | (105                   | ) |  |                   |  | (446               | ) |  | (826               | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Proceeds from sales of assets                                                             |  |                   |   |  | 3,300              |   |  | 3,575             |   |  |                   |   |  |                   |   |  | 14,775             |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                    |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                  |  |                   |   |  | (241               | ) |  | (254              | ) |  |                   |   |  |                   |   |  | (469               | ) |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Net cash (used in) provided by investing activities                                       |  |                   |   |  | 3,059              |   |  | 3,312             |   |  |                   |   |  |                   |   |  | 14,306             |   |  | (105                   | ) |  |                   |  | (446               | ) |  | (826               | )
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Financing activities:                                                                     |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                             |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Scheduled payments on long-term debt                                                      |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                  |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Contributions from partners                                                               |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Distributions to minority investors                                                       |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Purchase of limited partnership unit                                                      |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                       |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                              |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                    |  |                   |   |  |                   |   |  |                  |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |  |                   |   |  |                   |  
|                                                                                          |  |                    |   |  |                    |   |  |                   |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |  |                    |   |  |                    |  





44



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)



|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|----------------------------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------- | - |  | ------------------ | -
|                                                                                          |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |   |  | MeriStarSub 7G,LLC |   |  | MeriStarSub 6B,LLC |   |  | MeriStarSub 4I,L.P. |   |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |   |  | MeriStarSub 7H,LLC |   |  | AGH PSS I,Inc. |   |  | MeriStarSub 2D,LLC |  
|Operating activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Net income (loss)                                                                         |  | (787                | ) |  | 3,878              |   |  | 103                |   |  | 489                |   |  |                    |   |  | (804               | ) |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Depreciation and amortization                                                             |  | 99                  |   |  | 1,572              |   |  | 49                 |   |  | 448                |   |  |                    |   |  | 1,432              |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Loss on asset impairments                                                                 |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Loss on sale of assets, before tax effect                                                 |  | 1,558               |   |  |                   |   |  | 544                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Loss on early extinguishments of debt                                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Minority interests                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Equity in income of unconsolidated affiliates                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Cash distributions from equity method of investment                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Amortization of unearned stock-based compensation                                         |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Redemption of POPs                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Deferred income taxes                                                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Changes in operating assets and liabilities:                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Accounts receivable                                                                       |  |                    |   |  | 157                |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  | 46                 |   |  | 43                 |   |  |               |   |  | 1,166              |  
|Prepaid expenses and other assets                                                         |  | 1                   |   |  | 146                |   |  |                   |   |  | 9                  |   |  |                    |   |  | 60                 |   |  | 1                  |   |  |                   |   |  | 1              |   |  |                   |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  | (1,080              | ) |  | (1,788             | ) |  | 6                  |   |  | (18                | ) |  | 61                  |   |  | 153                |   |  | 2                  |   |  |                   |   |  |               |   |  | 1                  |  
|Due from/to subsidiaries                                                                  |  | (3,835              | ) |  | (1,301             | ) |  | (2,625             | ) |  | 148                |   |  | (61                 | ) |  | (479               | ) |  | (49                | ) |  | (43                | ) |  | 303            |   |  | (1,167             | )
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Net cash provided by (used in) operating activities                                       |  | (4,044              | ) |  | 2,664              |   |  | (1,923             | ) |  | 1,076              |   |  |                    |   |  | 362                |   |  |                   |   |  |                   |   |  | 304            |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Investing activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Capital expenditures for property and equipment                                           |  | (51                 | ) |  | (2,664             | ) |  | (16                | ) |  | (1,076             | ) |  |                    |   |  | (362               | ) |  |                   |   |  |                   |   |  | (304           | ) |  |                   |  
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Proceeds from sales of assets                                                             |  | 4,500               |   |  |                   |   |  | 2,300              |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|(Increase) decrease in restricted cash                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Costs associated with disposition program and other, net                                  |  | (405                | ) |  |                   |   |  | (361               | ) |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Net cash (used in) provided by investing activities                                       |  | 4,044               |   |  | (2,664             | ) |  | 1,923              |   |  | (1,076             | ) |  |                    |   |  | (362               | ) |  |                   |   |  |                   |   |  | (304           | ) |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Financing activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Prepayments on long-term debt                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Scheduled payments on long-term debt                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Proceeds from issuance of long-term debt                                                  |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Loans to/from subsidiaries                                                                |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Contributions from partners                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Distributions to minority investors                                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Purchase of limited partnership unit                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Net cash provided by (used in) financing activities                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|Cash and cash equivalents, beginning of year                                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  
|Cash and cash equivalents, end of year                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |               |   |  |                   |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                |   |  |                    |  



45



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)



|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|----------------------------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | -
|                                                                                          |  | MeriStarSub 4F,L.P. |   |  | MeriStarSub 5K,LLC |   |  | MeriStarSub 5M,LLC |   |  | MeriStarSub 1E,LLC |   |  | MeriStarSub 5O,LLC |   |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |   |  | MeriStarSub 5G,L.P. |  
|Operating activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net income (loss)                                                                         |  | 503                 |   |  | 1,835              |   |  | 483                |   |  |                   |   |  | 237                |   |  | (217                | ) |  | (2,242             | ) |  | (373                | ) |  |                   |   |  | 2,514               |  
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Depreciation and amortization                                                             |  | 1,114               |   |  | 1,247              |   |  | 423                |   |  |                   |   |  | 210                |   |  |                    |   |  |                   |   |  | 424                 |   |  |                   |   |  | 6,364               |  
|Loss on asset impairments                                                                 |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | 903                |   |  | 981                 |   |  |                   |   |  |                    |  
|Loss on sale of assets, before tax effect                                                 |  |                    |   |  | (1,372             | ) |  |                   |   |  |                   |   |  |                   |   |  | 964                 |   |  | 3,338              |   |  | 460                 |   |  |                   |   |  |                    |  
|Loss on early extinguishments of debt                                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Minority interests                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Equity in income of unconsolidated affiliates                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Cash distributions from equity method of investment                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Amortization of unearned stock-based compensation                                         |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Redemption of POPs                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Deferred income taxes                                                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Changes in operating assets and liabilities:                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Accounts receivable                                                                       |  |                    |   |  |                   |   |  |                   |   |  | 198                |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Prepaid expenses and other assets                                                         |  | 23                  |   |  | (74                | ) |  | 70                 |   |  | (1                 | ) |  | 24                 |   |  | (4                  | ) |  | (240               | ) |  | (89                 | ) |  | (3                 | ) |  | 139                 |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  | (36                 | ) |  | (3,028             | ) |  |                   |   |  | (14                | ) |  | 8                  |   |  | (410                | ) |  | (257               | ) |  | (488                | ) |  |                   |   |  | (775                | )
|Due from/to subsidiaries                                                                  |  | 1,122               |   |  | (22,788            | ) |  | (332               | ) |  | (183               | ) |  | (115               | ) |  | (7,329              | ) |  | 10,489             |   |  | (8,117              | ) |  | 3                  |   |  | 1,256               |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash provided by (used in) operating activities                                       |  | 2,726               |   |  | (24,180            | ) |  | 644                |   |  |                   |   |  | 364                |   |  | (6,996              | ) |  | 11,991             |   |  | (7,202              | ) |  |                   |   |  | 9,498               |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Investing activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Capital expenditures for property and equipment                                           |  | (2,726              | ) |  | (64                | ) |  | (644               | ) |  |                   |   |  | (364               | ) |  | (22                 | ) |  | (2                 | ) |  | (4                  | ) |  |                   |   |  | (9,498              | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Proceeds from sales of assets                                                             |  |                    |   |  | 25,000             |   |  |                   |   |  |                   |   |  |                   |   |  | 7,500               |   |  | 8,398              |   |  | 7,975               |   |  |                   |   |  |                    |  
|(Increase) decrease in restricted cash                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Costs associated with disposition program and other, net                                  |  |                    |   |  | (756               | ) |  |                   |   |  |                   |   |  |                   |   |  | (482                | ) |  | (656               | ) |  | (769                | ) |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash (used in) provided by investing activities                                       |  | (2,726              | ) |  | 24,180             |   |  | (644               | ) |  |                   |   |  | (364               | ) |  | 6,996               |   |  | 7,740              |   |  | 7,202               |   |  |                   |   |  | (9,498              | )
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Financing activities:                                                                     |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Prepayments on long-term debt                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (19,731            | ) |  |                    |   |  |                   |   |  |                    |  
|Scheduled payments on long-term debt                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Proceeds from issuance of long-term debt                                                  |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Loans to/from subsidiaries                                                                |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Contributions from partners                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Distributions to minority investors                                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Purchase of limited partnership unit                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash provided by (used in) financing activities                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (19,731            | ) |  |                    |   |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Cash and cash equivalents, beginning of year                                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Cash and cash equivalents, end of year                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                          |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  



46



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)

|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|----------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------------------- | - |  | ------------------ |  | ------------------
|                                                                                          |  | MeriStarSub 5N,LLC |   |  | MeriStarSub 5P,LLC |   |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |   |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |   |  | MeriStarPentagon City, LLC |   |  | MeriStarSub 6K,LLC |  | MeriStarSub 5E,LLC
|Operating activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Net income (loss)                                                                         |  | 370                |   |  | 625                |   |  | (43                | ) |  | 498                |   |  | 1,410              |   |  | (857               | ) |  | 950                |   |  | (161                       | ) |  |                   |  |                  
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Depreciation and amortization                                                             |  | 123                |   |  | 5                  |   |  | 5,171              |   |  | 565                |   |  | 1,081              |   |  |                   |   |  | 1,272              |   |  | 3,515                      |   |  |                   |  |                  
|Loss on asset impairments                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Loss on sale of assets, before tax effect                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 2,090              |   |  |                   |   |  |                           |   |  |                   |  |                  
|Loss on early extinguishments of debt                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Minority interests                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Equity in income of unconsolidated affiliates                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Cash distributions from equity method of investment                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Amortization of unearned stock-based compensation                                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Redemption of POPs                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Deferred income taxes                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Changes in operating assets and liabilities:                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Accounts receivable                                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (359               | ) |  | 1                  |   |  | 2,421                      |   |  |                   |  |                  
|Prepaid expenses and other assets                                                         |  | 27                 |   |  | 6                  |   |  | 399                |   |  | 84                 |   |  | 49                 |   |  | 14                 |   |  | 32                 |   |  | (466                       | ) |  |                   |  |                  
|Due from/to Interstate Hotels & Resorts                                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Accounts payable, accrued expenses, accrued interest                                      |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|and other liabilities                                                                     |  | 15                 |   |  |                   |   |  | (5                 | ) |  | 171                |   |  | 309                |   |  | 183                |   |  | 71                 |   |  | 541                        |   |  |                   |  |                  
|Due from/to subsidiaries                                                                  |  | (217               | ) |  | (636               | ) |  | 1,004              |   |  | (648               | ) |  | (1,482             | ) |  | (9,529             | ) |  | 1,073              |   |  | 30,841                     |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Net cash provided by (used in) operating activities                                       |  | 318                |   |  |                   |   |  | 6,526              |   |  | 670                |   |  | 1,367              |   |  | (8,458             | ) |  | 3,399              |   |  | 36,691                     |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Investing activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (91,124                    | ) |  |                   |  |                  
|Capital expenditures for property and equipment                                           |  | (318               | ) |  |                   |   |  | (6,526             | ) |  | (670               | ) |  | (1,367             | ) |  | (3                 | ) |  | (3,399             | ) |  | (552                       | ) |  |                   |  |                  
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Proceeds from sales of assets                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 8,800              |   |  |                   |   |  |                           |   |  |                   |  |                  
|(Increase) decrease in restricted cash                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Costs associated with disposition program and other, net                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (339               | ) |  |                   |   |  |                           |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Net cash (used in) provided by investing activities                                       |  | (318               | ) |  |                   |   |  | (6,526             | ) |  | (670               | ) |  | (1,367             | ) |  | 8,458              |   |  | (3,399             | ) |  | (91,676                    | ) |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Financing activities:                                                                     |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Prepayments on long-term debt                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Scheduled payments on long-term debt                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (291                       | ) |  |                   |  |                  
|Proceeds from issuance of long-term debt                                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 55,276                     |   |  |                   |  |                  
|Loans to/from subsidiaries                                                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Contributions from partners                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Distributions to minority investors                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Purchase of limited partnership unit                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Net cash provided by (used in) financing activities                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 54,985                     |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Effect of exchange rate changes on cash and cash equivalents                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Net (decrease) increase in cash and cash equivalents                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|Cash and cash equivalents, beginning of year                                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   
|Cash and cash equivalents, end of year                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |  |                  
|                                                                                          |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |  |                   



47



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2004 (Dollars in thousands)

|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|----------------------------------------------------------------------------------------- |  | ------------------ |  | ------------------ |  | ----------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | -------------------------- | - |  | --------------------- | - |  | -------------------------- | - |  | ------------------------- | - |  | ----------------- | -------- | -
|                                                                                          |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC |  | MeriStarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotel Lessee, Inc. |   |  | GuarantorEliminations |   |  | GuarantorSubsidiariesTotal |   |  | ConsolidationEliminations |   |  | TotalConsolidated |         
|Operating activities:                                                                     |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net income (loss)                                                                         |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (65,669                    | ) |  | (1,439                | ) |  | (35,127                    | ) |  | 3,957                     |   |  | $                 | (99,133  | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Depreciation and amortization                                                             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 98                         |   |  |                      |   |  | 41,321                     |   |  |                          |   |  |                   | 102,114  |  
|Loss on asset impairments                                                                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | 6,781                      |   |  |                          |   |  |                   | 12,337   |  
|Loss on sale of assets, before tax effect                                                 |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | 10,966                     |   |  |                          |   |  |                   | 14,065   |  
|Loss on early extinguishments of debt                                                     |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 7,967    |  
|Minority interests                                                                        |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (79      | )
|Equity in income of unconsolidated affiliates                                             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | (237                       | ) |  | (3,957                    | ) |  |                   | (237     | )
|Cash distributions from equity method of investment                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | 840                        |   |  |                          |   |  |                   | 840      |  
|Amortization of unearned stock-based compensation                                         |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (2,939   | )
|Redemption of POPs                                                                        |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (4,602   | )
|Deferred income taxes                                                                     |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (730     | )
|Changes in operating assets and liabilities:                                              |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Accounts receivable                                                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 7,309                      |   |  | 740                   |   |  | 15,110                     |   |  | 9,414                     |   |  |                   | 4,009    |  
|Prepaid expenses and other assets                                                         |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 5,810                      |   |  |                      |   |  | 7,203                      |   |  |                          |   |  |                   | 8,990    |  
|Due from/to Interstate Hotels & Resorts                                                   |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 964                        |   |  |                      |   |  | 964                        |   |  |                          |   |  |                   | (7,132   | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 7,620                      |   |  |                      |   |  | (1,867                     | ) |  | (9,414                    | ) |  |                   | (24,604  | )
|Due from/to subsidiaries                                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (40,637                    | ) |  | 699                   |   |  | (110,090                   | ) |  |                          |   |  |                   |         |  
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash provided by (used in) operating activities                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (84,505                    | ) |  |                      |   |  | (64,136                    | ) |  |                          |   |  |                   | 10,866   |  
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Investing activities:                                                                     |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Acquisition of hotels, net of cash acquired of $4.1 million                               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | (91,124                    | ) |  |                          |   |  |                   | (182,375 | )
|Capital expenditures for property and equipment                                           |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (170                       | ) |  |                      |   |  | (63,268                    | ) |  |                          |   |  |                   | (133,953 | )
|Investment in and advance to Radisson Lexington Avenue Hotel                              |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (50,493  | )
|Proceeds from sales of assets                                                             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | 104,023                    |   |  |                          |   |  |                   | 155,698  |  
|(Increase) decrease in restricted cash                                                    |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (1,313                     | ) |  |                      |   |  | (1,198                     | ) |  |                          |   |  |                   | (15,890  | )
|Costs associated with disposition program and other, net                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | (5,539                     | ) |  |                          |   |  |                   | (7,475   | )
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash (used in) provided by investing activities                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | (1,483                     | ) |  |                      |   |  | (57,106                    | ) |  |                          |   |  |                   | (234,488 | )
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Financing activities:                                                                     |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Prepayments on long-term debt                                                             |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | (19,731                    | ) |  |                          |   |  |                   | (105,049 | )
|Scheduled payments on long-term debt                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | (291                       | ) |  |                          |   |  |                   | (13,336  | )
|Proceeds from issuance of long-term debt                                                  |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  | 55,276                     |   |  |                          |   |  |                   | 109,718  |  
|Loans to/from subsidiaries                                                                |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 93,067                     |   |  |                      |   |  | 93,067                     |   |  |                          |   |  |                   |         |  
|Contributions from partners                                                               |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | 72,296   |  
|Distributions to minority investors                                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (141     | )
|Purchase of limited partnership unit                                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (8,854   | )
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash provided by (used in) financing activities                                       |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 93,067                     |   |  |                      |   |  | 128,321                    |   |  |                          |   |  |                   | 54,634   |  
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  |                           |   |  |                      |   |  |                           |   |  |                          |   |  |                   | (1,355   | )
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Net (decrease) increase in cash and cash equivalents                                      |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 7,079                      |   |  |                      |   |  | 7,079                      |   |  |                          |   |  |                   | (170,343 | )
|Cash and cash equivalents, beginning of year                                              |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 12,230                     |   |  |                      |   |  | 12,230                     |   |  |                          |   |  |                   | 230,876  |  
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  
|Cash and cash equivalents, end of year                                                    |  |                   |  |                   |  |                              |  |                               |  |                   |  |                   |  | 19,309                     |   |  |                      |   |  | 19,309                     |   |  |                          |   |  | $                 | 60,533   |  
|                                                                                          |  |                    |  |                    |  |                               |  |                                |  |                    |  |                    |  |                            |   |  |                       |   |  |                            |   |  |                           |   |  |                   |          |  



48



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ------------------------- | -------- | - | ------------------ | - | ------------------ | - | -------------- | - | ------------------- | ------ | - | ------------------- | ------ | - | ------------------ | ------ | - | ------------------ | ------ | - | ------------------ | ------ | -
|                                                                                                   |  | MeriStarHospitality OP,L.P. |          |   | Non-GuarantorSubsidiaries |          |   | MeriStarSub 7C,LLC |   | MeriStarSub 8G,LLC |   | AGH Upreit LLC |   | MeriStarSub 6H,L.P. |        |   | MeriStarSub 8F,L.P. |        |   | MeriStarSub 8B,LLC |        |   | MeriStarSub 1C,LLC |        |   | MeriStarSub 8E,LLC |       
|Operating activities:                                                                              |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Net income (loss)                                                                                  |  | $                           | (404,437 | ) |                           | (88,833  | ) |                    |  |                    |  |                |  |                     | 10     |   |                     | 1,208  |   |                    | 3,441  |   |                    | (578   | ) |                    | 697    |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Depreciation and amortization                                                                      |  |                             | 10,522   |   |                           | 52,099   |   |                    |  |                    |  |                |  |                     | 569    |   |                     | 587    |   |                    | 2,416  |   |                    | 1,015  |   |                    | 583    |  
|Equity in earnings of affiliate                                                                    |  |                             | 270,566  |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Loss on asset impairments                                                                          |  |                             | 25,000   |   |                           | 121,649  |   |                    |  |                    |  |                |  |                     | 500    |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                             | 165      |   |                           | (798     | ) |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Gain on early extinguishment of debt                                                               |  |                             | (4,085   | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Minority interests                                                                                 |  |                             | (62      | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Amortization of unearned stock based compensation                                                  |  |                             | 2,544    |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Change in value of interest rate swaps                                                             |  |                             | (3,977   | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Deferred income taxes                                                                              |  |                             | (3,923   | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Changes in operating assets and liabilities:                                                       |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Accounts receivable                                                                                |  |                             | (6,276   | ) |                           | 355      |   |                    |  |                    |  |                |  |                     |       |   |                     | (28    | ) |                    |       |   |                    |       |   |                    |       |  
|Prepaid expenses and other assets                                                                  |  |                             | (4,498   | ) |                           | 1,941    |   |                    |  |                    |  |                |  |                     | (1     | ) |                     | 30     |   |                    | 38     |   |                    | 88     |   |                    | 10     |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                             | 6,551    |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  |                             | (864     | ) |                           | (13,443  | ) |                    |  |                    |  |                |  |                     | (18    | ) |                     | (140   | ) |                    | (124   | ) |                    | (98    | ) |                    | (24    | )
|Due from subsidiaries                                                                              |  |                             | 302,842  |   |                           | (178,645 | ) |                    |  |                    |  |                |  |                     | (1,044 | ) |                     | (1,626 | ) |                    | (4,428 | ) |                    | 887    |   |                    | (1,047 | )
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Net cash provided by (used in) operating activities                                                |  |                             | 190,068  |   |                           | (105,675 | ) |                    |  |                    |  |                |  |                     | 16     |   |                     | 31     |   |                    | 1,343  |   |                    | 1,314  |   |                    | 219    |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Investing activities:                                                                              |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Capital expenditures for property and equipment                                                    |  |                             | (2,001   | ) |                           | (13,202  | ) |                    |  |                    |  |                |  |                     | (16    | ) |                     | (31    | ) |                    | (1,343 | ) |                    | (1,314 | ) |                    | (219   | )
|Proceeds from sales of assets                                                                      |  |                             |         |   |                           | 34,065   |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Sales of marketable securities                                                                     |  |                             | 18,040   |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Purchases of marketable securities                                                                 |  |                             | (18,040  | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                             | 42,052   |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|(Increase) decrease in restricted cash                                                             |  |                             | (24,558  | ) |                           | 2,400    |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Costs associated with disposition program and other, net                                           |  |                             |         |   |                           | (2,314   | ) |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Net cash provided by (used in) investing activities                                                |  |                             | 15,493   |   |                           | 20,949   |   |                    |  |                    |  |                |  |                     | (16    | ) |                     | (31    | ) |                    | (1,343 | ) |                    | (1,314 | ) |                    | (219   | )
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Financing activities:                                                                              |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Prepayments on long-term debt                                                                      |  |                             | (185,879 | ) |                           | (16,274  | ) |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Scheduled payments on long-term debt                                                               |  |                             | (16,845  | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Proceeds from issuance of long-term debt                                                           |  |                             | 159,468  |   |                           | 101,000  |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Loans to/from subsidiaries                                                                         |  |                             | (59,629  | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Contributions from partners                                                                        |  |                             | 95,358   |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Distributions paid to minority investors                                                           |  |                             | (565     | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Purchase of limited partnership unit                                                               |  |                             | (65      | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Net cash provided by (used in) financing activities                                                |  |                             | (8,157   | ) |                           | 84,726   |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                             | (129     | ) |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                             | 197,275  |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|Cash and cash equivalents, beginning of year                                                       |  |                             | 21,372   |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  
|Cash and cash equivalents, end of year                                                             |  | $                           | 218,647  |   |                           |         |   |                    |  |                    |  |                |  |                     |       |   |                     |       |   |                    |       |   |                    |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                           |          |   |                    |   |                    |   |                |   |                     |        |   |                     |        |   |                    |        |   |                    |        |   |                    |        |  



49



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | -
|                                                                                                   |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |   |  | MeriStarSub 5R,LLC |  | MeriStarSub 8A,LLC |   |  | MeriStarSub 6D,LLC |   |  | MeriStarSub 6E,LLC |   |  | MeriStarSub 4E,L.P. |   |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |  
|Operating activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net income (loss)                                                                                  |  | (1,688             | ) |  | 682                |   |  | 595                |   |  |                   |  |                   |   |  | 1,112              |   |  | 2,913              |   |  | (14,966             | ) |  | 2,120              |   |  | (7,943              | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Depreciation and amortization                                                                      |  | 425                |   |  | 142                |   |  | 709                |   |  |                   |  |                   |   |  | 546                |   |  | 1,629              |   |  | 577                 |   |  | 535                |   |  | 941                 |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Loss on asset impairments                                                                          |  | 2,037              |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  | 15,347              |   |  |                   |   |  | 9,231               |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Gain on early extinguishment of debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Minority interests                                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Deferred income taxes                                                                              |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Changes in operating assets and liabilities:                                                       |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Accounts receivable                                                                                |  |                   |   |  | 28                 |   |  |                   |   |  |                   |  | (17                | ) |  | (2                 | ) |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Prepaid expenses and other assets                                                                  |  | 1                  |   |  | 24                 |   |  | 10                 |   |  |                   |  |                   |   |  | 7                  |   |  | 33                 |   |  | 17                  |   |  | 33                 |   |  | 68                  |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Accounts payable, accrued expenses, accrued interest                                               |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|and other liabilities                                                                              |  | 46                 |   |  | (50                | ) |  | (68                | ) |  |                   |  | 36                 |   |  | 20                 |   |  | (76                | ) |  | (64                 | ) |  | (12                | ) |  | (73                 | )
|Due from subsidiaries                                                                              |  | (756               | ) |  | (564               | ) |  | (1,128             | ) |  |                   |  | (19                | ) |  | (1,664             | ) |  | (3,839             | ) |  | (773                | ) |  | (2,421             | ) |  | (1,958              | )
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash provided by (used in) operating activities                                                |  | 65                 |   |  | 262                |   |  | 118                |   |  |                   |  |                   |   |  | 19                 |   |  | 660                |   |  | 138                 |   |  | 255                |   |  | 266                 |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Investing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Capital expenditures for property and equipment                                                    |  | (65                | ) |  | (262               | ) |  | (118               | ) |  |                   |  |                   |   |  | (19                | ) |  | (660               | ) |  | (138                | ) |  | (240               | ) |  | (266                | )
|Proceeds from sales of assets                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Sales of marketable securities                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Purchases of marketable securities                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash provided by (used in) investing activities                                                |  | (65                | ) |  | (262               | ) |  | (118               | ) |  |                   |  |                   |   |  | (19                | ) |  | (660               | ) |  | (138                | ) |  | (240               | ) |  | (266                | )
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Financing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (15                | ) |  |                    |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Contributions from partners                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Purchase of limited partnership unit                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net cash provided by (used in) financing activities                                                |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (15                | ) |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |  



50



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | -------------------------- | - |  | ------------------ | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 6G,LLC |   |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P |   |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |   |  | MeriStarSub 3D,LLC |   |  | MeriStarSub 1A,LLC |   |  | MeriStarSub 7AJointVenture |   |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |  
|Operating activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Net income (loss)                                                                                  |  | 1,302              |   |  | (4,555             | ) |  |                   |   |  | (5,491              | ) |  | 533                |   |  | 423                |   |  | 927                |   |  | (4,907                     | ) |  | (6,486             | ) |  | (1,933             | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Depreciation and amortization                                                                      |  | 848                |   |  | 669                |   |  |                   |   |  | 394                 |   |  | 615                |   |  | 776                |   |  | 450                |   |  | 336                        |   |  | 357                |   |  | 236                |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Loss on asset impairments                                                                          |  |                   |   |  | 5,213              |   |  |                   |   |  | 5,187               |   |  |                   |   |  |                   |   |  |                   |   |  | 5,478                      |   |  | 4,670              |   |  | 2,137              |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | 1,335              |   |  |                   |  
|Gain on early extinguishment of debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Minority interests                                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Deferred income taxes                                                                              |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Accounts receivable                                                                                |  |                   |   |  |                   |   |  | 1                  |   |  | 14                  |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | (2,357             | ) |  |                   |  
|Prepaid expenses and other assets                                                                  |  | 12                 |   |  | (117               | ) |  |                   |   |  | 8                   |   |  | 8                  |   |  | 16                 |   |  | 56                 |   |  | 4                          |   |  |                   |   |  | (1                 | )
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (177               | ) |  | (229               | ) |  | (130               | ) |  | 6                   |   |  | (12                | ) |  | (31                | ) |  | (138               | ) |  | (68                        | ) |  |                   |   |  | (2                 | )
|Due from subsidiaries                                                                              |  | (1,788             | ) |  | (970               | ) |  | 129                |   |  | 53                  |   |  | (547               | ) |  | (1,051             | ) |  | (1,099             | ) |  | (669                       | ) |  | 5,889              |   |  | (403               | )
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 197                |   |  | 11                 |   |  |                   |   |  | 171                 |   |  | 597                |   |  | 133                |   |  | 196                |   |  | 174                        |   |  | 3,408              |   |  | 34                 |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Investing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (197               | ) |  | (11                | ) |  |                   |   |  | (171                | ) |  | (597               | ) |  | (133               | ) |  | (196               | ) |  | (174                       | ) |  | (1,286             | ) |  | (34                | )
|Proceeds from sales of assets                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | 3,780              |   |  |                   |  
|Sales of marketable securities                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Purchases of marketable securities                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | (202               | ) |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (197               | ) |  | (11                | ) |  |                   |   |  | (171                | ) |  | (597               | ) |  | (133               | ) |  | (196               | ) |  | (174                       | ) |  | 2,292              |   |  | (34                | )
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Financing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | (5,700             | ) |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Contributions from partners                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Purchase of limited partnership unit                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  | (5,700             | ) |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                           |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                            |   |  |                    |   |  |                    |  



51



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ---------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 4A,L.P. |   |  | MeriStarSub 4D,LLC |   |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |   |  | MDV LimitedPartnership |   |  | MeriStarSub 5C,LLC |   |  | MeriStarSub 6J,LLC |   |  | MeriStarSub 1D,LLC |   |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |  
|Operating activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Net income (loss)                                                                                  |  | (845                | ) |  | (939               | ) |  | (5,037             | ) |  | (12,550            | ) |  | 228                    |   |  | (5,634             | ) |  | 1,307              |   |  | 852                |   |  | (9,925              | ) |  | 2,698              |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Depreciation and amortization                                                                      |  | 125                 |   |  | 55                 |   |  | 289                |   |  | 679                |   |  | 139                    |   |  | 431                |   |  | 581                |   |  | 2,276              |   |  | 497                 |   |  | 1,723              |  
|Equity in earnings of affiliate                                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Loss on asset impairments                                                                          |  | 1,455               |   |  | 1,004              |   |  | 2,828              |   |  | 13,286             |   |  |                       |   |  | 7,187              |   |  |                   |   |  |                   |   |  | 10,288              |   |  |                   |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                    |   |  |                   |   |  | 1,524              |   |  |                   |   |  |                       |   |  | (1,344             | ) |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Gain on early extinguishment of debt                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Minority interests                                                                                 |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Deferred income taxes                                                                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Accounts receivable                                                                                |  |                    |   |  |                   |   |  | (2,002             | ) |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (300               | )
|Prepaid expenses and other assets                                                                  |  | 9                   |   |  | (3                 | ) |  |                   |   |  | (14                | ) |  | 13                     |   |  | 70                 |   |  | 9                  |   |  | 209                |   |  | (1                  | ) |  | 33                 |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (4                  | ) |  | (112               | ) |  | (73                | ) |  | (26                | ) |  | 1                      |   |  | (866               | ) |  | (100               | ) |  | (228               | ) |  | (68                 | ) |  | (383               | )
|Due from subsidiaries                                                                              |  | (476                | ) |  | (2,837             | ) |  | 8,906              |   |  | (1,310             | ) |  | (369                   | ) |  | (4,795             | ) |  | (1,679             | ) |  | (2,856             | ) |  | (670                | ) |  | (3,538             | )
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 264                 |   |  | (2,832             | ) |  | 6,435              |   |  | 65                 |   |  | 12                     |   |  | (4,951             | ) |  | 118                |   |  | 253                |   |  | 121                 |   |  | 233                |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Investing activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (264                | ) |  | (91                | ) |  | (308               | ) |  | (65                | ) |  | (12                    | ) |  | (356               | ) |  | (118               | ) |  | (253               | ) |  | (121                | ) |  | (233               | )
|Proceeds from sales of assets                                                                      |  |                    |   |  | 3,070              |   |  | 3,612              |   |  |                   |   |  |                       |   |  | 5,500              |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Sales of marketable securities                                                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Purchases of marketable securities                                                                 |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                    |   |  | (147               | ) |  | (442               | ) |  |                   |   |  |                       |   |  | (193               | ) |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (264                | ) |  | 2,832              |   |  | 2,862              |   |  | (65                | ) |  | (12                    | ) |  | 4,951              |   |  | (118               | ) |  | (253               | ) |  | (121                | ) |  | (233               | )
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Financing activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                    |   |  |                   |   |  | (9,297             | ) |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Contributions from partners                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Purchase of limited partnership unit                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                    |   |  |                   |   |  | (9,297             | ) |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                       |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                        |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |  



52



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|-------------------------------------------------------------------------------------------------- |  | -------------------- | - |  | -------------------- | - |  | --------------------- | - |  | -------------------- | - |  | -------------------- | - |  | -------------------- | - |  | --------------- | - |  | -------------------- | - |  | --------------------- | - |  | -------------------- | -
|                                                                                                   |  | MeriStar Sub 7G, LLC |   |  | MeriStar Sub 6B, LLC |   |  | MeriStar Sub 4I, L.P. |   |  | MeriStar Sub 5D, LLC |   |  | MeriStar Sub 5H, LLC |   |  | MeriStar Sub 7H, LLC |   |  | AGH PSS I, Inc. |   |  | MeriStar Sub 2D, LLC |   |  | MeriStar Sub 4F, L.P. |   |  | MeriStar Sub 5K, LLC |  
|Operating activities:                                                                              |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Net income (loss)                                                                                  |  | (10,327              | ) |  | 429                  |   |  | (2,614                | ) |  | (779                 | ) |  | (17,432              | ) |  | (1,564               | ) |  | (929            | ) |  | (9,171               | ) |  | 483                   |   |  | 593                  |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Depreciation and amortization                                                                      |  | 492                  |   |  | 449                  |   |  | 261                   |   |  | 1,459                |   |  | 1,179                |   |  | 169                  |   |  |                |   |  | 390                  |   |  | 1,107                 |   |  | 1,290                |  
|Equity in earnings of affiliate                                                                    |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Loss on asset impairments                                                                          |  | 10,216               |   |  |                     |   |  | 1,259                 |   |  |                     |   |  | 18,075               |   |  | 1,383                |   |  | 1,787           |   |  | 8,685                |   |  |                      |   |  |                     |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                     |   |  |                     |   |  | 961                   |   |  |                     |   |  | 293                  |   |  | 741                  |   |  | 318             |   |  | 295                  |   |  |                      |   |  |                     |  
|Gain on early extinguishment of debt                                                               |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Minority interests                                                                                 |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Amortization of unearned stock based compensation                                                  |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Change in value of interest rate swaps                                                             |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Deferred income taxes                                                                              |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Changes in operating assets and liabilities:                                                       |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Accounts receivable                                                                                |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  | (46                  | ) |  | (43                  | ) |  |                |   |  | (1,166               | ) |  |                      |   |  |                     |  
|Prepaid expenses and other assets                                                                  |  |                     |   |  | 5                    |   |  |                      |   |  | 33                   |   |  | (1                   | ) |  |                     |   |  | (1              | ) |  |                     |   |  | (13                   | ) |  | 74                   |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (43                  | ) |  | (12                  | ) |  | (472                  | ) |  | (194                 | ) |  | (148                 | ) |  | (267                 | ) |  | (107            | ) |  | (64                  | ) |  | (29                   | ) |  | (1,288               | )
|Due from subsidiaries                                                                              |  | (244                 | ) |  | (714                 | ) |  | (744                  | ) |  | (427                 | ) |  | (27,496              | ) |  | (3,670               | ) |  | (14,293         | ) |  | 6,904                |   |  | (845                  | ) |  | (340                 | )
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Net cash provided by (used in) operating activities                                                |  | 94                   |   |  | 157                  |   |  | (1,349                | ) |  | 92                   |   |  | (25,576              | ) |  | (3,251               | ) |  | (13,225         | ) |  | 5,873                |   |  | 703                   |   |  | 329                  |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Investing activities:                                                                              |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Capital expenditures for property and equipment                                                    |  | (94                  | ) |  | (157                 | ) |  | (65                   | ) |  | (92                  | ) |  | (901                 | ) |  | (271                 | ) |  | (800            | ) |  | (1,118               | ) |  | (703                  | ) |  | (329                 | )
|Proceeds from sales of assets                                                                      |  |                     |   |  |                     |   |  | 1,500                 |   |  |                     |   |  | 27,250               |   |  | 3,750                |   |  | 14,500          |   |  | 6,608                |   |  |                      |   |  |                     |  
|Sales of marketable securities                                                                     |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Purchases of marketable securities                                                                 |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|(Increase) decrease in restricted cash                                                             |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Costs associated with disposition program and other, net                                           |  |                     |   |  |                     |   |  | (86                   | ) |  |                     |   |  | (773                 | ) |  | (215                 | ) |  | (475            | ) |  | (591                 | ) |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Net cash provided by (used in) investing activities                                                |  | (94                  | ) |  | (157                 | ) |  | 1,349                 |   |  | (92                  | ) |  | 25,576               |   |  | 3,264                |   |  | 13,225          |   |  | 4,899                |   |  | (703                  | ) |  | (329                 | )
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Financing activities:                                                                              |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Prepayments on long-term debt                                                                      |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  | (13                  | ) |  |                |   |  | (10,772              | ) |  |                      |   |  |                     |  
|Scheduled payments on long-term debt                                                               |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Proceeds from issuance of long-term debt                                                           |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Loans to/from subsidiaries                                                                         |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Contributions from partners                                                                        |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Distributions paid to minority investors                                                           |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Purchase of limited partnership unit                                                               |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Net cash provided by (used in) financing activities                                                |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  | (13                  | ) |  |                |   |  | (10,772              | ) |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|Cash and cash equivalents, beginning of year                                                       |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  
|Cash and cash equivalents, end of year                                                             |  |                     |   |  |                     |   |  |                      |   |  |                     |   |  |                     |   |  |                     |   |  |                |   |  |                     |   |  |                      |   |  |                     |  
|                                                                                                   |  |                      |   |  |                      |   |  |                       |   |  |                      |   |  |                      |   |  |                      |   |  |                 |   |  |                      |   |  |                       |   |  |                      |  



53



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 5M,LLC |   |  | MeriStarSub 1E,LLC |   |  | MeriStarSub 5O,LLC |   |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |   |  | MeriStarSub 5G,L.P. |   |  | MeriStarSub 5N,LLC |   |  | MeriStarSub 5P,LLC |  
|Operating activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Net income (loss)                                                                                  |  | 813                |   |  | 8,205              |   |  | 377                |   |  | (1,275              | ) |  | (17,784            | ) |  | (11,178             | ) |  | (1,245             | ) |  | 1,691               |   |  | 612                |   |  | 1,132              |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Depreciation and amortization                                                                      |  | 472                |   |  | 244                |   |  | 228                |   |  | 555                 |   |  | 895                |   |  | 720                 |   |  | 259                |   |  | 6,290               |   |  | 137                |   |  | 5                  |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Loss on asset impairments                                                                          |  |                   |   |  |                   |   |  |                   |   |  | 638                 |   |  | 16,455             |   |  | 11,850              |   |  | 1,064              |   |  |                    |   |  |                   |   |  |                   |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                   |   |  | (7,247             | ) |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  | 415                |   |  |                    |   |  |                   |   |  |                   |  
|Gain on early extinguishment of debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Minority interests                                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Deferred income taxes                                                                              |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Accounts receivable                                                                                |  |                   |   |  | (198               | ) |  |                   |   |  |                    |   |  | 2                  |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  | (38                | )
|Prepaid expenses and other assets                                                                  |  | 48                 |   |  | 1                  |   |  | 15                 |   |  | 4                   |   |  | 241                |   |  | 89                  |   |  | 3                  |   |  | 260                 |   |  | 18                 |   |  | 4                  |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (48                | ) |  | 1                  |   |  | (15                | ) |  | (33                 | ) |  | 19                 |   |  | (70                 | ) |  | (173               | ) |  | (63                 | ) |  | (18                | ) |  | (4                 | )
|Due from subsidiaries                                                                              |  | (1,251             | ) |  | (18,078            | ) |  | (591               | ) |  | 250                 |   |  | 1,573              |   |  | (1,350              | ) |  | (6,513             | ) |  | (7,142              | ) |  | (720               | ) |  | (1,099             | )
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 34                 |   |  | (17,072            | ) |  | 14                 |   |  | 139                 |   |  | 1,401              |   |  | 61                  |   |  | (6,190             | ) |  | 1,036               |   |  | 29                 |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Investing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (34                | ) |  | 1,204              |   |  | (14                | ) |  | (139                | ) |  | (485               | ) |  | (61                 | ) |  | (809               | ) |  | (1,036              | ) |  | (29                | ) |  |                   |  
|Proceeds from sales of assets                                                                      |  |                   |   |  | 16,500             |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  | 7,750              |   |  |                    |   |  |                   |   |  |                   |  
|Sales of marketable securities                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Purchases of marketable securities                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Net payments from Interstate Hotels & Resorts                                                      |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  | (632               | ) |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  | (751               | ) |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (34                | ) |  | 17,072             |   |  | (14                | ) |  | (139                | ) |  | (485               | ) |  | (61                 | ) |  | 6,190              |   |  | (1,036              | ) |  | (29                | ) |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Financing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (916               | ) |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Contributions from partners                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Purchase of limited partnership unit                                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | (916               | ) |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |  



54



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | ------------------ |  | -----------------------------
|                                                                                                   |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |   |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |   |  | MeriStarSub 6K,LLC |   |  | MeriStarSub 5E,LLC |   |  | MeriStarSub 6I,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC
|Operating activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Net income (loss)                                                                                  |  | 3,719              |   |  | 1,045              |   |  | 1,013              |   |  | (15,069            | ) |  | 1,152              |   |  | 2,154              |   |  | 2,194              |   |  |                   |  |                   |  |                             
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Depreciation and amortization                                                                      |  | 3,483              |   |  | 560                |   |  | 1,291              |   |  | 872                |   |  | 1,270              |   |  | 538                |   |  | 1,438              |   |  |                   |  |                   |  |                             
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Loss on asset impairments                                                                          |  |                   |   |  |                   |   |  |                   |   |  | 16,128             |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Gain (loss) on sale of assets, before tax effect                                                   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Gain on early extinguishment of debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Minority interests                                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Change in value of interest rate swaps                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Deferred income taxes                                                                              |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Changes in operating assets and liabilities:                                                       |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Accounts receivable                                                                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | (11                | ) |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Prepaid expenses and other assets                                                                  |  | 370                |   |  | 53                 |   |  | 29                 |   |  | (14                | ) |  | 19                 |   |  | 2                  |   |  | 12                 |   |  |                   |  |                   |  |                             
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (322               | ) |  | (67                | ) |  | (192               | ) |  | (66                | ) |  | (90                | ) |  | (215               | ) |  | 246                |   |  |                   |  |                   |  |                             
|Due from subsidiaries                                                                              |  | (4,315             | ) |  | (1,363             | ) |  | (1,415             | ) |  | (1,362             | ) |  | (2,031             | ) |  | (2,374             | ) |  | (3,833             | ) |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Net cash provided by (used in) operating activities                                                |  | 2,935              |   |  | 228                |   |  | 726                |   |  | 489                |   |  | 309                |   |  | 105                |   |  | 57                 |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Investing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Capital expenditures for property and equipment                                                    |  | (2,935             | ) |  | (228               | ) |  | (726               | ) |  | (489               | ) |  | (309               | ) |  | (105               | ) |  | (57                | ) |  |                   |  |                   |  |                             
|Proceeds from sales of assets                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Sales of marketable securities                                                                     |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Purchases of marketable securities                                                                 |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Net payments from Interstate Hotels & Resorts                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Net cash provided by (used in) investing activities                                                |  | (2,935             | ) |  | (228               | ) |  | (726               | ) |  | (489               | ) |  | (309               | ) |  | (105               | ) |  | (57                | ) |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Financing activities:                                                                              |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Prepayments on long-term debt                                                                      |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Contributions from partners                                                                        |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Distributions paid to minority investors                                                           |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Purchase of limited partnership unit                                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Net cash provided by (used in) financing activities                                                |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                   |  |                             
|                                                                                                   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                    |  |                              



55



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2003 (Dollars in thousands)



|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------------ | - |  | -------------------------- | - |  | ------------------------- | - |  | ----------------- | -------- | -
|                                                                                                   |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarHotelLessee,Inc. |   |  | GuarantorSubsidiariesTotal |   |  | ConsolidationEliminations |   |  | TotalConsolidated |         
|Operating activities:                                                                              |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Net income (loss)                                                                                  |  |                               |  |                   |  |                   |  | (55,549                  | ) |  | (181,733                   | ) |  | 270,566                   |   |  | $                 | (404,437 | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Depreciation and amortization                                                                      |  |                               |  |                   |  |                   |  | 1,067                    |   |  | 49,270                     |   |  |                          |   |  |                   | 111,891  |  
|Equity in earnings of affiliate                                                                    |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  | (270,566                  | ) |  |                   |         |  
|Loss on asset impairments                                                                          |  |                               |  |                   |  |                   |  |                         |   |  | 173,388                    |   |  |                          |   |  |                   | 320,037  |  
|Gain (loss) on sale of assets, before tax effect                                                   |  |                               |  |                   |  |                   |  | 5,698                    |   |  | 2,989                      |   |  |                          |   |  |                   | 2,356    |  
|Gain on early extinguishment of debt                                                               |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (4,085   | )
|Minority interests                                                                                 |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (62      | )
|Amortization of unearned stock based compensation                                                  |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 2,544    |  
|Change in value of interest rate swaps                                                             |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (3,977   | )
|Deferred income taxes                                                                              |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (3,923   | )
|Changes in operating assets and liabilities:                                                       |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Accounts receivable                                                                                |  |                               |  |                   |  |                   |  | 4,203                    |   |  | (1,960                     | ) |  |                          |   |  |                   | (7,881   | )
|Prepaid expenses and other assets                                                                  |  |                               |  |                   |  |                   |  | 292                      |   |  | 2,212                      |   |  |                          |   |  |                   | (345     | )
|Due from/to Interstate Hotels & Resorts                                                            |  |                               |  |                   |  |                   |  | (640                     | ) |  | (640                       | ) |  |                          |   |  |                   | 5,911    |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  |                               |  |                   |  |                   |  | (13,840                  | ) |  | (20,859                    | ) |  |                          |   |  |                   | (35,166  | )
|Due from subsidiaries                                                                              |  |                               |  |                   |  |                   |  | (254                     | ) |  | (124,197                   | ) |  |                          |   |  |                   |         |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash provided by (used in) operating activities                                                |  |                               |  |                   |  |                   |  | (59,023                  | ) |  | (101,530                   | ) |  |                          |   |  |                   | (17,137  | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Investing activities:                                                                              |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Capital expenditures for property and equipment                                                    |  |                               |  |                   |  |                   |  | (894                     | ) |  | (20,987                    | ) |  |                          |   |  |                   | (36,190  | )
|Proceeds from sales of assets                                                                      |  |                               |  |                   |  |                   |  |                         |   |  | 93,820                     |   |  |                          |   |  |                   | 127,885  |  
|Sales of marketable securities                                                                     |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 18,040   |  
|Purchases of marketable securities                                                                 |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (18,040  | )
|Net payments from Interstate Hotels & Resorts                                                      |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 42,052   |  
|(Increase) decrease in restricted cash                                                             |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (22,158  | )
|Costs associated with disposition program and other, net                                           |  |                               |  |                   |  |                   |  |                         |   |  | (4,507                     | ) |  |                          |   |  |                   | (6,821   | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash provided by (used in) investing activities                                                |  |                               |  |                   |  |                   |  | (894                     | ) |  | 68,326                     |   |  |                          |   |  |                   | 104,768  |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Financing activities:                                                                              |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Prepayments on long-term debt                                                                      |  |                               |  |                   |  |                   |  |                         |   |  | (26,713                    | ) |  |                          |   |  |                   | (228,866 | )
|Scheduled payments on long-term debt                                                               |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (16,845  | )
|Proceeds from issuance of long-term debt                                                           |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 260,468  |  
|Loans to/from subsidiaries                                                                         |  |                               |  |                   |  |                   |  | 59,629                   |   |  | 59,629                     |   |  |                          |   |  |                   |         |  
|Contributions from partners                                                                        |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | 95,358   |  
|Distributions paid to minority investors                                                           |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (565     | )
|Purchase of limited partnership unit                                                               |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (65      | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Net cash provided by (used in) financing activities                                                |  |                               |  |                   |  |                   |  | 59,629                   |   |  | 32,916                     |   |  |                          |   |  |                   | 109,485  |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Effect of exchange rate changes on cash and cash equivalents                                       |  |                               |  |                   |  |                   |  |                         |   |  |                           |   |  |                          |   |  |                   | (129     | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                               |  |                   |  |                   |  | (288                     | ) |  | (288                       | ) |  |                          |   |  |                   | 196,987  |  
|Cash and cash equivalents, beginning of year                                                       |  |                               |  |                   |  |                   |  | 12,517                   |   |  | 12,517                     |   |  |                          |   |  |                   | 33,889   |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  
|Cash and cash equivalents, end of year                                                             |  |                               |  |                   |  |                   |  | 12,229                   |   |  | 12,229                     |   |  |                          |   |  | $                 | 230,876  |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                          |   |  |                            |   |  |                           |   |  |                   |          |  



56



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|-------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | -------------------------- | ------- | - | ------------------ | - | ------------ | - | ------------------ | ---- | - | ------------------ | ------ | - | ------------------- | ------ | - | ------------------ | - | ------------------- | ------ | - | ------------------ | ------ | -
|                                                                                                   |  | MeriStarHospitality OP,L.P. |          |   | Non- GuarantorSubsidiaries |         |   | MeriStarSub 7C,LLC |   | AGHUpreitLLC |   | MeriStarSub 5N,LLC |      |   | MeriStarSub 8A,LLC |        |   | MeriStarSub 8F,L.P. |        |   | MeriStarSub 8G,LLC |   | MeriStarSub 6H,L.P. |        |   | MeriStarSub 8B,LLC |       
|Operating activities:                                                                              |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Net income (loss)                                                                                  |  | $                           | (170,169 | ) |                            | (2,843  | ) |                    |  |              |  |                    | 646  |   |                    | (4,107 | ) |                     | 1,106  |   |                    |  |                     | 942    |   |                    | 3,356  |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Depreciation and amortization                                                                      |  |                             | 13,433   |   |                            | 50,468  |   |                    |  |              |  |                    | 133  |   |                    | 112    |   |                     | 453    |   |                    |  |                     | 431    |   |                    | 2,385  |  
|Equity in earnings of affiliate                                                                    |  |                             | 33,753   |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Loss on asset impairments                                                                          |  |                             |         |   |                            | 23,580  |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Loss on sale of assets, before tax effect                                                          |  |                             |         |   |                            | 14,807  |   |                    |  |              |  |                    |     |   |                    | 4,812  |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Loss on fair value of non-hedging derivatives                                                      |  |                             | 4,735    |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                             | 14,517   |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Minority interests                                                                                 |  |                             | (15      | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Amortization of unearned stock based compensation                                                  |  |                             | 4,543    |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Change in value of interest rate swaps                                                             |  |                             | (7,612   | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Deferred income taxes                                                                              |  |                             | (2,143   | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     | (96    | ) |                    |  |                     |       |   |                    |       |  
|Changes in operating assets and liabilities:                                                       |  |                             |         |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Accounts receivable                                                                                |  |                             | (7,852   | ) |                            | (129    | ) |                    |  |              |  |                    | (16  | ) |                    | (15    | ) |                     | 8      |   |                    |  |                     |       |   |                    |       |  
|Prepaid expenses and other assets                                                                  |  |                             | (1,780   | ) |                            | (589    | ) |                    |  |              |  |                    |     |   |                    |       |   |                     | 19     |   |                    |  |                     |       |   |                    |       |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                             | 144      |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Due from subsidiaries                                                                              |  |                             | 193,137  |   |                            | (96,158 | ) |                    |  |              |  |                    | (713 | ) |                    | (2,462 | ) |                     | (1,401 | ) |                    |  |                     | (1,303 | ) |                    | (5,055 | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  |                             | (537     | ) |                            | (3,742  | ) |                    |  |              |  |                    | (7   | ) |                    | 457    |   |                     | 47     |   |                    |  |                     | (5     | ) |                    | 214    |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Net cash provided by (used in) operating activities                                                |  |                             | 74,154   |   |                            | (14,606 | ) |                    |  |              |  |                    | 43   |   |                    | (1,203 | ) |                     | 136    |   |                    |  |                     | 65     |   |                    | 900    |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Investing activities:                                                                              |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Capital expenditures for property and equipment                                                    |  |                             | (2,324   | ) |                            | (17,000 | ) |                    |  |              |  |                    | (43  | ) |                    | (4,616 | ) |                     | (136   | ) |                    |  |                     | (65    | ) |                    | (900   | )
|Proceeds from sales of assets                                                                      |  |                             |         |   |                            | 42,780  |   |                    |  |              |  |                    |     |   |                    | 6,270  |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                             | (7,500   | ) |                            | 775     |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|(Increase) decrease in restricted cash                                                             |  |                             | (1,623   | ) |                            | 2,562   |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Costs associated with disposition program and other, net                                           |  |                             |         |   |                            | (1,358  | ) |                    |  |              |  |                    |     |   |                    | (451   | ) |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Net cash provided by (used in) investing activities                                                |  |                             | (11,447  | ) |                            | 27,759  |   |                    |  |              |  |                    | (43  | ) |                    | 1,203  |   |                     | (136   | ) |                    |  |                     | (65    | ) |                    | (900   | )
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Financing activities:                                                                              |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Prepayments on long-term debt                                                                      |  |                             | (314,843 | ) |                            | (18,157 | ) |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Scheduled payments on long-term debt                                                               |  |                             | (19,466  | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Proceeds from issuance of long-term debt                                                           |  |                             | 300,150  |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Loans to/from subsidiaries                                                                         |  |                             | (15,396  | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Contributions from partners                                                                        |  |                             | 3,153    |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Distributions paid to minority investors                                                           |  |                             | (3,060   | ) |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Net cash provided by (used in) financing activities                                                |  |                             | (49,462  | ) |                            | (18,157 | ) |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Effect of exchange rate changes on cash                                                            |  |                             | 205      |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                             | 13,450   |   |                            | (5,004  | ) |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|Cash and cash equivalents, beginning of year                                                       |  |                             | 6,798    |   |                            |        |   |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  
|Cash and cash equivalents, end of year                                                             |  | $                           | 20,248   |   |                            | (5,004  | ) |                    |  |              |  |                    |     |   |                    |       |   |                     |       |   |                    |  |                     |       |   |                    |       |  
|                                                                                                   |  |                             |          |   |                            |         |   |                    |   |              |   |                    |      |   |                    |        |   |                     |        |   |                    |   |                     |        |   |                    |        |  



57



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|-------------------------------------------------------------------------------------------------- |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ |  | --------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | -
|                                                                                                   |  | MeriStarSub 1C,L.P. |   |  | MeriStarSub 8E,LLC |   |  | MeriStarSub 7F,LLC |   |  | MeriStarSub 5L,LLC |   |  | MeriStarSub 3C,LLC |   |  | MeriStarSub 5R,LLC |  | OldMeriStarSub 8A,LLC |   |  | MeriStarSub 6D,LLC |   |  | MeriStarSub 6E,LLC |   |  | MeriStarSub 4E,L.P. |  
|Operating activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Net income (loss)                                                                                  |  | (458                | ) |  | 851                |   |  | 470                |   |  | 733                |   |  | 557                |   |  |                   |  |                      |   |  | 1,340              |   |  | 3,141              |   |  | 83                  |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Depreciation and amortization                                                                      |  | 1,021               |   |  | 600                |   |  | 463                |   |  | 135                |   |  | 706                |   |  |                   |  |                      |   |  | 526                |   |  | 1,692              |   |  | 918                 |  
|Equity in earnings of affiliate                                                                    |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Loss on asset impairments                                                                          |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Loss on sale of assets, before tax effect                                                          |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Loss on fair value of non-hedging derivatives                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Minority interests                                                                                 |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Amortization of unearned stock based compensation                                                  |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Change in value of interest rate swaps                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Deferred income taxes                                                                              |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Changes in operating assets and liabilities:                                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Accounts receivable                                                                                |  |                    |   |  |                   |   |  |                   |   |  | (28                | ) |  |                   |   |  |                   |  |                      |   |  | 14                 |   |  |                   |   |  |                    |  
|Prepaid expenses and other assets                                                                  |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  | 1                     |   |  |                   |   |  |                   |   |  |                    |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Due from subsidiaries                                                                              |  | (302                | ) |  | (1,317             | ) |  | (866               | ) |  | (585               | ) |  | (1,195             | ) |  |                   |  | 46                    |   |  | (1,633             | ) |  | (4,432             | ) |  | (766                | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | 141                 |   |  | (16                | ) |  | (6                 | ) |  | 32                 |   |  | 38                 |   |  |                   |  | (46                   | ) |  | (83                | ) |  | 163                |   |  | (41                 | )
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Net cash provided by (used in) operating activities                                                |  | 402                 |   |  | 118                |   |  | 61                 |   |  | 287                |   |  | 106                |   |  |                   |  | 1                     |   |  | 164                |   |  | 564                |   |  | 194                 |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Investing activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Capital expenditures for property and equipment                                                    |  | (402                | ) |  | (118               | ) |  | (61                | ) |  | (287               | ) |  | (106               | ) |  |                   |  | (1                    | ) |  | (164               | ) |  | (564               | ) |  | (194                | )
|Proceeds from sales of assets                                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|(Increase) decrease in restricted cash                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Costs associated with disposition program and other, net                                           |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Net cash provided by (used in) investing activities                                                |  | (402                | ) |  | (118               | ) |  | (61                | ) |  | (287               | ) |  | (106               | ) |  |                   |  | (1                    | ) |  | (164               | ) |  | (564               | ) |  | (194                | )
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Financing activities:                                                                              |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Prepayments on long-term debt                                                                      |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Scheduled payments on long-term debt                                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Proceeds from issuance of long-term debt                                                           |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Loans to/from subsidiaries                                                                         |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Contributions from partners                                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Distributions paid to minority investors                                                           |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Net cash provided by (used in) financing activities                                                |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Effect of exchange rate changes on cash                                                            |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|Cash and cash equivalents, beginning of year                                                       |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  
|Cash and cash equivalents, end of year                                                             |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  |                      |   |  |                   |   |  |                   |   |  |                    |  
|                                                                                                   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  |                       |   |  |                    |   |  |                    |   |  |                     |  



58



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 1B,LLC |   |  | MeriStarSub 5F,L.P. |   |  | MeriStarSub 6G,LLC |   |  | MeriStarSub 8C,LLC |   |  | MeriStarSub 4C,L.P. |   |  | MeriStarSub 4H,L.P. |   |  | MeriStarSub 7E,LLC |   |  | MeriStarSub 3D,LLC |   |  | MeriStarSub 1A,LLC |   |  | MeriStarSub 5E,LLC |  
|Operating activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net income (loss)                                                                                  |  | 2,213              |   |  | 1,235               |   |  | 1,327              |   |  | (20,129            | ) |  | (1,407              | ) |  | (145                | ) |  | 568                |   |  | 1,123              |   |  | 938                |   |  | 3,232              |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Depreciation and amortization                                                                      |  | 602                |   |  | 1,058               |   |  | 837                |   |  | 1,389              |   |  | 283                 |   |  | 541                 |   |  | 634                |   |  | 849                |   |  | 453                |   |  | 1,943              |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on asset impairments                                                                          |  |                   |   |  |                    |   |  |                   |   |  | 20,111             |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on sale of assets, before tax effect                                                          |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  | 1,578               |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Minority interests                                                                                 |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Deferred income taxes                                                                              |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  | (32                 | ) |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Accounts receivable                                                                                |  | (96                | ) |  |                    |   |  |                   |   |  |                   |   |  | (1                  | ) |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                                                                  |  | (1                 | ) |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  | (14                 | ) |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Due from subsidiaries                                                                              |  | (2,474             | ) |  | (1,778              | ) |  | (1,789             | ) |  | (1,168             | ) |  | (11,656             | ) |  | (262                | ) |  | (1,021             | ) |  | (1,789             | ) |  | (1,277             | ) |  | (5,007             | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | 62                 |   |  | 76                  |   |  | (44                | ) |  | (56                | ) |  | 350                 |   |  | (21                 | ) |  | (31                | ) |  | 61                 |   |  | (27                | ) |  | (117               | )
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 306                |   |  | 591                 |   |  | 331                |   |  | 147                |   |  | (10,885             | ) |  | 99                  |   |  | 150                |   |  | 244                |   |  | 87                 |   |  | 51                 |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Investing activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (306               | ) |  | (586                | ) |  | (331               | ) |  | (147               | ) |  | (48                 | ) |  | (99                 | ) |  | (150               | ) |  | (244               | ) |  | (87                | ) |  | (51                | )
|Proceeds from sales of assets                                                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  | 11,600              |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  | (667                | ) |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (306               | ) |  | (586                | ) |  | (331               | ) |  | (147               | ) |  | 10,885              |   |  | (99                 | ) |  | (150               | ) |  | (244               | ) |  | (87                | ) |  | (51                | )
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Financing activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  | (5                  | ) |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Contributions from partners                                                                        |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                   |   |  | (5                  | ) |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash                                                            |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                    |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                     |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  





59



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | -------------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | --------------------- | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 7AJointVenture |   |  | MeriStarSub 6K,LLC |   |  | MeriStarSub 2B,LLC |   |  | MeriStarSub 3A,LLC |   |  | MeriStarSub 4A,L.P. |   |  | MeriStarSub 4D,LLC |   |  | MeriStarSub 2A,LLC |   |  | MeriStarSub 6L,LLC |   |  | MDVLimitedPartnership |   |  | MeriStarSub 5C,LLC |  
|Operating activities:                                                                              |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Net income (loss)                                                                                  |  | 638                        |   |  | 2,819              |   |  | (464               | ) |  | 195                |   |  | (2,398              | ) |  | (3,591             | ) |  | (605               | ) |  | 658                |   |  | 246                   |   |  | 267                |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Depreciation and amortization                                                                      |  | 416                        |   |  | 736                |   |  | 417                |   |  | 256                |   |  |                    |   |  | 311                |   |  | 320                |   |  | 890                |   |  | 137                   |   |  | 597                |  
|Equity in earnings of affiliate                                                                    |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Loss on asset impairments                                                                          |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  | 3,170               |   |  | 3,617              |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Loss on sale of assets, before tax effect                                                          |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Minority interests                                                                                 |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Deferred income taxes                                                                              |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Accounts receivable                                                                                |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Prepaid expenses and other assets                                                                  |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  | 4                     |   |  | (53                | )
|Due from/to Interstate Hotels & Resorts                                                            |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Due from subsidiaries                                                                              |  | (767                       | ) |  | (3,386             | ) |  | 192                |   |  | 242                |   |  | (525                | ) |  | 90                 |   |  | 271                |   |  | (1,325             | ) |  | (373                  | ) |  | (587               | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (12                        | ) |  | 44                 |   |  | 64                 |   |  | 65                 |   |  | 33                  |   |  | 49                 |   |  | 34                 |   |  | (16                | ) |  | 8                     |   |  | 38                 |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 275                        |   |  | 213                |   |  | 209                |   |  | 758                |   |  | 280                 |   |  | 476                |   |  | 20                 |   |  | 207                |   |  | 22                    |   |  | 262                |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Investing activities:                                                                              |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (270                       | ) |  | (213               | ) |  | (248               | ) |  | (758               | ) |  | (280                | ) |  | (476               | ) |  | (85                | ) |  | (207               | ) |  | (22                   | ) |  | (262               | )
|Proceeds from sales of assets                                                                      |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (270                       | ) |  | (213               | ) |  | (248               | ) |  | (758               | ) |  | (280                | ) |  | (476               | ) |  | (85                | ) |  | (207               | ) |  | (22                   | ) |  | (262               | )
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Financing activities:                                                                              |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  | (5                         | ) |  |                   |   |  | 39                 |   |  |                   |   |  |                    |   |  |                   |   |  | 65                 |   |  |                   |   |  |                      |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Contributions from partners                                                                        |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  | (5                         | ) |  |                   |   |  | 39                 |   |  |                   |   |  |                    |   |  |                   |   |  | 65                 |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Effect of exchange rate changes on cash                                                            |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                           |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                   |  
|                                                                                                   |  |                            |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                    |  





60



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 6J,LLC |   |  | MeriStarSub 1D,LLC |   |  | MeriStarSub 7B,L.P. |   |  | MeriStarSub 7D,LLC |   |  | MeriStarSub 7G,LLC |   |  | MeriStarSub 6B,LLC |   |  | MeriStarSub 4I,L.P. |   |  | MeriStarSub 5D,LLC |   |  | MeriStarSub 5H,LLC |   |  | MeriStarSub 7H,LLC |  
|Operating activities:                                                                              |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Net income (loss)                                                                                  |  | 1,564              |   |  | 1,875              |   |  | (6,877              | ) |  | 2,208              |   |  | (393               | ) |  | 517                |   |  | (5,445              | ) |  | (1,257             | ) |  | 615                |   |  | 484                |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Depreciation and amortization                                                                      |  | 647                |   |  | 2,286              |   |  | 929                 |   |  | 1,660              |   |  | 753                |   |  | 456                |   |  | 437                 |   |  | 1,450              |   |  | 1,976              |   |  | 395                |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Loss on asset impairments                                                                          |  |                   |   |  |                   |   |  | 6,925               |   |  |                   |   |  |                   |   |  |                   |   |  | 4,803               |   |  |                   |   |  |                   |   |  | 22                 |  
|Loss on sale of assets, before tax effect                                                          |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Minority interests                                                                                 |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Deferred income taxes                                                                              |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Accounts receivable                                                                                |  |                   |   |  |                   |   |  |                    |   |  | (114               | ) |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Prepaid expenses and other assets                                                                  |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Due from subsidiaries                                                                              |  | (1,909             | ) |  | (3,161             | ) |  | (1,069              | ) |  | (3,465             | ) |  | (78                | ) |  | (821               | ) |  | 394                 |   |  | 236                |   |  | (1,905             | ) |  | (575               | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (59                | ) |  | (473               | ) |  | 137                 |   |  | (136               | ) |  | (124               | ) |  | (35                | ) |  | 51                  |   |  | (36                | ) |  | 261                |   |  | (147               | )
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 243                |   |  | 527                |   |  | 45                  |   |  | 153                |   |  | 158                |   |  | 117                |   |  | 240                 |   |  | 393                |   |  | 947                |   |  | 179                |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Investing activities:                                                                              |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (243               | ) |  | (527               | ) |  | (45                 | ) |  | (153               | ) |  | (158               | ) |  | (117               | ) |  | (240                | ) |  | (396               | ) |  | (947               | ) |  | (179               | )
|Proceeds from sales of assets                                                                      |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (243               | ) |  | (527               | ) |  | (45                 | ) |  | (153               | ) |  | (158               | ) |  | (117               | ) |  | (240                | ) |  | (396               | ) |  | (947               | ) |  | (179               | )
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Financing activities:                                                                              |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | 3                  |   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Contributions from partners                                                                        |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  | 3                  |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash                                                            |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |  





61



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | --------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | --------------------- | - |  | ------------------- | - |  | ------------------ | -
|                                                                                                   |  | AGH PSS I, Inc. |   |  | MeriStarSub 2D,LLC |   |  | MeriStarSub 4F,L.P. |   |  | MeriStarSub 5K,LLC |   |  | MeriStarSub 5M,LLC |   |  | MeriStarSub 1E,LLC |   |  | MeriStarSub 5O,LLC |   |  | MeriStarSub 6MCompany |   |  | MeriStarSub 4B,L.P. |   |  | MeriStarSub 6C,LLC |  
|Operating activities:                                                                              |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Net income (loss)                                                                                  |  | 1,639           |   |  | (224               | ) |  | 412                 |   |  | 970                |   |  | 881                |   |  | 1,216              |   |  | 392                |   |  | 2,794                 |   |  | (4,245              | ) |  | 2,011              |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Depreciation and amortization                                                                      |  |                |   |  | 474                |   |  | 1,122               |   |  | 1,187              |   |  | 454                |   |  | 298                |   |  | 219                |   |  | 1,211                 |   |  | 521                 |   |  | 777                |  
|Equity in earnings of affiliate                                                                    |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Loss on asset impairments                                                                          |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  | 3,780               |   |  |                   |  
|Loss on sale of assets, before tax effect                                                          |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Minority interests                                                                                 |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Deferred income taxes                                                                              |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Accounts receivable                                                                                |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Prepaid expenses and other assets                                                                  |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 13                    |   |  |                    |   |  |                   |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Due from subsidiaries                                                                              |  | (1,179          | ) |  | (189               | ) |  | (1,100              | ) |  | (76                | ) |  | (1,257             | ) |  | (1,427             | ) |  | (547               | ) |  | (3,749                | ) |  | 1,226               |   |  | (2,412             | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | 78              |   |  | 20                 |   |  | 11                  |   |  | (1,328             | ) |  | 27                 |   |  | (9                 | ) |  | (11                | ) |  | (18                   | ) |  | 109                 |   |  | (14                | )
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 538             |   |  | 81                 |   |  | 445                 |   |  | 753                |   |  | 105                |   |  | 78                 |   |  | 53                 |   |  | 251                   |   |  | 1,391               |   |  | 362                |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Investing activities:                                                                              |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (538            | ) |  | (158               | ) |  | (445                | ) |  | (753               | ) |  | (105               | ) |  | (78                | ) |  | (53                | ) |  | (251                  | ) |  | (1,391              | ) |  | (362               | )
|Proceeds from sales of assets                                                                      |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (538            | ) |  | (158               | ) |  | (445                | ) |  | (753               | ) |  | (105               | ) |  | (78                | ) |  | (53                | ) |  | (251                  | ) |  | (1,391              | ) |  | (362               | )
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Financing activities:                                                                              |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  |                |   |  | 77                 |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Contributions from partners                                                                        |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  |                |   |  | 77                 |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Effect of exchange rate changes on cash                                                            |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                      |   |  |                    |   |  |                   |  
|                                                                                                   |  |                 |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                       |   |  |                     |   |  |                    |  



62



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|-------------------------------------------------------------------------------------------------- |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------- | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | - |  | ------------------ | -
|                                                                                                   |  | MeriStarSub 2C,LLC |   |  | MeriStarSub 4G,L.P. |   |  | MeriStarSub 3B,LLC |   |  | MeriStarSub 5G,L.P. |   |  | MeriStarSub 5P,LLC |   |  | MeriStarSub 5J,LLC |   |  | MeriStarSub 5Q,LLC |   |  | MeriStarSub 5A,LLC |   |  | MeriStarSub 8D,LLC |   |  | MeriStarSub 4J,LLC |  
|Operating activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net income (loss)                                                                                  |  | (1,248             | ) |  | 809                 |   |  | (12,777            | ) |  | 2,429               |   |  | 589                |   |  | 3,784              |   |  | 1,164              |   |  | 970                |   |  | 651                |   |  | 1,444              |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Depreciation and amortization                                                                      |  | 1,035              |   |  | 921                 |   |  | 921                |   |  | 6,201               |   |  | 3                  |   |  | 3,475              |   |  | 494                |   |  | 1,434              |   |  | 1,267              |   |  | 1,343              |  
|Equity in earnings of affiliate                                                                    |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on asset impairments                                                                          |  |                   |   |  |                    |   |  | 12,724             |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on sale of assets, before tax effect                                                          |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Minority interests                                                                                 |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Amortization of unearned stock based compensation                                                  |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Change in value of interest rate swaps                                                             |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Deferred income taxes                                                                              |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Changes in operating assets and liabilities:                                                       |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Accounts receivable                                                                                |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  | 319                |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  | 45                 |  
|Prepaid expenses and other assets                                                                  |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  | 483                |   |  |                   |   |  |                   |   |  | 1                  |   |  |                   |  
|Due from/to Interstate Hotels & Resorts                                                            |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Due from subsidiaries                                                                              |  | 455                |   |  | (1,606              | ) |  | (338               | ) |  | (7,331              | ) |  | (857               | ) |  | (4,787             | ) |  | (1,192             | ) |  | (2,153             | ) |  | (1,634             | ) |  | (2,529             | )
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  | (17                | ) |  | (16                 | ) |  | 58                 |   |  | 160                 |   |  | (15                | ) |  | 135                |   |  | 79                 |   |  | 67                 |   |  | (46                | ) |  | (72                | )
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) operating activities                                                |  | 225                |   |  | 108                 |   |  | 588                |   |  | 1,459               |   |  | 39                 |   |  | 3,090              |   |  | 545                |   |  | 318                |   |  | 239                |   |  | 231                |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Investing activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Capital expenditures for property and equipment                                                    |  | (358               | ) |  | (108                | ) |  | (588               | ) |  | (1,454              | ) |  | (39                | ) |  | (3,090             | ) |  | (545               | ) |  | (318               | ) |  | (239               | ) |  | (231               | )
|Proceeds from sales of assets                                                                      |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|(Increase) decrease in restricted cash                                                             |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Costs associated with disposition program and other, net                                           |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) investing activities                                                |  | (358               | ) |  | (108                | ) |  | (588               | ) |  | (1,454              | ) |  | (39                | ) |  | (3,090             | ) |  | (545               | ) |  | (318               | ) |  | (239               | ) |  | (231               | )
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Financing activities:                                                                              |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Prepayments on long-term debt                                                                      |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Scheduled payments on long-term debt                                                               |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Proceeds from issuance of long-term debt                                                           |  | 133                |   |  |                    |   |  |                   |   |  | (5                  | ) |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Loans to/from subsidiaries                                                                         |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Contributions from partners                                                                        |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Distributions paid to minority investors                                                           |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net cash provided by (used in) financing activities                                                |  | 133                |   |  |                    |   |  |                   |   |  | (5                  | ) |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Effect of exchange rate changes on cash                                                            |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|Cash and cash equivalents, beginning of year                                                       |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  
|Cash and cash equivalents, end of year                                                             |  |                   |   |  |                    |   |  |                   |   |  |                    |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |   |  |                   |  
|                                                                                                   |  |                    |   |  |                     |   |  |                    |   |  |                     |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |   |  |                    |  



63



---

MeriStar Hospitality Operating Partnership, L.P.

Consolidated Statement of Cash Flows

Year Ended December 31, 2002 (Dollars in thousands)



|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ------------------ |  | ----------------------------- |  | ------------------------- | - |  | -------------------------- | - |  | ------------ | - |  | ----------------- | -------- | -
|                                                                                                   |  | MeristarAcquisitionCompany,LLC |  | MeriStarSub 6I,LLC |  | MeriStarSub 6A,LLC |  | MeriStarSub 6F,LLC |  | MeriStarSub 5I,LLC |  | CapStarCherry HillCompany,LLC |  | MeriStarHotel Lessee,Inc. |   |  | GuarantorSubsidiariesTotal |   |  | Eliminations |   |  | TotalConsolidated |         
|Operating activities:                                                                              |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net income (loss)                                                                                  |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (23,892                   | ) |  | (31,560                    | ) |  | 33,753       |   |  | $                 | (170,819 | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Depreciation and amortization                                                                      |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 4,874                     |   |  | 61,464                     |   |  |             |   |  |                   | 125,365  |  
|Equity in earnings of affiliate                                                                    |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  | (33,753      | ) |  |                   |         |  
|Loss on asset impairments                                                                          |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | 55,152                     |   |  |             |   |  |                   | 78,732   |  
|Loss on sale of assets, before tax effect                                                          |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | 6,390                      |   |  |             |   |  |                   | 21,197   |  
|Loss on fair value of non-hedging derivatives                                                      |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 4,735    |  
|Write down of note receivable with Interstate Hotels & Resorts                                     |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 14,517   |  
|Minority interests                                                                                 |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | (15      | )
|Amortization of unearned stock based compensation                                                  |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 4,543    |  
|Change in value of interest rate swaps                                                             |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | (7,612   | )
|Deferred income taxes                                                                              |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | (128                       | ) |  |             |   |  |                   | (2,271   | )
|Changes in operating assets and liabilities:                                                       |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   |         |  
|Accounts receivable                                                                                |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (1,785                    | ) |  | (1,669                     | ) |  |             |   |  |                   | (9,650   | )
|Prepaid expenses and other assets                                                                  |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (1,485                    | ) |  | (1,032                     | ) |  |             |   |  |                   | (3,401   | )
|Due from/to Interstate Hotels & Resorts                                                            |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 6,613                     |   |  | 6,613                      |   |  |             |   |  |                   | 6,757    |  
|Due from subsidiaries                                                                              |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 4,429                     |   |  | (96,979                    | ) |  |             |   |  |                   |         |  
|Accounts payable, accrued expenses, accrued interest and other liabilities                         |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 14                        |   |  | 99                         |   |  |             |   |  |                   | (4,180   | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net cash provided by (used in) operating activities                                                |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (11,232                   | ) |  | (1,650                     | ) |  |             |   |  |                   | 57,898   |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Investing activities:                                                                              |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Capital expenditures for property and equipment                                                    |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (1,387                    | ) |  | (28,023                    | ) |  |             |   |  |                   | (47,347  | )
|Proceeds from sales of assets                                                                      |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | 17,870                     |   |  |             |   |  |                   | 60,650   |  
|Net payments from (advances to) Interstate Hotels & Resorts                                        |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (775                      | ) |  | (775                       | ) |  |             |   |  |                   | (7,500   | )
|(Increase) decrease in restricted cash                                                             |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 939      |  
|Costs associated with disposition program and other, net                                           |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | (1,118                     | ) |  |             |   |  |                   | (2,476   | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net cash provided by (used in) investing activities                                                |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | (2,162                    | ) |  | (12,046                    | ) |  |             |   |  |                   | 4,266    |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Financing activities:                                                                              |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Prepayments on long-term debt                                                                      |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | (333,000 | )
|Scheduled payments on long-term debt                                                               |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | (19,466  | )
|Proceeds from issuance of long-term debt                                                           |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  | 302                        |   |  |             |   |  |                   | 300,452  |  
|Loans to/from subsidiaries                                                                         |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 15,396                    |   |  | 15,396                     |   |  |             |   |  |                   |         |  
|Contributions from partners                                                                        |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 3,153    |  
|Distributions paid to minority investors                                                           |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | (3,060   | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net cash provided by (used in) financing activities                                                |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 15,396                    |   |  | 15,698                     |   |  |             |   |  |                   | (51,921  | )
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Effect of exchange rate changes on cash                                                            |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  |                          |   |  |                           |   |  |             |   |  |                   | 205      |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 2,002                     |   |  | 2,002                      |   |  |             |   |  |                   | 10,448   |  
|Cash and cash equivalents, beginning of year                                                       |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 16,643                    |   |  | 16,643                     |   |  |             |   |  |                   | 23,441   |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  
|Cash and cash equivalents, end of year                                                             |  |                               |  |                   |  |                   |  |                   |  |                   |  |                              |  | 18,645                    |   |  | 18,645                     |   |  |             |   |  | $                 | 33,889   |  
|                                                                                                   |  |                                |  |                    |  |                    |  |                    |  |                    |  |                               |  |                           |   |  |                            |   |  |              |   |  |                   |          |  



64