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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                 to
 Commission file number 1-14236
 FelCor Lodging Trust Incorporated
  Maryland
    
    75-2541756(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)545 E. John Carpenter Frwy., Suite 1300, Irving, Texas
    
    75062(Address of principal executive offices)
    
    (Zip Code)
 (972) 444-4900
  Name of each exchangeTitle of each class
    
    on which registeredCommon Stock
    
    New York Stock Exchange, Inc.$1.95 Series A Cumulative Convertible Preferred Stock
    
    New York Stock Exchange, Inc.Depositary Shares representing 8% Series C CumulativeRedeemable Preferred Stock
    
    New York Stock Exchange, Inc.
  None
 R £
 £ R
 R £
 £
  £ R £
 £ R
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



FELCOR LODGING TRUST INCORPORATED
 INDEX
 Form 10-KReportItem
No.
    
    PagePART I1. Business
    
    
    21A. Risk Factors
    
    
    101B. Unresolved Staff Comments
    
    
    192. Properties
    
    
    193. Legal Proceedings
    
    
    304. Submission of Matters to a Vote of Security Holders
    
    
    30PART II5. Market for Registrants Common Equity, Related Stockholder Matters and Purchases of Equity
Securities
    
    
    316. Selected Financial Data
    
    
    337. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    357A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    558. Financial Statements and Supplementary Data
    
    
    569. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    569A. Controls and Procedures
    
    
    569B. Other Information
    
    
    57PART III10. Directors and Executive Officers of the Registrant
    
    
    5811. Executive Compensation
    
    
    5812. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    5813. Certain Relationships and Related Transactions
    
    
    5814. Principal Accountant Fees and Services
    
    
    58PART IV15. Exhibits and Financial Statement Schedules
    
    
    59Fifth Supplemental IndentureThird Supplemental IndentureFirst Supplemental IndentureOmnibus AgreementFirst Amendment to Term Credit AgreementSecond Amendment to Term Credit AgreementCredit AgreementFirst Amendment to Credit AgreementSecond Amendment to Credit AgreementSubsidiary GuarantyPurchase and Sale AgreementList of SubsidiariesConsent of PricewaterhouseCoopers LLPCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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PART I
 
 Item 1. Business
       www.sec.gov
  2




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Developments During 2005
      Recent Developments
 Amendment to IHG Management Agreements
      3




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New FelCor
  
    
    The average Hotel EBITDA per room for our 90 core hotels is more than 2.5 times higher
than our non-strategic hotels for the year ended December 31, 2005.
    
    Hotel EBITDA growth for the year ended December 31, 2005, for our 90 core hotels was
15%, as compared to only 1% for our non-strategic hotels.
    
    Hotel EBITDA margins for the year ended December 31, 2005, were 28% for our 90 core
hotels compared to only 17% for our non-strategic hotels.
    
    High return capital projects should provide a boost to our future Hotel EBITDA growth.
 Repositioning
  
    
    The sale of seven hotels previously identified as non-strategic, including five
IHG-managed hotels, one of which was sold in January 2005.
    
    The sale of 25 additional IHG-managed hotels, including the seven hotels sold to HPT in
January 2006.
    
    The sale of three additional hotels not managed by IHG.
    
    Total proceeds from hotel sales are expected to be between $485 and $535 million, which
is in addition to $15 million in proceeds from the sale of three hotels in December 2005,
representing an EBITDA multiple of between 12 and 13 times 2005 Hotel EBITDA.
    
    The Crowne Plaza in San Francisco at Union Square will be converted to another brand by
the end of 2006.
   FelCors Consolidated Portfolio Summary at December 31, 2005
 Consolidated FelCor
    
    Non-Strategic Hotels
    
    New FelCor(a)Hotel count
    
    
    125
    
    
    
    35
    
    
    
    90Room count
    
    
    36,132
    
    
    
    10,595
    
    
    
    25,537Brands (hotel count):Embassy Suites Hotels
    
    
    54
    
    
    
    1
    
    
    
    53Doubletree
    
    
    9
    
    
    
    2
    
    
    
    7Hilton
    
    
    2
    
    
    
    0
    
    
    
    2Sheraton/Westin
    
    
    11
    
    
    
    1
    
    
    
    10Holiday Inn
    
    
    33
    
    
    
    16
    
    
    
    17Crowne Plaza
    
    
    12
    
    
    
    11
    
    
    
    0Other
    
    
    4
    
    
    
    4
    
    
    
    1Total
    
    
    125
    
    
    
    35
    
    
    
    90(a) Assumes the conversion of the Crowne Plaza in San Francisco at Union Square to another brandOperating Statistics
(year ended
December 31, 2005):RevPAR
    
    $
    74
    
    
    $
    51
    
    
    $
    84Hotel EBITDA (in millions)
    
    $
    305
    
    
    $
    42
    
    
    $
    263Hotel EBITDA per room
    
    $

    8,452
    

    
    $
    3,992
    
    $
    10,302Hotel EBITDA margin
    
    
    25.2
    %
    
    
    16.6
    %
    
    
    27.6
    %
 4




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Use of Proceeds/Capitalization
    FelCors IHG-Branded Portfolio
  FelCors IHG-Branded Portfolio Summary (a)
 Core Holiday
    
    Non-StrategicInn Hotels
    
    HotelsHotel count
    
    
    17
    
    
    
    30Rooms count
    
    
    6,300
    
    
    
    9,084Operating Statistics
(year ended December 31, 2005):RevPAR
    
    $
    73.05
    
    
    $
    50.39Hotel EBITDA per room
    
    $
    8,129
    
    
    $
    4,083Hotel EBITDA margin
    
    
    24.2
    %
    
    
    17.1
    %
 
 (a)
    
    Excludes the Crowne Plaza in San Francisco at
Union Square that is to be converted to another brand.  
 5




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Management Changes
  The Industry
      6




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Year Ended December 31,2005
    
    2004
    
    2003
    
    2002
    
    2001Number of FelCor Hotels
    
    
    125
    
    
    
    142
    
    
    
    159
    
    
    
    183
    
    
    
    183Occupancy:FelCor hotels (1)
    
    
    69.3
    %
    
    
    65.5
    %
    
    
    62.4
    %
    
    
    62.1
    %
    
    
    63.9
    %All Upscale U.S. hotels (2)
    
    
    64.7
    
    
    
    63.0
    
    
    
    60.8
    
    
    
    60.8
    
    
    
    60.8All Midprice U.S. hotels (3)
    
    
    61.2
    
    
    
    59.4
    
    
    
    57.2
    
    
    
    56.8
    
    
    
    57.8All U.S. hotels
    
    
    63.1
    
    
    
    61.3
    
    
    
    59.2
    
    
    
    59.0
    
    
    
    59.7ADR:FelCor hotels (1)
    
    $
    107.18
    
    
    $
    99.07
    
    
    $
    94.92
    
    
    $
    96.84
    
    
    $
    102.18All Upscale U.S. hotels (2)
    
    
    99.39
    
    
    
    94.05
    
    
    
    90.55
    
    
    
    90.47
    
    
    
    91.87All Midprice U.S. hotels (3)
    
    
    73.26
    
    
    
    69.81
    
    
    
    67.54
    
    
    
    67.96
    
    
    
    69.76All U.S. hotels
    
    
    90.84
    
    
    
    86.20
    
    
    
    82.92
    
    
    
    82.83
    
    
    
    84.10RevPAR:FelCor hotels (1)
    
    $
    74.29
    
    
    $
    64.91
    
    
    $
    59.19
    
    
    $
    60.16
    
    
    $
    65.34All Upscale U.S. hotels (2)
    
    
    64.35
    
    
    
    59.26
    
    
    
    55.06
    
    
    
    55.02
    
    
    
    55.87All Midprice U.S. hotels (3)
    
    
    44.82
    
    
    
    41.47
    
    
    
    38.60
    
    
    
    38.58
    
    
    
    40.30All U.S. hotels
    
    
    57.34
    
    
    
    52.88
    
    
    
    49.07
    
    
    
    48.87
    
    
    
    50.24
 
 (1)
    
    Information is historical and includes discontinued operations.(2)
    
    This category includes hotels in the upscale price level, defined as hotels with ADRs in
the 70th to 85th percentiles in their respective markets.(3)
    
    This category includes hotels in the midprice level, defined as hotels with ADRs in the
40th to 70th percentiles in their respective markets. Business Strategy
  Sale of Non-Strategic Hotels
   7




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Refined Investment Strategy
  Improving the Competitive Positioning of Our Hotels
  Paydown of Debt
   Strategic Relationships
  8




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
    
    Hilton Hotels Corporation (www.hiltonworldwide.com) is
recognized internationally as a preeminent hospitality
company. Hilton develops, owns, manages or franchises
approximately 2,300 hotels, resorts and vacation ownership
properties. Its portfolio includes many of the worlds best
known and most highly regarded hotel brands, including
Hilton, Hilton Garden Inn, Doubletree, Embassy Suites Hotels,
Conrad, Hampton Inn and Homewood Suites by Hilton, among
others. Subsidiaries of Hilton managed 63 of our hotels at
December 31, 2005. Hilton is a 50% partner in joint ventures
with us in the ownership of 12 hotels and the management of
residential condominiums, and is the holder of a 10% equity
interest in certain of our consolidated subsidiaries owning
six hotels.
    
    InterContinental Hotels Group PLC
(www.ichotelsgroup.com) of the United Kingdom is the worlds
most global hotel company and the largest by number of rooms.
IHG owns, manages, leases or franchises, through various
subsidiaries, more than 3,600 hotels and 539,000 guest rooms
in nearly 100 countries and territories around the world. IHG
owns a portfolio of well recognized and respected hotel
brands including InterContinental Hotels & Resorts, Crowne
Plaza Hotels & Resorts, Holiday Inn, Holiday Inn Express,
Holiday Inn Select, Staybridge Suites, Candlewood Suites, and
also manages the worlds largest hotel loyalty program,
Priority Club Rewards, with more than 27 million members
worldwide. Building on more than 50 years of innovation, IHG
has contributed to a wide-range of industry firsts. Among
these innovations, IHG was the first hotel company to
recognize and reward customer loyalty through a customer
frequency program, Priority Club Rewards, and the first hotel
company to receive reservations via the Internet. At
December 31, 2005, subsidiaries of IHG managed 48 of our
hotels and owned approximately 17% of our outstanding common
stock.In February 2006, IHG sold substantially all of its
holdings of our common stock.
    
    Starwood Hotels & Resorts Worldwide, Inc.
(www.starwoodhotels.com) is one of the leading hotel and
leisure companies in the world with approximately 850
properties with 258,000 rooms in 95 countries. With
internationally renowned brands, Starwood is a fully
integrated owner, operator and franchisor of hotels and
resorts including: St. Regis, The Luxury Collection,
Sheraton, Westin, Four Points by Sheraton and W brands.
Subsidiaries of Starwood managed 11 of our hotels at December
31, 2005. Starwood is a 40% joint venture partner with us in
the ownership of two hotels and a 50% joint venture partner
with us in the ownership of one hotel.
 Competition
  Environmental Matters
   9




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Tax Status
  Employees
   
 Item 1A. Risk Factors
 Certain statements and analyses contained in this Annual Report on Form 10-K , in our 2006
Annual Report to Shareholders, or that may in the future be made by, or be attributable to, us, may
constitute forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and can be identified by the use of forward-looking terminology such as may,
will, expect, anticipate, estimate or continue or the negative thereof or other
variations thereon or comparable terminology. All of such forward-looking statements are based
upon present expectations and assumptions that may or may not actually occur. The following
factors constitute cautionary statements identifying important factors, including material risks
and uncertainties that could cause actual results to differ materially from those reflected in such
forward-looking statements or in our historical results. Each of the following factors, among
others, could adversely affect our ability to meet the current expectations of management.
 Future terrorist activities and United States military involvement in the Middle East and elsewhere
may result in reducing business and leisure travel, which would reduce our revenues.
  10




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Our financial leverage is high.
    
    
    limit our ability to obtain additional financing for working capital,
renovation, redevelopment and rebranding plans, acquisitions, debt service requirements
and other purposes;
    
    require us to agree to additional restrictions and limitations on our
business operations and capital structure to obtain additional financing;
    
    increase our vulnerability to adverse economic and industry conditions,
as well as to fluctuations in interest rates;
    
    require us to dedicate a substantial portion of our cash flow from
operations to payments on our debt, thereby reducing funds available for capital
expenditures, future business opportunities, the payment of dividends or other
purposes;
    
    limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete; and
    
    place us at a competitive disadvantage, compared to our competitors that
have less debt.
  We have restrictive debt covenants that could adversely affect our ability to finance our
operations or engage in other business activities.
  
    
    incur any additional indebtedness if, after giving effect thereto, our
consolidated indebtedness would exceed 60% of our adjusted total assets or our interest
coverage ratio, as defined in the indentures, would be less than 2.0 to 1;
    
    incur any additional secured indebtedness or subsidiary debt if, after
giving effect thereto, our consolidated secured indebtedness and subsidiary debt
exceeds 40% of our adjusted total assets;
    
    make common and preferred distributions;
    
    make investments;
    
    engage in transactions with affiliates;
    
    incur liens;
    
    merge or consolidate with another person;
 11




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
    
    dispose of all or substantially all of our assets; and
    
    permit limitations on the ability of our subsidiaries to make payments to us.
      Future or existing relationships may result in certain of our directors and officers having
interests that conflict with ours.
 Adverse tax consequences to affiliates upon a sale of certain hotels.
 Conflicts of interest.
 We are subject to the risks inherent in the hospitality industry.
 The economic slowdown that ran from 2001 through 2003 had a significant adverse effect on our
RevPAR performance and results of operations. If the current economic recovery does not continue,
the effects on our financial condition could be material.
 12




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Change in RevPARYear Ended December 31,2005
    
    2004
    
    2003All FelCor hotels
    
    +10.8%
    
    +5.0%
    
    3.9%All U.S. hotels
    
    +8.4%
    
    +7.8%
    
    +0.4%
  Investing in hotel assets involves special risks.
 
    
    competition from other hotels;
    
    construction of more hotel rooms in a particular area than needed to meet demand;
    
    the current high cost of, and any further increases in, fuel costs and
other travel expenses, inconveniences and other events that reduce business and leisure
travel;
    
    adverse effects of declines in general and local economic activity;
    
    fluctuations in our revenue caused by the seasonal nature of the hotel industry;
    
    an outbreak of a pandemic disease affecting the travel industry;
    
    a downturn in the hotel industry; and
    
    risks generally associated with the ownership of hotels and real estate, as discussed below.
 We could face increased competition.
 We face reduced coverages and increased costs of insurance.
 We have geographic concentrations that may create risks from regional or local economic,
seismic or weather conditions.
 13




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We had 35 hotels at December 31, 2005, substantially all of which we intend to sell in 2006
and 2007.
 We are subject to possible adverse effects of franchise and license agreement requirements.
  We are subject to the risks of brand concentration.
  % of 2005HotelHotels
    
    EBITDAEmbassy Suites Hotels
    
    
    54
    
    
    
    51
    %Holiday Inn-branded hotels
    
    
    33
    
    
    
    22Sheraton-branded hotels
    
    
    10
    
    
    
    11Doubletree-branded hotels
    
    
    9
    
    
    
    6Crowne Plaza hotels
    
    
    12
    
    
    
    6Other
    
    
    7
    
    
    
    4
  We are subject to the risks of hotel operations.
 
    
    wage and benefit costs;
    
    repair and maintenance expenses;
    
    gas and electricity costs;
    
    insurance costs, including health, general liability and workers compensation; and
    
    other operating expenses.
 14




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The lodging business is seasonal in nature.
 We lack control over the management and operations of our hotels.
 Our ability to grow or sustain our business may be limited by our ability to attract debt or equity
financing, and we may have difficulty accessing capital on attractive terms.
  We own, and may acquire, interests in hotel joint ventures with third parties that expose us to
some risk of additional liabilities or capital requirements.
   15




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As a REIT, we are subject to specific tax laws and regulations, the violation of which could
subject us to significant tax liabilities.
 The federal income tax laws governing REITs are complex.
 Failure to make required distributions would subject us to tax.
 Failure to qualify as a REIT would subject FelCor to federal income tax.
 A sale of assets acquired from Bristol Hotel Company, or Bristol, within ten years after the
merger may result in us incurring corporate income tax. :
 
    
    the amount of gain recognized at the time of the sale; or
    
    the amount of gain that we would have recognized if we had sold the asset
at the time of the Bristol merger for its then fair market value.
  Departure of key personnel would deprive us of the institutional knowledge, expertise and
leadership they provide.
  16




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We are subject to the risks of real estate ownership, which could increase our costs of operations.
 General Risks.
 
    
    adverse changes in general or local economic or real estate market conditions;
    
    changes in zoning laws;
    
    increases in supply or competition;
    
    changes in traffic patterns and neighborhood characteristics;
    
    increases in assessed valuation and real estate tax rates;
    
    increases in the cost of property insurance;
    
    recent and future increases in the cost of wood, steel, concrete and
other building materials, which increase the cost of renovations, expansions and new
construction;
    
    costly governmental regulations and fiscal policies;
    
    the potential for uninsured or underinsured property losses;
    
    the potential that we are unable to meet all requirements under the
Americans with Disabilities Act;
    
    the impact of environmental laws and regulations; and
    
    other circumstances beyond our control.
  Compliance with environmental laws may adversely affect our financial condition.
  Compliance with the Americans with Disabilities Act may adversely affect our financial
condition.
 17




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Our charter contains limitations on ownership and transfer of shares of our stock that could
adversely affect attempted transfers of our capital stock.
  Some provisions in our charter and bylaws and Maryland law make a takeover of us more difficult.
 Ownership Limit.
 Staggered Board
 Authority to Issue Additional Shares.
 Maryland Takeover Statutes.
 18




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
..
   % of 2005 HotelTop Markets
    
    Hotels
    
    Rooms
    
    % of Total Rooms
    
    EBITDA(a)Atlanta
    
    
    10
    
    
    
    3,059
    
    
    
    8
    %
    
    
    9
    %Los Angeles Area
    
    
    6
    
    
    
    1,435
    
    
    
    4
    
    
    
    6Dallas
    
    
    12
    
    
    
    3,585
    
    
    
    10
    
    
    
    5Orlando
    
    
    6
    
    
    
    2,219
    
    
    
    6
    
    
    
    4Boca Raton/Ft. Lauderdale
    
    
    4
    
    
    
    1,118
    
    
    
    3
    
    
    
    4San Francisco Bay Area
    
    
    8
    
    
    
    2,690
    
    
    
    7
    
    
    
    4Minneapolis
    
    
    4
    
    
    
    955
    
    
    
    3
    
    
    
    4New Orleans
    
    
    2
    
    
    
    746
    
    
    
    2
    
    
    
    3Phoenix
    
    
    3
    
    
    
    798
    
    
    
    2
    
    
    
    3Philadelphia
    
    
    3
    
    
    
    1,174
    
    
    
    3
    
    
    
    3Chicago
    
    
    4
    
    
    
    1,239
    
    
    
    3
    
    
    
    3Washington, D.C.
    
    
    1
    
    
    
    437
    
    
    
    1
    
    
    
    3San Diego
    
    
    1
    
    
    
    600
    
    
    
    2
    
    
    
    3San Antonio
    
    
    4
    
    
    
    1,188
    
    
    
    3
    
    
    
    3Northern New Jersey
    
    
    3
    
    
    
    757
    
    
    
    2
    
    
    
    3Houston
    
    
    4
    
    
    
    1,403
    
    
    
    4
    
    
    
    3Top Four StatesCalifornia
    
    
    19
    
    
    
    5,536
    
    
    
    15
    
    
    
    17Texas
    
    
    25
    
    
    
    7,343
    
    
    
    20
    
    
    
    13Florida
    
    
    15
    
    
    
    4,937
    
    
    
    14
    
    
    
    13Georgia
    
    
    12
    
    
    
    3,413
    
    
    
    9
    
    
    
    10LocationSuburban
    
    
    55
    
    
    
    13,860
    
    
    
    38
    
    
    
    39Urban
    
    
    30
    
    
    
    9,799
    
    
    
    27
    
    
    
    26Airport
    
    
    26
    
    
    
    8,181
    
    
    
    23
    
    
    
    22Resort
    
    
    13
    
    
    
    4,044
    
    
    
    11
    
    
    
    13Highway
    
    
    1
    
    
    
    248
    
    
    
    1
    
    
    
    0SegmentUpscale all-suite
    
    
    66
    
    
    
    16,332
    
    
    
    45
    
    
    
    58Full service
    
    
    34
    
    
    
    11,519
    
    
    
    32
    
    
    
    22Upscale
    
    
    23
    
    
    
    7,843
    
    
    
    22
    
    
    
    19Limited service
    
    
    2
    
    
    
    438
    
    
    
    1
    
    
    
    1Core Hotels
    
    
    90
    
    
    
    25,537
    
    
    
    71
    
    
    
    87Non-Strategic Hotels
    
    
    35
    
    
    
    10,595
    
    
    
    29
    
    
    
    13
 
 (a)
    
    A detailed description and computation of Hotel EBITDA is contained in the
Non-GAAP Financial Measures section of Managements Discussion and Analysis of
Financial Condition and Results of Operations in Item 7 of this Annual Report on Form
10-K. 19




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##### Table of Contents



Hotel Brands
  Brand Distribution
 % of
    
    % of 2005Brand
    
    Hotels
    
    Rooms
    
    Total Rooms
    
    Hotel EBITDAEmbassy Suites Hotels
    
    
    54
    
    
    
    13,653
    
    
    
    38
    %
    
    
    51
    %Holiday Inn-branded
    
    
    33
    
    
    
    11,356
    
    
    
    31
    
    
    
    22Sheraton-branded
    
    
    10
    
    
    
    3,269
    
    
    
    9
    
    
    
    11Doubletree-branded
    
    
    9
    
    
    
    2,019
    
    
    
    6
    
    
    
    6Crowne Plaza(a)
    
    
    12
    
    
    
    4,025
    
    
    
    11
    
    
    
    6Other
    
    
    7
    
    
    
    1,810
    
    
    
    5
    
    
    
    4
 
 (a)
    
    Five of these hotels were sold subsequent to December 31, 2005, six have been
identified for sale and one is scheduled for conversion to another brand. 20




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Hotel Operating Statistics
  Operating Statistics by Brand (a)
 Occupancy (%)Year Ended December 31,2005
    
    2004
    
    % VarianceEmbassy Suites Hotels
    
    
    73.2
    
    
    
    69.9
    
    
    
    4.7Holiday Inn-branded hotels
    
    
    68.2
    
    
    
    65.7
    
    
    
    3.7Sheraton-branded hotels
    
    
    64.3
    
    
    
    63.0
    
    
    
    2.0Doubletree-branded hotels
    
    
    68.3
    
    
    
    65.7
    
    
    
    4.1Crowne Plaza hotels
    
    
    67.9
    
    
    
    63.4
    
    
    
    7.0Other hotels
    
    
    60.3
    
    
    
    57.9
    
    
    
    4.0Total hotels
    
    
    69.3
    
    
    
    66.4
    
    
    
    4.4
 ADR ($)Year Ended December 31,2005
    
    2004
    
    % VarianceEmbassy Suites Hotels
    
    
    122.84
    
    
    
    117.48
    
    
    
    4.6Holiday Inn-branded hotels
    
    
    89.07
    
    
    
    83.25
    
    
    
    7.0Sheraton-branded hotels
    
    
    109.88
    
    
    
    98.38
    
    
    
    11.7Doubletree-branded hotels
    
    
    111.78
    
    
    
    105.39
    
    
    
    6.1Crowne Plaza hotels
    
    
    100.03
    
    
    
    93.83
    
    
    
    6.6Other hotels
    
    
    97.94
    
    
    
    91.79
    
    
    
    6.7Total hotels
    
    
    107.18
    
    
    
    100.94
    
    
    
    6.2
 RevPAR ($)Year Ended December 31,2005
    
    2004
    
    % VarianceEmbassy Suites Hotels
    
    
    89.91
    
    
    
    82.11
    
    
    
    9.5Holiday Inn-branded hotels
    
    
    60.76
    
    
    
    54.74
    
    
    
    11.0Sheraton-branded hotels
    
    
    70.68
    
    
    
    62.01
    
    
    
    14.0Doubletree-branded hotels
    
    
    76.40
    
    
    
    69.20
    
    
    
    10.4Crowne Plaza hotels
    
    
    67.90
    
    
    
    59.53
    
    
    
    14.1Other hotels
    
    
    59.03
    
    
    
    53.18
    
    
    
    11.0Total hotels
    
    
    74.29
    
    
    
    67.03
    
    
    
    10.8
 
 (a)
    
    Hotels have been excluded in both the current and prior year for those
months directly impacted by hurricanes. 21




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##### Table of Contents



Operating Statistics for Our Top Markets (a)
 Occupancy (%)Year Ended December 31,2005
    
    2004
    
    % VarianceAtlanta
    
    
    72.8
    
    
    
    68.5
    
    
    
    6.3Dallas
    
    
    53.4
    
    
    
    49.9
    
    
    
    7.2Los Angeles Area
    
    
    74.0
    
    
    
    71.5
    
    
    
    3.5Orlando
    
    
    73.0
    
    
    
    76.1
    
    
    
    (4.1
    )Boca Raton/Ft. Lauderdale
    
    
    77.1
    
    
    
    78.6
    
    
    
    (2.0
    )Minneapolis
    
    
    70.7
    
    
    
    68.0
    
    
    
    4.1Philadelphia
    
    
    71.6
    
    
    
    68.0
    
    
    
    5.4San Diego
    
    
    81.6
    
    
    
    80.9
    
    
    
    0.8Phoenix
    
    
    72.4
    
    
    
    69.7
    
    
    
    4.0San Antonio
    
    
    75.5
    
    
    
    70.0
    
    
    
    7.9Northern New Jersey
    
    
    70.3
    
    
    
    66.9
    
    
    
    5.0Chicago
    
    
    73.0
    
    
    
    69.7
    
    
    
    4.6San Francisco Bay Area
    
    
    71.2
    
    
    
    65.3
    
    
    
    9.1Houston
    
    
    72.4
    
    
    
    67.5
    
    
    
    7.2Washington, D.C.
    
    
    74.3
    
    
    
    73.3
    
    
    
    1.4
 ADR ($)Year Ended December 31,2005
    
    
    2004
    
    
    % VarianceAtlanta
    
    
    92.51
    
    
    
    86.93
    
    
    
    6.4Dallas
    
    
    95.31
    
    
    
    90.98
    
    
    
    4.8Los Angeles Area
    
    
    118.05
    
    
    
    110.30
    
    
    
    7.0Orlando
    
    
    85.06
    
    
    
    77.32
    
    
    
    10.0Boca Raton/Ft. Lauderdale
    
    
    129.89
    
    
    
    113.85
    
    
    
    14.1Minneapolis
    
    
    128.32
    
    
    
    125.48
    
    
    
    2.3Philadelphia
    
    
    118.52
    
    
    
    105.99
    
    
    
    11.8San Diego
    
    
    128.47
    
    
    
    120.16
    
    
    
    6.9Phoenix
    
    
    121.78
    
    
    
    113.38
    
    
    
    7.4San Antonio
    
    
    87.82
    
    
    
    84.01
    
    
    
    4.5Northern New Jersey
    
    
    138.67
    
    
    
    135.32
    
    
    
    2.5Chicago
    
    
    116.18
    
    
    
    106.44
    
    
    
    9.1San Francisco Bay Area
    
    
    115.72
    
    
    
    112.44
    
    
    
    2.9Houston
    
    
    74.31
    
    
    
    68.87
    
    
    
    7.9Washington, D.C.
    
    
    145.47
    
    
    
    125.57
    
    
    
    15.8
 RevPAR ($)Year Ended December 31,2005
    
    
    2004
    
    
    % VarianceAtlanta
    
    
    67.33
    
    
    
    59.50
    
    
    
    13.2Dallas
    
    
    50.93
    
    
    
    45.36
    
    
    
    12.3Los Angeles Area
    
    
    87.32
    
    
    
    78.84
    
    
    
    10.8Orlando
    
    
    62.10
    
    
    
    58.85
    
    
    
    5.5Boca Raton/Ft. Lauderdale
    
    
    100.13
    
    
    
    89.52
    
    
    
    11.8Minneapolis
    
    
    90.77
    
    
    
    85.30
    
    
    
    6.4Philadelphia
    
    
    84.90
    
    
    
    72.07
    
    
    
    17.8San Diego
    
    
    104.86
    
    
    
    97.26
    
    
    
    7.8Phoenix
    
    
    88.21
    
    
    
    78.97
    
    
    
    11.7San Antonio
    
    
    66.29
    
    
    
    58.79
    
    
    
    12.8Northern New Jersey
    
    
    97.47
    
    
    
    90.58
    
    
    
    7.6Chicago
    
    
    84.75
    
    
    
    74.22
    
    
    
    14.2San Francisco Bay Area
    
    
    82.40
    
    
    
    73.39
    
    
    
    12.3Houston
    
    
    53.81
    
    
    
    46.52
    
    
    
    15.7Washington, D.C.
    
    
    108.09
    
    
    
    91.99
    
    
    
    17.5
 
 (a)
    
    Hotels have been excluded in both the current and prior year for those
months directly impacted by hurricanes. 22




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##### Table of Contents



Embassy Suites Hotels
  
    
    spacious two-room suites featuring a separate living area, private bedroom and a mini-kitchen;
    
    two remote-controlled televisions, two telephones with voice mail and data ports, iron and ironing board,
refrigerator, microwave oven, wet bar, and coffee maker in every suite;
    
    complimentary, full cooked-to-order breakfast every morning;
    
    complimentary beverages at two-hour managers receptions each evening, subject to local laws and
regulations, in an atrium environment; and
    
    business centers equipped with fax and copy machines.
Doubletree and Doubletree Guest Suites Hotels
  Holiday Inn Branded Hotels
   Crowne Plaza Hotels
  Sheraton and Sheraton Suites
  23




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##### Table of Contents



Other Hotels
  
    
    Hampton Inn (2 hotels);
    
    Harvey Suites (1 hotel);
    
    Hilton Hotel (1 hotel);
    
    Hilton Suites (1 hotel);
    
    Staybridge Suites (1 hotel); and
    
    Westin (1 hotel).
 24




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##### Table of Contents



Hotel Portfolio
  State
    
    Rooms
    
    % Owned(a)
    
    BrandConsolidated Continuing Operations
Core HotelsBirmingham(b)
    
    AL
    
    
    242
    
    
    
    
    
    
    Embassy Suites HotelPhoenix  Biltmore(b)
    
    AZ
    
    
    232
    
    
    
    
    
    
    Embassy Suites HotelPhoenix Crescent Hotel(b)
    
    AZ
    
    
    342
    
    
    
    
    
    
    SheratonPhoenix Tempe(b)
    
    AZ
    
    
    224
    
    
    
    
    
    
    Embassy Suites HotelDana Point  Doheny Beach
    
    CA
    
    
    195
    
    
    
    
    
    
    Doubletree Guest SuitesLos Angeles  Anaheim (Located near
Disneyland Park)(b)
    
    CA
    
    
    222
    
    
    
    
    
    
    Embassy Suites HotelLos Angeles  Covina/I-10(b)
    
    CA
    
    
    202
    
    
    
    50
    %
    
    Embassy Suites HotelLos Angeles  El Segundo  International Airport 
South
    
    CA
    
    
    349
    
    
    
    97
    %
    
    Embassy Suites HotelMilpitas  Silicon Valley(b)
    
    CA
    
    
    266
    
    
    
    
    
    
    Embassy Suites HotelNapa Valley(b)
    
    CA
    
    
    205
    
    
    
    
    
    
    Embassy Suites HotelOxnard  Mandalay Beach Resort & Conference
Center
    
    CA
    
    
    248
    
    
    
    
    
    
    Embassy Suites HotelPalm Desert  Palm Desert Resort
    
    CA
    
    
    198
    
    
    
    
    
    
    Embassy Suites HotelSan Diego  On the Bay
    
    CA
    
    
    600
    
    
    
    
    
    
    Holiday InnSan Francisco  Burlingame Airport
    
    CA
    
    
    340
    
    
    
    
    
    
    Embassy Suites HotelSan Francisco  South San Francisco Airport(b)
    
    CA
    
    
    312
    
    
    
    
    
    
    Embassy Suites HotelSan Francisco  Fishermans Wharf
    
    CA
    
    
    585
    
    
    
    
    
    
    Holiday InnSan Francisco  Union Square
    
    CA
    
    
    403
    
    
    
    
    
    
    Crowne PlazaSan Rafael  Marin County/Conference Center(b)
    
    CA
    
    
    235
    
    
    
    50
    %
    
    Embassy Suites HotelSanta Barbara  Goleta
    
    CA
    
    
    160
    
    
    
    
    
    
    Holiday InnSanta Monica  Beach at the Pier
    
    CA
    
    
    132
    
    
    
    
    
    
    Holiday InnWilmington(b)
    
    DE
    
    
    244
    
    
    
    90
    %
    
    DoubletreeBoca Raton(b)
    
    FL
    
    
    263
    
    
    
    
    
    
    Embassy Suites HotelCocoa Beach  Oceanfront
    
    FL
    
    
    500
    
    
    
    
    
    
    Holiday InnDeerfield Beach  Boca Raton/Deerfield Beach
Resort(b)
    
    FL
    
    
    244
    
    
    
    
    
    
    Embassy Suites HotelFt. Lauderdale  17th Street(b)
    
    FL
    
    
    358
    
    
    
    
    
    
    Embassy Suites HotelFt. Lauderdale  Cypress Creek(b)
    
    FL
    
    
    253
    
    
    
    
    
    
    Sheraton SuitesJacksonville  Baymeadows(b)
    
    FL
    
    
    277
    
    
    
    
    
    
    Embassy Suites HotelMiami  International Airport(b)
    
    FL
    
    
    316
    
    
    
    
    
    
    Embassy Suites HotelOrlando  International Airport(b)
    
    FL
    
    
    288
    
    
    
    
    
    
    Holiday Inn SelectOrlando  International Drive  Resort
    
    FL
    
    
    651
    
    
    
    
    
    
    Holiday InnOrlando  International Drive South/Convention
Center(b)
    
    FL
    
    
    244
    
    
    
    
    
    
    Embassy Suites HotelOrlando (North)
    
    FL
    
    
    277
    
    
    
    
    
    
    Embassy Suites HotelOrlando  Walt Disney World Resort
    
    FL
    
    
    229
    
    
    
    
    
    
    Doubletree Guest SuitesTampa On Tampa Bay(b)
    
    FL
    
    
    203
    
    
    
    
    
    
    Doubletree Guest SuitesAtlanta  Airport(b)
    
    GA
    
    
    232
    
    
    
    
    
    
    Embassy Suites HotelAtlanta  Buckhead(b)
    
    GA
    
    
    317
    
    
    
    
    
    
    Embassy Suites HotelAtlanta  Galleria(b)
    
    GA
    
    
    278
    
    
    
    
    
    
    Sheraton SuitesAtlanta  Gateway  Atlanta Airport
    
    GA
    
    
    395
    
    
    
    
    
    
    SheratonAtlanta  Perimeter Center(b)
    
    GA
    
    
    241
    
    
    
    50
    %
    
    Embassy Suites HotelBrunswick
    
    GA
    
    
    130
    
    
    
    
    
    
    Embassy Suites Hotel
 25




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##### Table of Contents



State
    
    Rooms
    
    % Owned(a)
    
    BrandChicago  Lombard/Oak Brook(b)
    
    IL
    
    
    262
    
    
    
    50
    %
    
    Embassy Suites HotelChicago  Northshore/Deerfield (Northbrook)(b)
    
    IL
    
    
    237
    
    
    
    
    
    
    Embassy Suites HotelChicago OHare Airport(b)
    
    IL
    
    
    297
    
    
    
    
    
    
    Sheraton SuitesIndianapolis  North(b)
    
    IN
    
    
    221
    
    
    
    75
    %
    
    Embassy Suites HotelKansas City  Overland Park(b)
    
    KS
    
    
    199
    
    
    
    50
    %
    
    Embassy Suites HotelLexington(b)
    
    KY
    
    
    155
    
    
    
    
    
    
    Sheraton SuitesLexington  Lexington Green(b)
    
    KY
    
    
    174
    
    
    
    
    
    
    Hilton SuitesBaton Rouge(b)
    
    LA
    
    
    223
    
    
    
    
    
    
    Embassy Suites HotelNew Orleans(b)
    
    LA
    
    
    372
    
    
    
    
    
    
    Embassy Suites HotelNew Orleans  French Quarter
    
    LA
    
    
    374
    
    
    
    
    
    
    Holiday InnBoston  Government Center
    
    MA
    
    
    303
    
    
    
    
    
    
    Holiday Inn SelectBoston  Marlborough(b)
    
    MA
    
    
    229
    
    
    
    
    
    
    Embassy Suites HotelBaltimore  BWI Airport(b)
    
    MD
    
    
    251
    
    
    
    90
    %
    
    Embassy Suites HotelTroy  North (Auburn Hills)(b)
    
    MI
    
    
    251
    
    
    
    90
    %
    
    Embassy Suites HotelBloomington(b)
    
    MN
    
    
    219
    
    
    
    
    
    
    Embassy Suites HotelMinneapolis  Airport(b)
    
    MN
    
    
    310
    
    
    
    
    
    
    Embassy Suites HotelSt. Paul  Downtown(b)
    
    MN
    
    
    210
    
    
    
    
    
    
    Embassy Suites HotelKansas City  Plaza(b)
    
    MO
    
    
    266
    
    
    
    50
    %
    
    Embassy Suites HotelCharlotte(b)
    
    NC
    
    
    274
    
    
    
    50
    %
    
    Embassy Suites HotelCharlotte SouthPark
    
    NC
    
    
    208
    
    
    
    
    
    
    Doubletree Guest SuitesRaleigh(b)
    
    NC
    
    
    203
    
    
    
    
    
    
    Doubletree Guest SuitesRaleigh  Crabtree(b)
    
    NC
    
    
    225
    
    
    
    50
    %
    
    Embassy Suites HotelParsippany(b)
    
    NJ
    
    
    274
    
    
    
    50
    %
    
    Embassy Suites HotelPiscataway  Somerset(b)
    
    NJ
    
    
    222
    
    
    
    
    
    
    Embassy Suites HotelSecaucus  Meadowlands(b)
    
    NJ
    
    
    261
    
    
    
    50
    %
    
    Embassy Suites HotelTulsa  I-44
    
    OK
    
    
    244
    
    
    
    
    
    
    Embassy Suites HotelPhiladelphia  Historic District
    
    PA
    
    
    364
    
    
    
    
    
    
    Holiday InnPhiladelphia  Society Hill(b)
    
    PA
    
    
    365
    
    
    
    
    
    
    SheratonPittsburgh  At University Center (Oakland)(b)
    
    PA
    
    
    251
    
    
    
    
    
    
    Holiday Inn SelectCharleston  Mills House (Historic Downtown)(b)
    
    SC
    
    
    214
    
    
    
    
    
    
    Holiday InnMyrtle Beach  At Kingston Plantation
    
    SC
    
    
    255
    
    
    
    
    
    
    Embassy Suites HotelMyrtle Beach Resort
    
    SC
    
    
    385
    
    
    
    
    
    
    HiltonNashville  Airport/Opryland Area
    
    TN
    
    
    296
    
    
    
    
    
    
    Embassy Suites HotelNashville  Opryland/Airport (Briley Parkway)
    
    TN
    
    
    382
    
    
    
    
    
    
    Holiday Inn SelectAustin(b)
    
    TX
    
    
    189
    
    
    
    90
    %
    
    Doubletree Guest SuitesAustin  North(b)
    
    TX
    
    
    260
    
    
    
    50
    %
    
    Embassy Suites HotelCorpus Christi(b)
    
    TX
    
    
    150
    
    
    
    
    
    
    Embassy Suites HotelDallas  DFW International Airport-South(b)
    
    TX
    
    
    305
    
    
    
    
    
    
    Embassy Suites HotelDallas  Love Field(b)
    
    TX
    
    
    248
    
    
    
    
    
    
    Embassy Suites HotelDallas  Market Center
    
    TX
    
    
    244
    
    
    
    
    
    
    Embassy Suites HotelDallas  Park Central
    
    TX
    
    
    536
    
    
    
    60
    %
    
    WestinDallas  Park Central Area
    
    TX
    
    
    279
    
    
    
    
    
    
    Embassy Suites HotelHouston  Medical Center
    
    TX
    
    
    284
    
    
    
    
    
    
    Holiday Inn & SuitesSan Antonio  International Airport(b)
    
    TX
    
    
    261
    
    
    
    50
    %
    
    Embassy Suites HotelSan Antonio  International Airport(b)
    
    TX
    
    
    397
    
    
    
    
    
    
    Holiday Inn SelectSan Antonio  N.W. I-10(b)
    
    TX
    
    
    216
    
    
    
    50
    %
    
    Embassy Suites HotelBurlington Hotel & Conference Center(b)
    
    VT
    
    
    309
    
    
    
    
    
    
    SheratonVienna  At Tysons Corner(b)
    
    VA
    
    
    437
    
    
    
    50
    %
    
    Sheraton
 26




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##### Table of Contents



State
    
    Rooms
    
    % Owned(a)
    
    BrandCanadaToronto  Airport
    
    Ontario
    
    
    445
    
    
    
    
    
    
    Holiday Inn SelectToronto  Yorkdale
    
    Ontario
    
    
    370
    
    
    
    
    
    
    Holiday InnNon-Strategic HotelsMontgomery  East I-85
    
    AL
    
    
    210
    
    
    
    
    
    
    Holiday InnIrvine  Orange County Airport (Newport Beach)(c)
    
    CA
    
    
    335
    
    
    
    
    
    
    Crowne PlazaMilpitas  San Jose-North (Milpitas  Silicon
Valley)(c)
    
    CA
    
    
    305
    
    
    
    
    
    
    Crowne PlazaPleasanton (San Ramon Area)
    
    CA
    
    
    244
    
    
    
    
    
    
    Crowne PlazaDenver  Aurora(b)
    
    CO
    
    
    248
    
    
    
    90
    %
    
    DoubletreeStamford
    
    CT
    
    
    380
    
    
    
    
    
    
    Holiday Inn SelectMiami  International Airport (LeJeune Center)
    
    FL
    
    
    304
    
    
    
    
    
    
    Crowne PlazaOrlando Nikki Bird (Maingate  Walt Disney
World Area)
    
    FL
    
    
    530
    
    
    
    
    
    
    Holiday InnAtlanta  Airport(c)
    
    GA
    
    
    378
    
    
    
    
    
    
    Crowne PlazaAtlanta  Airport-North
    
    GA
    
    
    493
    
    
    
    
    
    
    Holiday InnAtlanta  Perimeter  Dunwoody
    
    GA
    
    
    250
    
    
    
    
    
    
    Holiday Inn SelectAtlanta  Powers Ferry(c)
    
    GA
    
    
    296
    
    
    
    
    
    
    Crowne PlazaAtlanta  South (I-75 & U.S. 41)
    
    GA
    
    
    180
    
    
    
    
    
    
    Holiday InnColumbus  North (I-185 at Peachtree Mall)
    
    GA
    
    
    224
    
    
    
    
    
    
    Holiday InnChicago  The Allerton
    
    IL
    
    
    443
    
    
    
    
    
    
    Crowne PlazaMinneapolis  Downtown
    
    MN
    
    
    216
    
    
    
    
    
    
    Embassy Suites HotelKansas City  NE I-435 North (At Worlds of Fun)
    
    MO
    
    
    165
    
    
    
    
    
    
    Holiday InnOmaha  Central(c)
    
    NE
    
    
    129
    
    
    
    
    
    
    Hampton InnOmaha  Central (I-80)
    
    NE
    
    
    383
    
    
    
    
    
    
    Holiday InnOmaha  Old Mill
    
    NE
    
    
    223
    
    
    
    
    
    
    Crowne PlazaPhiladelphia  Center City
    
    PA
    
    
    445
    
    
    
    
    
    
    Crowne PlazaKnoxville  Central At Papermill Road
    
    TN
    
    
    240
    
    
    
    
    
    
    Holiday InnAmarillo  I-40
    
    TX
    
    
    248
    
    
    
    
    
    
    Holiday InnAustin  Town Lake (Downtown Area)
    
    TX
    
    
    320
    
    
    
    
    
    
    Holiday InnDallas(c)
    
    TX
    
    
    295
    
    
    
    
    
    
    Crowne Plaza SuitesDallas  At Campbell Centre
    
    TX
    
    
    300
    
    
    
    90
    %
    
    DoubletreeDallas  DFW International Airport-North
    
    TX
    
    
    164
    
    
    
    
    
    
    Harvey SuitesDallas  Market Center
    
    TX
    
    
    354
    
    
    
    
    
    
    Crowne PlazaDallas  Park Central
    
    TX
    
    
    438
    
    
    
    60
    %
    
    SheratonDallas  Park Central(c)
    
    TX
    
    
    114
    
    
    
    
    
    
    Staybridge SuitesDallas  West End/Convention Center
    
    TX
    
    
    309
    
    
    
    
    
    
    Hampton InnHouston  Greenway Plaza Area
    
    TX
    
    
    355
    
    
    
    
    
    
    Holiday Inn SelectHouston  I-10 West & Hwy. 6 (Park 10 Area)(c)
    
    TX
    
    
    349
    
    
    
    
    
    
    Holiday Inn SelectHouston  Intercontinental Airport
    
    TX
    
    
    415
    
    
    
    
    
    
    Holiday InnSan Antonio  Downtown (Market Square)
    
    TX
    
    
    314
    
    
    
    
    
    
    Holiday InnUnconsolidated OperationsHays(b)
    
    KS
    
    
    114
    
    
    
    50
    %
    
    Hampton InnHays(b)
    
    KS
    
    
    191
    
    
    
    50
    %
    
    Holiday InnSalina(b)
    
    KS
    
    
    192
    
    
    
    50
    %
    
    Holiday InnSalina  I-70(b)
    
    KS
    
    
    93
    
    
    
    50
    %
    
    Holiday Inn Express & SuitesNew Orleans  Chateau LeMoyne (In French
Quarter/Historic Area)(b)
    
    LA
    
    
    171
    
    
    
    50
    %
    
    Holiday Inn
 
 (a)
    
    We own 100% of the real estate interests unless otherwise noted.(b)
    
    This hotel is encumbered by mortgage debt or capital lease obligation.(c)
    
    This hotel was sold in January 2006. 27




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##### Table of Contents



Management Agreements
  Management Fees and Performance Standards.
 
    
    Embassy Suites Hotels (54 hotels)  2% of the hotels total revenue per month;
    
    Sheraton  Westin (11 hotels)  2% of the hotels total revenue per month; and
    
    Doubletree (9 hotels)  between 2% and 3% of the hotels total revenue per month.
   Management Fees Paid DuringYear Ended December 31,Brand
    
    2005
    
    
    2004
    
    
    2003Holiday Inn
    
    $
    18,799
    
    
    $
    16,931
    
    
    $
    16,086Crowne Plaza
    
    
    7,571
    
    
    
    6,695
    
    
    
    6,366Embassy Suites
    
    
    10,199
    
    
    
    9,617
    
    
    
    9,815Sheraton  Westin
    
    
    4,877
    
    
    
    4,721
    
    
    
    4,243Doubletree
    
    
    1,933
    
    
    
    1,770
    
    
    
    1,707Other
    
    
    77
    
    
    
    738
    
    
    
    940Total
    
    $
    43,456
    
    
    $
    40,472
    
    
    $
    39,157
 Term and Termination.
 Number of Management Agreements Expiring inBrand
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterEmbassy Suites
    
    
    19
    
    
    
    9
    
    
    
    4
    
    
    
    11
    
    
    
    9
    
    
    
    2Sheraton  Westin
    
    
    0
    
    
    
    0
    
    
    
    1
    
    
    
    0
    
    
    
    0
    
    
    
    10Doubletree
    
    
    0
    
    
    
    3
    
    
    
    2
    
    
    
    0
    
    
    
    0
    
    
    
    4Holiday Inn
    
    
    0
    
    
    
    16
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    17Crowne Plaza
    
    
    0
    
    
    
    12
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Other
    
    1
    
    3
    
    0
    
    0
    
    0
    
    2Total
    
    20
    
    43
    
    7
    
    11
    
    9
    
    35
 28




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##### Table of Contents



Assignment.
 Franchise Agreements
    License Fees Paid DuringYear Ended December 31,Brand
    
    2005
    
    
    2004
    
    
    2003Embassy Suites Hotels
    
    $
    17,400
    
    
    $
    16,340
    
    
    $
    15,658Other
    
    
    492
    
    
    
    493
    
    
    
    529Total
    
    $
    17,892
    
    
    $
    16,833
    
    
    $
    16,187
  Number of Franchise Agreements Expiring inBrand
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterEmbassy Suites Hotels
    
    
    0
    
    
    
    7
    
    
    
    1
    
    
    
    4
    
    
    
    1
    
    
    
    41Other(1)
    
    2
    
    0
    
    0
    
    0
    
    0
    
    1Total
    
    2
    
    7
    
    1
    
    4
    
    1
    
    42
 
 (1)
    
    Included in Other are the following brands: Hampton Inn (2 hotels); and Hilton
Suites (1 hotel). 29




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##### Table of Contents



Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  30




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##### Table of Contents



PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Purchases
of Equity Securities
 Market Information
  High
    
    Low2005First quarter
    
    $
    14.99
    
    
    $
    12.20Second quarter
    
    
    14.75
    
    
    
    11.78Third quarter
    
    
    16.40
    
    
    
    14.20Fourth quarter
    
    
    17.59
    
    
    
    13.272004First quarter
    
    $
    12.60
    
    
    $
    9.92Second quarter
    
    
    12.30
    
    
    
    9.50Third quarter
    
    
    12.35
    
    
    
    10.50Fourth quarter
    
    
    14.97
    
    
    
    10.92
 Stockholder Information
  IN ORDER TO COMPLY WITH CERTAIN REQUIREMENTS RELATED TO OUR QUALIFICATION AS A REIT, OUR
CHARTER LIMITS, SUBJECT TO CERTAIN EXCEPTIONS, THE NUMBER OF SHARES OF COMMON STOCK THAT MAY BE
OWNED BY ANY SINGLE PERSON OR AFFILIATED GROUP TO 9.9% OF THE OUTSTANDING COMMON STOCK.
 Distribution Information
   31




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##### Table of Contents



Issuances of Unregistered Securities
  Equity Compensation Plan Information
  Equity Compensation Plan Information
 Number of shares to beissued upon
    
    Weighted averageexercise of
    
    exercise price of
    
    Number of sharesoutstanding options,
    
    outstanding options,
    
    remaining availablePlan category
    
    warrants and rights
    
    warrants and rights
    
    for future issuanceEquity compensation
plans approved by security
holders:Stock Options
    
    
    1,465,257
    
    
    $
    23.41Unvested Restricted Stock
    
    
    753,468Total
    
    
    2,218,725
    
    
    
    
    
    
    
    990,138
 32




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##### Table of Contents



Item 6. Selected Financial Data
  SELECTED FINANCIAL DATA
(in thousands, except per share data)
 Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002(1)
    
    
    2001Statement of Operations Data:(2)Total revenues
    
    $
    1,212,179
    
    
    $
    1,115,874
    
    
    $
    1,048,364
    
    
    $
    1,094,002
    
    
    $
    1,026,616Net loss from continuing operations(3)
    
    
    (262,906
    )
    
    
    (81,534
    )
    
    
    (148,326
    )
    
    
    (35,051
    )
    
    
    (50,800
    )Diluted earnings per share:Net loss from continuing operations
applicable to common stockholders
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )
    
    $
    (1.33
    )
    
    $
    (1.43
    )Other Data:Cash distributions declared per common share(4)
    
    $
    0.15
    
    
    $
    
    
    
    $
    
    
    
    $
    0.60
    
    
    $
    1.70Funds From Operations (5)
    
    
    (191,139
    )
    
    
    (30,608
    )
    
    
    (207,462
    )
    
    
    (60,018
    )
    
    
    105,492EBITDA(5)
    
    
    12,475
    
    
    
    184,950
    
    
    
    (532
    )
    
    
    150,024
    
    
    
    353,435Cash flows provided by operating activities
    
    
    111,482
    
    
    
    33,281
    
    
    
    52,914
    
    
    
    106,037
    
    
    
    144,766Balance Sheet Data (at end of period):Total assets
    
    $
    2,919,093
    
    
    $
    3,317,658
    
    
    $
    3,590,893
    
    
    $
    3,780,363
    
    
    $
    4,079,485Total debt, net of discount
    
    
    1,675,280
    
    
    
    1,767,122
    
    
    
    2,037,355
    
    
    
    1,877,134
    
    
    
    1,938,408
 
 (1)
    
    Includes hotel revenue and expenses with respect to 88 hotels that were leased to IHG prior
to July 1, 2001. Prior to acquisition of these leases, our revenues with respect to these 88
hotels were comprised mainly of percentage lease revenues. Accordingly, revenues, expenses
and operating results for the year ended December 31, 2002, are not directly comparable to the
same period in 2001.(2)
    
    All years prior to 2005 have been adjusted to reflect those hotels disposed of in 2005 or
prior as discontinued operations.(3)
    
    Included in net loss from continuing operations are the following amounts (in thousands): Years Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Impairment loss
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )
    
    $
    (3,902
    )
    
    $
    (3,022
    )Minority interest share of
impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770
    
    
    
    
    
    
    
    Charge-off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )
    
    
    (3,222
    )
    
    
    (1,270
    )Loss on early extinguishment of debt
    
    
    (11,921
    )
    
    
    (44,216
    )
    
    
    
    
    
    
    
    
    
    
    Abandoned projects
    
    
    265
    
    
    
    
    
    
    
    
    
    
    
    (1,663
    )
    
    
    (837
    )Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,604
    )Merger termination costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,919
    )Merger related financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,486
    )Gain (loss) on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    
    
    
    
    
    
    
    
    (7,049
    )Gain on sale of assets
    
    
    733
    
    
    
    1,167
    
    
    
    284
    
    
    
    5,861
    
    
    
    2,935
 
 (4)
    
    Commencing with the fourth quarter 2005, we reinstituted a common dividend. We had declared
a quarterly common dividend on our common stock from our inception through 2002, but as a
result of the uncertain geopolitical environment and soft business climate, together with the
decline in margins resulting from continued declines in our portfolios average daily rate,
our board of directors suspended the payment of dividends on our common stock in 2003 and
2004. We have, however, continued to pay the full accrued dividends on our outstanding
preferred stock.(5)
    
    A more detailed description and computation of FFO and EBITDA is contained in the Non-GAAP
Financial Measures section of Managements Discussion and Analysis of Financial Condition and
Results of Operations in Item 7. 33




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##### Table of Contents



Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Impairment loss, continuing operations
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )
    
    $
    (3,902
    )
    
    $
    (3,022
    )Impairment loss, discontinued operations
    
    
    (3,660
    )
    
    
    (34,795
    )
    
    
    (171,349
    )
    
    
    (153,603
    )
    
    
    (3,978
    )Minority interest share of impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770
    
    
    
    
    
    
    
    Charge-off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )
    
    
    (3,222
    )
    
    
    (1,270
    )Gain (loss) on early extinguishment of debt
    
    
    (8,641
    )
    
    
    (44,216
    )
    
    
    1,611
    
    
    
    
    
    
    
    Gain (loss) on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    
    
    
    
    
    
    
    
    (7,049
    )Asset disposition costs
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    
    
    
    
    
    
    
    
    Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    
    
    
    
    (1,663
    )
    
    
    (837
    )Lease acquisition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,604
    )Merger termination costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,919
    )Merger related financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,486
    )Issuance costs of redeemed preferred stock
    
    
    (6,522
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  Years Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Impairment loss, continuing operations
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )
    
    $
    (3,902
    )
    
    $
    (3,022
    )Impairment loss, discontinued operations
    
    
    (3,660
    )
    
    
    (34,795
    )
    
    
    (171,349
    )
    
    
    (153,603
    )
    
    
    (3,978
    )Minority interest share of impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770
    
    
    
    
    
    
    
    Charge-off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )
    
    
    (3,222
    )
    
    
    (1,270
    )Gain (loss) on early extinguishment of debt
    
    
    (8,641
    )
    
    
    (44,216
    )
    
    
    1,611
    
    
    
    
    
    
    
    Gain (loss) on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    
    
    
    
    
    
    
    
    (7,049
    )Asset disposition costs
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    
    
    
    
    
    
    
    
    Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    
    
    
    
    (1,663
    )
    
    
    (837
    )Gain on sale of depreciable assets
    
    
    12,124
    
    
    
    19,422
    
    
    
    2,668
    
    
    
    5,861
    
    
    
    
 34




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
     Financial Comparison (in thousands, except RevPAR, Hotel EBITDA margin and percentage change)
 Years Ended December 31,% Change
    
    
    
    
    
    % Change2005
    
    2004
    
    2005-2004
    
    2003
    
    2004-2003RevPAR
    
    $
    74.29
    
    
    $
    67.03
    
    
    
    10.8
    %
    
    $
    63.81
    
    
    
    5.0
    %Hotel EBITDA(1)
    
    
    305,380
    
    
    
    268,079
    
    
    
    13.9
    %
    
    
    248,725
    
    
    
    7.8
    %Hotel EBITDA margin(1)
    
    
    25.2
    %
    
    
    24.1
    %
    
    
    4.6
    %
    
    
    23.7
    %
    
    
    1.7
    %Net loss from continuing
operations(2)
    
    
    (262,906
    )
    
    
    (81,534
    )
    
    
    222.4
    %
    
    
    (148,326
    )
    
    
    (45.0
    )%Funds From Operations
(FFO)(1) (3)
    
    
    (191,139
    )
    
    
    (30,608
    )
    
    
    524.5
    %
    
    
    (207,462
    )
    
    
    (85.2
    )%Earnings Before Interest, Taxes,
Depreciation and Amortization
(EBITDA)(1) (4)
    
    
    12,475
    
    
    
    184,950
    
    
    
    (93.3
    )%
    
    
    (532
    )
    
    
    (348.7
    )%
 
 (1)
    
    Included in the Financial Comparison are non-GAAP financial measures, including Hotel
EBITDA, Hotel EBITDA margin, FFO and EBITDA. Further discussion and a detailed
reconciliation of these non-GAAP financial measures to our financial statements are found
elsewhere in this Managements Discussion and Analysis of Financial Condition and Results
of Operations. 35




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##### Table of Contents



(2)
    
    Included in net loss from continuing operations are the following amounts (in
thousands): Years Ended December 31,2005
    
    2004
    
    2003Impairment loss
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )Minority interest share of impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770Loss on early extinguishment of debt
    
    
    (11,921
    )
    
    
    (44,216
    )
    
    
    Charge-off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )Abandoned projects
    
    
    265
    
    
    
    
    
    
    
    Gain on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    Gain on sale of assets
    
    
    733
    
    
    
    1,167
    
    
    
    284
 (3)
    
    Consistent with SEC guidance on non-GAAP financial measures, FFO has not been adjusted
for the following amounts included in net loss (in thousands, except per share amounts).
 2005
    
    2004
    
    2003Per Share
    
    
    
    
    
    Per Share
    
    
    
    
    
    Per ShareDollars
    
    Amount
    
    Dollars
    
    Amount
    
    Dollars
    
    AmountImpairment loss, continuing
operations
    
    $
    (263,091
    )
    
    $
    (4.23
    )
    
    $
    (3,494
    )
    
    $
    (0.06
    )
    
    $
    (74,160
    )
    
    $
    (1.20
    )Impairment loss, discontinued
operations
    
    
    (3,660
    )
    
    
    (0.06
    )
    
    
    (34,795
    )
    
    
    (0.56
    )
    
    
    (171,349
    )
    
    
    (2.77
    )Minority interest share
of impairment loss
    
    
    8,976
    
    
    
    0.14
    
    
    
    
    
    
    
    
    
    
    
    1,770
    
    
    
    0.03Charge-off of deferred debt
costs
    
    
    (2,659
    )
    
    
    (0.04
    )
    
    
    (6,960
    )
    
    
    (0.10
    )
    
    
    (2,834
    )
    
    
    (0.05
    )Gain (loss) on early
extinguishment of debt
    
    
    (8,641
    )
    
    
    (0.14
    )
    
    
    (44,216
    )
    
    
    (0.71
    )
    
    
    1,611
    
    
    
    0.03Asset disposition costs
    
    
    (1,300
    )
    
    
    (0.02
    )
    
    
    (4,900
    )
    
    
    (0.08
    )
    
    
    
    
    
    
    Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on swap termination
    
    
    
    
    
    
    
    
    
    
    1,005
    
    
    
    0.02
    
    
    
    
    
    
    
    
 (4)
    
    Consistent with SEC guidance on non-GAAP financial measures, EBITDA has not been
adjusted for the following amounts included in net loss (in thousands).
 Years Ended December 31,2005
    
    2004
    
    2003Impairment loss, continuing operations
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )Impairment loss, discontinued operations
    
    
    (3,660
    )
    
    
    (34,795
    )
    
    
    (171,349
    )Minority interest share of impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770Charge off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )Gain (loss) on early extinguishment of debt
    
    
    (8,641
    )
    
    
    (44,216
    )
    
    
    1,611Gain on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    Asset disposition costs
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    Gain on sale of assets
    
    
    12,124
    
    
    
    19,422
    
    
    
    2,668
 RevPAR and Hotel Operating Margin
  36




---



##### Table of Contents



Sale of Non-Strategic Hotels
      
    
    The sale of seven hotels previously identified as non-strategic, including five
IHG-managed hotels, one of which was sold in January 2006.
    
    The sale of 25 additional IHG-managed hotels, including the seven hotels sold to HPT in
January 2006.
    
    The sale of three additional hotels not managed by IHG.
    
    Total proceeds from hotel sales are expected to be between $485 and $535 million
representing an EBITDA multiple of between 12 and 13 times 2005 Hotel EBITDA.
    
    The Crowne Plaza in San Francisco at Union Square will be converted to another brand by
the end of 2006.
  37




---



##### Table of Contents



Refined Investment Strategy
  Results of Operations
 Comparison of the Years Ended December 31, 2005 and 2004
          38




---



##### Table of Contents



Comparison of the Years Ended December 31, 2004 and 2003
  39




---



##### Table of Contents




    
    We completed the early retirement of $775 million in senior notes:
 o
    
    $600 million of senior notes maturing in 2008 that bore interest at 10%; ando
    
    $175 million of senior notes maturing in October 2004;
 
    
    We issued $290 million of floating rate senior notes;
    
    We issued $234 million in mortgage debt; and
    
    We issued $160 million of convertible preferred stock.
     Non-GAAP Financial Measures
  40




---



##### Table of Contents



Reconciliation of Net Loss to FFO
(in thousands, except per share data)
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Per Share
    
    
    
    
    
    
    
    
    
    
    Per Share
    
    
    
    
    
    
    
    
    
    
    Per ShareDollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    AmountNet loss
    
    $
    (251,615
    )
    
    
    
    
    
    
    
    
    
    $
    (100,127
    )
    
    
    
    
    
    
    
    
    
    $
    (310,144
    )Issuance costs of redeemed
preferred stock
    
    
    (6,522
    )Preferred dividends
    
    
    (39,408
    )
    
    
    
    
    
    
    
    
    
    
    (35,130
    )
    
    
    
    
    
    
    
    
    
    
    (26,908
    )Net loss applicable to common
stockholders
    
    
    (297,545
    )
    
    
    59,436
    
    
    $
    (5.01
    )
    
    
    (135,257
    )
    
    
    59,045
    
    
    $
    (2.29
    )
    
    
    (337,052
    )
    
    
    58,657
    
    
    $
    (5.75
    )Depreciation from continuing
operations
    
    
    119,323
    
    
    
    
    
    
    
    2.01
    
    
    
    111,836
    
    
    
    
    
    
    
    1.89
    
    
    
    116,710
    
    
    
    
    
    
    
    1.99Depreciation from
unconsolidated entities and
discontinued operations
    
    
    12,884
    
    
    
    
    
    
    
    0.22
    
    
    
    18,916
    
    
    
    
    
    
    
    0.32
    
    
    
    33,325
    
    
    
    
    
    
    
    0.57Gain on sale of assets
    
    
    (12,124
    )
    
    
    
    
    
    
    (0.20
    )
    
    
    (19,422
    )
    
    
    
    
    
    
    (0.33
    )
    
    
    (2,668
    )
    
    
    
    
    
    
    (0.05
    )Minority interest in FelCor LP
    
    
    (13,677
    )
    
    
    2,778
    
    
    
    (0.09
    )
    
    
    (6,681
    )
    
    
    2,939
    
    
    $
    (0.08
    )
    
    
    (17,777
    )
    
    
    3,188
    
    
    
    (0.11
    )FFO
    
    $
    (191,139
    )
    
    
    62,214
    
    
    $
    (3.07
    )
    
    $
    (30,608
    )
    
    
    61,984
    
    
    $
    (0.49
    )
    
    $
    (207,462
    )
    
    
    61,845
    
    
    $
    (3.35
    )
 Year Ended December 31,2002
    
    
    2001Per Share
    
    
    
    
    
    
    
    
    
    
    Per ShareDollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    AmountNet loss
    
    $
    (178,581
    )
    
    
    
    
    
    
    
    
    
    $
    (39,276
    )Preferred dividends
    
    
    (26,292
    )
    
    
    
    
    
    
    
    
    
    
    (24,600
    )Net loss applicable to common stockholders
    
    
    (204,873
    )
    
    
    54,173
    
    
    $
    (3.78
    )
    
    
    (63,876
    )
    
    
    52,622
    
    
    $
    (1.21
    )Depreciation from continuing operations
    
    
    123,758
    
    
    
    
    
    
    
    2.28
    
    
    
    131,232
    
    
    
    
    
    
    
    2.49Depreciation from unconsolidated entities
and discontinued operations
    
    
    40,675
    
    
    
    
    
    
    
    0.75
    
    
    
    37,342
    
    
    
    
    
    
    
    0.71Gain on sale of assets
    
    
    (5,861
    )
    
    
    
    
    
    
    (0.11
    )
    
    
    
    
    
    
    
    
    
    
    Preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,662
    
    
    
    4,636
    
    
    
    2.52Stock options and unvested restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404
    
    
    
    Minority interest in FelCor LP
    
    
    (13,717
    )
    
    
    7,564
    
    
    
    (0.11
    )
    
    
    (10,868
    )
    
    
    9,013
    
    
    
    (2.93
    )FFO
    
    $
    (60,018
    )
    
    
    61,737
    
    
    $
    (0.97
    )
    
    $
    105,492
    
    
    
    66,675
    
    
    $
    1.58
 41




---



##### Table of Contents



Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Per
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    ShareDollars
    
    
    Amount
    
    
    Dollars
    
    
    Amount
    
    
    Dollars
    
    
    Amount
    
    
    Dollars
    
    
    Amount
    
    
    Dollars
    
    
    AmountImpairment loss,
continuing operations
    
    $
    (263,091
    )
    
    $
    (4.23
    )
    
    $
    (3,494
    )
    
    $
    (0.06
    )
    
    $
    (74,160
    )
    
    $
    (1.20
    )
    
    $
    (3,902
    )
    
    $
    (0.06
    )
    
    $
    (3,022
    )
    
    $
    (0.05
    )Impairment loss,
discontinued
operations
    
    
    (3,660
    )
    
    
    (0.06
    )
    
    
    (34,795
    )
    
    
    (0.56
    )
    
    
    (171,349
    )
    
    
    (2.77
    )
    
    
    (153,603
    )
    
    
    (2.49
    )
    
    
    (3,978
    )
    
    
    (0.06
    )Minority interest share
of impairment loss
    
    
    8,976
    
    
    
    0.14
    
    
    
    
    
    
    
    
    
    
    
    1,770
    
    
    
    0.03
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Charge-off of deferred
debt costs
    
    
    (2,659
    )
    
    
    (0.04
    )
    
    
    (6,960
    )
    
    
    (0.10
    )
    
    
    (2,834
    )
    
    
    (0.05
    )
    
    
    (3,222
    )
    
    
    (0.05
    )
    
    
    (1,270
    )
    
    
    (0.02
    )Gain (loss) on early
extinguishment of debt
    
    
    (8,641
    )
    
    
    (0.14
    )
    
    
    (44,216
    )
    
    
    (0.71
    )
    
    
    1,611
    
    
    
    0.03
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain from swap
termination
    
    
    
    
    
    
    
    
    
    
    1,005
    
    
    
    0.02
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,049
    )
    
    
    (0.11
    )Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,663
    )
    
    
    (0.03
    )
    
    
    (837
    )
    
    
    (0.01
    )Asset disposition costs
    
    
    (1,300
    )
    
    
    (0.02
    )
    
    
    (4,900
    )
    
    
    (0.08
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,604
    )
    
    
    (0.55
    )Merger termination costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,919
    )
    
    
    (0.30
    )Merger related financing
costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,486
    )
    
    
    (0.08
    )Issuance costs of
redeemed
preferred stock
    
    
    (6,522
    )
    
    
    (0.10
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  Reconciliation of Net Loss to EBITDA
 Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Net loss
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )
    
    $
    (178,581
    )
    
    $
    (39,276
    )Depreciation from continuing operations
    
    
    119,323
    
    
    
    111,836
    
    
    
    116,710
    
    
    
    123,758
    
    
    
    131,232Depreciation from unconsolidated
entities and discontinued operations
    
    
    12,884
    
    
    
    18,916
    
    
    
    33,325
    
    
    
    40,675
    
    
    
    37,342Merger termination costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,919Merger financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,486Lease acquisition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,604Interest expense
    
    
    135,054
    
    
    
    148,430
    
    
    
    165,064
    
    
    
    164,368
    
    
    
    159,221Interest expense from unconsolidated
entities and discontinued operations
    
    
    7,602
    
    
    
    9,631
    
    
    
    10,080
    
    
    
    11,433
    
    
    
    11,682Amortization expense
    
    
    2,904
    
    
    
    2,945
    
    
    
    2,210
    
    
    
    2,088
    
    
    
    2,093Minority interest in FelCor LP
    
    
    (13,677
    )
    
    
    (6,681
    )
    
    
    (17,777
    )
    
    
    (13,717
    )
    
    
    (10,868
    )EBITDA
    
    $
    12,475
    
    
    $
    184,950
    
    
    $
    (532
    )
    
    $
    150,024
    
    
    $
    353,435
 42




---



##### Table of Contents



Year Ended December 31,2005
    
    2004
    
    2003
    
    2002
    
    2001Impairment loss, continuing operations
    
    $
    (263,091
    )
    
    $
    (3,494
    )
    
    $
    (74,160
    )
    
    $
    (3,902
    )
    
    $
    (3,022
    )Impairment loss, discontinued operations
    
    
    (3,660
    )
    
    
    (34,795
    )
    
    
    (171,349
    )
    
    
    (153,603
    )
    
    
    (3,978
    )Minority interest share of impairment loss
    
    
    8,976
    
    
    
    
    
    
    
    1,770
    
    
    
    
    
    
    
    Charge-off of deferred debt costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )
    
    
    (3,222
    )
    
    
    (1,270
    )Gain (loss) on early extinguishment of debt
    
    
    (8,641
    )
    
    
    (44,216
    )
    
    
    1,611
    
    
    
    
    
    
    
    Gain (loss) from swap termination
    
    
    
    
    
    
    1,005
    
    
    
    
    
    
    
    
    
    
    
    (7,049
    )Asset disposition costs
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    
    
    
    
    
    
    
    
    Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    
    
    
    
    (1,663
    )
    
    
    (837
    )Gain on sale of assets
    
    
    12,124
    
    
    
    19,422
    
    
    
    2,668
    
    
    
    5,861
    
    
    
    
 Hotel EBITDA and Hotel EBITDA Margin
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Continuing OperationsTotal revenue
    
    $
    1,212,179
    
    
    $
    1,115,874
    
    
    $
    1,048,364Retail space rental and other revenue
    
    
    (2,049
    )
    
    
    (2,721
    )
    
    
    (1,022
    )Hotel revenue
    
    
    1,210,130
    
    
    
    1,113,153
    
    
    
    1,047,342Hotel operating expenses
    
    
    (904,750
    )
    
    
    (845,074
    )
    
    
    (798,617
    )Hotel EBITDA
    
    $
    305,380
    
    
    $
    268,079
    
    
    $
    248,725Hotel EBITDA margin(1)
    
    
    25.2
    %
    
    
    24.1
    %
    
    
    23.7
    %
 
 (1)
    
    Hotel EBITDA as a percentage of hotel revenue. 43




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##### Table of Contents



Hotel Operating Expense Composition
 Year Ended December 31,2005
    
    
    2004
    
    
    2003Continuing OperationsHotel departmental expenses:Room
    
    $
    253,563
    
    
    $
    238,807
    
    
    $
    219,399Food and beverage
    
    
    135,558
    
    
    
    132,561
    
    
    
    123,736Other operating departments
    
    
    30,356
    
    
    
    29,028
    
    
    
    24,311Other property related costs:Administrative and general
    
    
    115,394
    
    
    
    106,780
    
    
    
    99,876Marketing and advertising
    
    
    103,807
    
    
    
    96,465
    
    
    
    90,881Repairs and maintenance
    
    
    67,359
    
    
    
    62,494
    
    
    
    59,384Energy
    
    
    66,510
    
    
    
    57,848
    
    
    
    53,470Taxes, insurance and lease expense
    
    
    70,855
    
    
    
    63,786
    
    
    
    72,215Total other property related costs
    
    
    843,402
    
    
    
    787,769
    
    
    
    743,272Management and franchise fees
    
    
    61,348
    
    
    
    57,305
    
    
    
    55,345Hotel operating expenses
    
    $
    904,750
    
    
    $
    845,074
    
    
    $
    798,617Reconciliation of total operating expense to hotel operating expense:Total operating expenses
    
    $
    1,094,694
    
    
    $
    1,019,469
    
    
    $
    970,174Unconsolidated taxes, insurance and lease expense
    
    
    5,673
    
    
    
    5,737
    
    
    
    6,846Consolidated hotel lease expense
    
    
    (57,004
    )
    
    
    (51,261
    )
    
    
    (47,460
    )Abandoned projects
    
    
    (265
    )
    
    
    
    
    
    
    Corporate expenses
    
    
    (19,025
    )
    
    
    (17,035
    )
    
    
    (14,233
    )Depreciation
    
    
    (119,323
    )
    
    
    (111,836
    )
    
    
    (116,710
    )Hotel operating expenses
    
    $
    904,750
    
    
    $
    845,074
    
    
    $
    798,617
 Reconciliation of Net Loss to Hotel EBITDA
 Year Ended December 31,Actual
    
    
    Actual
    
    
    Actual2005
    
    
    2004
    
    
    2003Net loss
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )Discontinued operations
    
    
    (11,291
    )
    
    
    18,593
    
    
    
    161,818Equity in income from unconsolidated entities
    
    
    (10,169
    )
    
    
    (17,121
    )
    
    
    (2,370
    )Minority interests
    
    
    (23,813
    )
    
    
    (5,229
    )
    
    
    (10,632
    )Consolidated hotel lease expense
    
    
    57,004
    
    
    
    51,261
    
    
    
    47,460Unconsolidated taxes, insurance and lease expense
    
    
    (5,673
    )
    
    
    (5,737
    )
    
    
    (6,846
    )Interest expense, net
    
    
    130,954
    
    
    
    145,666
    
    
    
    162,808Impairment loss
    
    
    263,091
    
    
    
    3,494
    
    
    
    74,160Hurricane loss
    
    
    6,481
    
    
    
    2,125
    
    
    
    Loss on early extinguishment of debt
    
    
    11,921
    
    
    
    44,216
    
    
    
    Charge-off of deferred financing costs
    
    
    2,659
    
    
    
    6,960
    
    
    
    2,834Gain on swap termination
    
    
    
    
    
    
    (1,005
    )
    
    
    Corporate expenses
    
    
    19,025
    
    
    
    17,035
    
    
    
    14,233Depreciation
    
    
    119,323
    
    
    
    111,836
    
    
    
    116,710Retail space rental and other revenue
    
    
    (2,049
    )
    
    
    (2,721
    )
    
    
    (1,022
    )Abandoned projects
    
    
    265
    
    
    
    
    
    
    
    Gain on sale of assets
    
    
    (733
    )
    
    
    (1,167
    )
    
    
    (284
    )Hotel EBITDA
    
    $
    305,380
    
    
    $
    268,079
    
    
    $
    248,725
 44




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##### Table of Contents



Reconciliation of Ratio of Operating Income to Total Revenues to Hotel EBITDA Margin
 Year Ended December 31,Actual
    
    
    Actual
    
    
    Actual2005
    
    
    2004
    
    
    2003Ratio of operating income to total revenues
    
    
    9.7
    %
    
    
    8.6
    %
    
    
    7.5
    %Retail space rental and other revenue
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    (0.1
    )Unconsolidated taxes, insurance and lease expense
    
    
    (0.4
    )
    
    
    (0.5
    )
    
    
    (0.7
    )Consolidated lease expense
    
    
    4.7
    
    
    
    4.6
    
    
    
    4.5Corporate expenses
    
    
    1.6
    
    
    
    1.5
    
    
    
    1.4Depreciation
    
    
    9.8
    
    
    
    10.1
    
    
    
    11.1Hotel EBITDA margin
    
    
    25.2
    %
    
    
    24.1
    %
    
    
    23.7
    %
  FFO and EBITDA
   Hotel EBITDA and Hotel EBITDA Margin
  45




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##### Table of Contents



Use and Limitations of Non-GAAP Measures
    Liquidity and Capital Resources
   46




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47




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48




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Reconciliation of Estimated Net Income to Estimated FFO and EBITDA
 Full Year 2006 GuidanceLow Guidance
    
    
    High GuidancePer Share
    
    
    
    
    
    
    Per ShareDollars
    
    
    Amount(a)
    
    
    Dollars
    
    
    Amount(a)Net income(b)
    
    $
    23
    
    
    
    
    
    
    $
    30Preferred dividends
    
    
    (39
    )
    
    
    
    
    
    
    (39
    )Net loss applicable to common stockholders(b)
    
    
    (16
    )
    
    $
    (0.27
    )
    
    
    (9
    )
    
    $
    (0.15
    )Depreciation
    
    
    130
    
    
    
    
    
    
    
    130Minority interest in FelCor LP
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )FFO
    
    $
    113
    
    
    $
    1.79
    
    
    $
    120
    
    
    $
    1.90Net income(b)
    
    $
    23
    
    
    
    
    
    
    $
    30Depreciation
    
    
    130
    
    
    
    
    
    
    
    130Minority interest in FelCor LP
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Interest expense
    
    
    126
    
    
    
    
    
    
    
    126Amortization expense
    
    
    4
    
    
    
    
    
    
    
    4EBITDA
    
    $
    282
    
    
    
    
    
    
    $
    289
 
 (a)
    
    Weighted average shares are 59.7 million. Adding minority interest and unvested
restricted stock of 3.4 million shares to weighted average shares, provides the weighted
average shares and units of 63.1 million used to compute FFO per share.(b)
    
    Excludes gains or losses from asset sales and debt extinguishment. 49




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##### Table of Contents



Balance OutstandingEncumbered
    
    
    Interest Rate at
    
    
    Maturity
    
    
    December 31,Hotels
    
    
    December 31, 2005
    
    
    Date
    
    
    2005
    
    
    2004Promissory note
    
    none
    
    
    6.31
    (a)
    
    June 2016
    
    $
    650
    
    
    $
    650Senior unsecured term notes
    
    none
    
    
    7.63
    
    
    Oct. 2007
    
    
    123,358
    
    
    
    122,426Senior unsecured term notes
    
    none
    
    
    9.00
    
    
    June 2011
    
    
    298,660
    
    
    
    298,409Term loan(b)
    
    none
    
    
    5.81
    
    
    Oct. 2006
    
    
    225,000
    
    
    
    Senior unsecured term notes
    
    none
    
    
    8.48
    (c)
    
    June 2011
    
    
    290,000
    
    
    
    290,000Total unsecured debt(d)
    
    
    
    
    
    
    7.89
    
    
    
    
    
    
    
    937,668
    
    
    
    711,485Mortgage debt
    
    9 hotels
    
    
    6.52
    
    
    July 2009-2014
    
    
    104,282
    
    
    
    192,363Mortgage debt
    
    8 hotels
    
    
    6.63
    (e)
    
    May 2006
    
    
    117,913
    
    
    
    144,669Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,316Mortgage debt
    
    7 hotels
    
    
    7.32
    
    
    April 2009
    
    
    127,455
    
    
    
    130,458Mortgage debt
    
    4 hotels
    
    
    7.55
    
    
    June 2009
    
    
    41,912
    
    
    
    67,959Mortgage debt
    
    8 hotels
    
    
    8.70
    
    
    May 2010
    
    
    172,604
    
    
    
    175,504Mortgage debt
    
    7 hotels
    
    
    8.73
    
    
    May 2010
    
    
    133,374
    
    
    
    135,690Mortgage debt
    
    1 hotel
    
    
    6.77
    (a)
    
    August 2008
    
    
    15,500
    
    
    
    15,500Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,521Mortgage debt
    
    1 hotel
    
    
    7.91
    
    
    Dec. 2007
    
    
    10,457
    
    
    
    Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,476Other
    
    1 hotel
    
    
    9.17
    
    
    August 2011
    
    
    5,204
    
    
    
    6,181Construction loan
    
    
    
    
    
    
    6.47
    
    
    Oct. 2007
    
    
    8,911
    
    
    
    Total secured debt(d)
    
    46 hotels
    
    
    7.69
    
    
    
    
    
    
    
    737,612
    
    
    
    1,055,637Total(d)
    
    
    
    
    
    
    7.80
    %
    
    
    
    
    
    $
    1,675,280
    
    
    $
    1,767,122
 
 (a)
    
    Variable interest rate based on LIBOR. The six month LIBOR was 4.58% at December 31,
2005.(b)
    
    This term note was repaid in January 2006.(c)
    
    Variable interest rate based on LIBOR. $100 million of these notes were matched with
interest rate swap agreements that effectively converted the variable interest rate to a
fixed rate.(d)
    
    Interest rates are calculated based on the weighted average outstanding debt at
December 31, 2005.(e)
    
    Variable interest rate based on LIBOR. This debt may be extended at our option for up
to two, one-year periods.   50




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Contractual Obligations
  Less Than
    
    
    1  3
    
    
    4  5
    
    
    AfterTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsDebt (a)
    
    $
    2,182,431
    
    
    $
    468,202
    
    
    $
    390,626
    
    
    $
    609,507
    
    
    $
    714,096Operating leases
    
    
    173,636
    
    
    
    34,996
    
    
    
    25,538
    
    
    
    21,000
    
    
    
    92,102Purchase obligations
    
    
    130,299
    
    
    
    130,299
    
    
    
    
    
    
    
    
    
    
    
    IHG special capital plans(b)
    
    
    50,568
    
    
    
    
    
    
    
    50,568
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    2,536,934
    
    
    $
    633,497
    
    
    $
    466,732
    
    
    $
    630,507
    
    
    $
    806,198
 
 (a)
    
    Our long-term debt consists of both secured and unsecured debt and includes
both principal and interest. Interest expense for variable rate debt was calculated
using the interest rate at December 31, 2005.(b)
    
    As a part of the amendment to the IHG management agreements, we have agreed to
spend, by June 30, 2007, approximately $51 million with regard to special capital plans
on 11 hotels. We are to agree upon special capital plans to be completed by July 2008
with regard to four hotels and January 2011 with regard to two hotels. Off-Balance Sheet Arrangements
     51




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##### Table of Contents



Inflation
  Seasonality
  Critical Accounting Policies and Estimates
    
    
    We are required by GAAP to record an impairment charge when we believe that an
investment in one or more of our hotels has been impaired, such that future
undiscounted cash flows would not recover the book basis, or net book value, of the
investment. We test for impairment when certain events occur, including one or
more of the following: projected cash flows are significantly less than recent
historical cash flows; significant changes in legal factors or actions by a
regulator that could affect the value of our hotels; events that could cause
changes or uncertainty in travel patterns; and a current expectation that, more
likely than not, a hotel will be sold or otherwise disposed of significantly before
the end of its previously estimated useful
 52




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life. In 2005 we identified 28 hotels, in 2004 we identified two hotels, in 2003 we
identified 18 hotels and in 2002 we identified 33 hotels, that we expect to sell.
The shorter probable holding periods related to our decision to sell these hotels
was the primary factor that led to impairment charges on these hotels. As we sell
these hotels, we may recognize additional losses or gains on sale. In the
evaluation of impairment of our hotel assets, and in establishing the impairment
charge, we made many assumptions and estimates on a hotel by hotel basis, which
included the following:
 o
    
    Annual cash flow growth rates for revenues and expenses;o
    
    Holding periods;o
    
    Expected remaining useful lives of assets;o
    
    Estimates in fair values taking into consideration future
cash flows, capitalization rates, discount rates and comparable selling
prices; ando
    
    Future capital expenditures.
 Changes in these estimates, future adverse changes in market conditions or poor
operating results of underlying hotels could result in losses or an inability to
recover the carrying value of the hotels that may not be reflected in the hotels
current carrying value, thereby requiring additional impairment charges in the
future.
    
    We make estimates with respect to contingent liabilities for losses covered by
insurance in accordance with Financial Accounting Standard 5, Accounting for
Contingencies. We record liabilities for self insured losses under our insurance
programs when it becomes probable that an asset has been impaired or a liability
has been incurred at the date of our financial statements and the amount of the
loss can be reasonably estimated. In 2002, we initially became self-insured for
the first $250,000, per occurrence, of our general liability claims with regard to
68 of our hotels. At December 31, 2005, we had 71 of our hotels participating in
this program. We review the adequacy of our reserves for our self-insured claims
on a regular basis. Our reserves are intended to cover the estimated ultimate
uninsured liability for losses with respect to reported and unreported claims
incurred as of the end of each accounting period. These reserves represent
estimates at a given accounting date, generally utilizing projections based on
claims, historical settlement of claims and estimates of future costs to settle
claims. Estimates are also required since there may be reporting lags between the
occurrence of the insured event and the time it is actually reported. Because
establishment of insurance reserves is an inherently uncertain process involving
estimates, currently established reserves may not be sufficient. If our insurance
reserves of $6 million, at December 31, 2005, for general liability losses are
insufficient, we will record an additional expense in future periods. Property and
catastrophic losses are event-driven losses and, as such, until a loss occurs and
the amount of loss can be reasonably estimated, no liability is recorded. We had
recorded no contingent liabilities with regard to property or catastrophic losses
at December 31, 2005.
    
    SFAS 133, Accounting for Derivative Instruments and Hedging Activities as
amended by SFAS 138, Accounting for Certain Derivative Instruments and Certain
Hedging Activities, establishes accounting and reporting standards for derivative
instruments. In accordance with these pronouncements, all of our interest rate
swap agreements outstanding at December 31, 2005, were designated as cash flow
hedges because they are hedging our exposure to the changes in interest payments on
our floating rate debt. These instruments are adjusted to our estimate of their
fair market value through accumulated other comprehensive income within
stockholders equity. We estimate the fair value of our interest rate swaps and
fixed rate debt through the use of a third party valuation. We may use other
methods and assumptions to validate the fair market value. At December 31, 2005,
our estimate of the fair market value of the interest rate swaps was approximately
$2 million and represents the amount that we estimate we would currently receive
upon termination of these instruments, based on current market rates and reasonable
assumptions about relevant future market conditions.
    
    Our Taxable REIT Subsidiaries, or TRSs, have cumulative potential future tax
deductions totaling $419 million. The net deferred income tax asset associated
with these potential future tax deductions was $173 million. We have recorded a
valuation allowance of $133 million
 53




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##### Table of Contents



deferred tax asset related to our TRSs, because
of the uncertainty of realizing the benefit of the deferred tax asset. SFAS 109,
Accounting for Income Taxes, establishes financial accounting and reporting
standards for the effect of income taxes. The objectives of accounting for income
taxes are to recognize the amount of taxes payable or refundable for the current
year and deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in an entitys financial statements or tax
returns. In accordance with SFAS 109, we have considered future taxable income and
ongoing prudent and feasible tax planning strategies in assessing the need for a
valuation allowance. In the event we were to determine that we would be able to
realize all or a portion of our deferred tax assets in the future, an adjustment to
the deferred tax asset would increase operating income in the period such
determination was made.
 Recent Accounting Announcements
    Disclosure Regarding Forward Looking Statements
  
    
    general economic and lodging industry conditions, including the anticipated
continuation of the current recovery in the economy, the realization of anticipated job
growth, the impact of the United States military involvement in the Middle East and
elsewhere, future acts of terrorism, the threat or outbreak of a pandemic disease affecting
the travel industry, the impact on the travel industry of high fuel costs and increased
security precautions, and the impact that the bankruptcy of additional major air carriers
may have on our revenues and receivables;
    
    our overall debt levels and our ability to obtain new financing and service debt;
    
    our inability to retain earnings;
    
    our liquidity and capital expenditures;
    
    our growth strategy and acquisition activities;
    
    our inability to sell the hotels being marketed for sale at anticipated prices; and
    
    competitive conditions in the lodging industry.
 54




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   Expected Maturity Date
at December 31, 2005
(dollars in thousands)
 Fair2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    ValueLiabilitiesFixed rate:Debt
    
    $
    13,726
    
    
    $
    149,737
    
    
    $
    15,695
    
    
    $
    176,560
    
    
    $
    281,843
    
    
    $
    382,727
    
    
    $
    1,020,288
    
    
    $
    987,451Average interest rate
    
    
    7.95
    %
    
    
    7.68
    %
    
    
    7.96
    %
    
    
    7.37
    %
    
    
    8.70
    %
    
    
    8.47
    %
    
    
    8.21
    %Floating rate:Debt
    
    
    342,913
    
    
    
    
    
    
    
    24,411
    
    
    
    
    
    
    
    
    
    
    
    190,650
    
    
    
    557,974
    
    
    
    557,974Average interest rate(a)
    
    
    6.09
    %
    
    
    
    
    
    
    6.66
    %
    
    
    
    
    
    
    
    
    
    
    8.82
    %
    
    
    7.05
    %Interest rate swaps (floating to fixed)(b)Notional amount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    102,222Pay rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.80
    %
    
    
    7.80
    %Receive rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total debt
    
    $
    356,639
    
    
    $
    149,737
    
    
    $
    40,106
    
    
    $
    176,560
    
    
    $
    281,843
    
    
    $
    673,377
    
    
    $
    1,678,262Average interest rate
    
    
    6.16
    %
    
    
    7.68
    %
    
    
    7.17
    %
    
    
    7.37
    %
    
    
    8.70
    %
    
    
    8.47
    %
    
    
    7.80
    %Net discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,982
    )Total debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,675,280
 
 (a)
    
    The average floating rate of interest represents the implied forward rates in the
yield curve at December 31, 2005.(b)
    
    The interest rate swaps in effect during 2005 increased our interest expense by a net
$0.3 million during 2005. The interest rate swaps in effect at December 31, 2005, mature in
2007 but are matched with debt maturing in 2011. 55




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Expected Maturity Date
at December 31, 2004
(dollars in thousands)
 Fair2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    Thereafter
    
    
    Total
    
    
    ValueLiabilitiesFixed rate:Debt
    
    $
    26,927
    
    
    $
    18,025
    
    
    $
    261,783
    
    
    $
    16,977
    
    
    $
    202,231
    
    
    $
    708,478
    
    
    $
    1,234,421
    
    
    $
    1,235,442Average interest rate
    
    
    7.54
    %
    
    
    7.78
    %
    
    
    7.46
    %
    
    
    7.93
    %
    
    
    7.40
    %
    
    
    8.50
    %
    
    
    8.06
    %Floating rate:Debt
    
    
    5,392
    
    
    
    143,018
    
    
    
    2,015
    
    
    
    17,618
    
    
    
    78,537
    
    
    
    190,650
    
    
    
    437,230
    
    
    
    437,230Average interest rate(a)
    
    
    4.50
    %
    
    
    4.62
    %
    
    
    4.20
    %
    
    
    4.77
    %
    
    
    4.24
    %
    
    
    6.86
    %
    
    
    5.53
    %Interest rate swaps (floating to fixed)(b)Notional amount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,067Pay rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.80
    %Receive rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.87
    %Total debt
    
    $
    32,319
    
    
    $
    161,043
    
    
    $
    263,798
    
    
    $
    34,595
    
    
    $
    280,768
    
    
    $
    999,128
    
    
    
    1,771,651Average interest rate
    
    
    7.04
    %
    
    
    4.98
    %
    
    
    7.44
    %
    
    
    6.32
    %
    
    
    6.51
    %
    
    
    8.53
    %
    
    
    7.41
    %Net discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,529
    )Total debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,767,122
 
 (a)
    
    The average floating rate of interest represents the implied forward rates in the
yield curve at December 31, 2004.(b)
    
    The interest rate swaps in effect during 2004 decreased our interest expense by a net $4
million during 2004. The interest rate swaps in effect at December 31, 2004, mature in 2007
but are matched with debt maturing in 2011.  
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
  56




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##### Table of Contents



Changes in Internal Control over Financial Reporting.
  Managements Report on Internal Control over Financial Reporting.
    
 Item 9B. Other Information
  57




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##### Table of Contents



PART III.  OTHER INFORMATION
 
 Item 10. Directors and Executive Officers of the Registrant
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountant Fees and Services
  58




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
          ExhibitNumber
    
    Description of Exhibit4.1
    
    Articles of Amendment and Restatement dated June 22, 1995, amending and restating the
Charter of FelCor Lodging Trust Incorporated (FelCor), as amended or supplemented by
Articles of Merger dated June 23, 1995, Articles Supplementary dated April 30, 1996, Articles
of Amendment dated August 8, 1996, Articles of Amendment dated June 16, 1997, Articles of
Amendment dated October 30, 1997, Articles Supplementary filed May 6, 1998, Articles of Merger
and Articles of Amendment dated July 27, 1998, Certificate of Correction dated March 11, 1999,
Certificate of Correction to the Articles of Merger between FelCor and Bristol Hotel Company,
dated August 30, 1999, Articles Supplementary, dated April 1, 2002, Certificate of Correction,
dated March 29, 2004, to Articles Supplementary filed May 2, 1996, Articles Supplementary
filed April 2, 2004, Articles Supplementary filed August 20, 2004, Articles Supplementary
filed April 6, 2005, and Articles Supplementary filed August 29, 2005 (filed as Exhibit 4.1 to
FelCors Registration Statement on Form S-3 (Registration No. 333-128862) and incorporated
herein by reference).4.2
    
    Bylaws of FelCor, as amended (filed as Exhibit 4.2 to FelCors Registration Statement on Form
S-3 (Registration File No. 333-128862) and incorporated herein by reference).4.3
    
    Form of Share Certificate for Common Stock (filed as Exhibit 4.1 to FelCors Form 10-Q for
the quarter ended June 30, 1996, and incorporated herein by reference).4.4
    
    Form of Share Certificate for $1.95 Series A Cumulative Convertible Preferred Stock (filed as
Exhibit 4.4 to FelCors Form 8-K, dated May 1, 1996, and incorporated herein by reference).4.5
    
    Form of Share Certificate for 8% Series C Cumulative Redeemable Preferred Stock (filed as
Exhibit 4.10.1 to FelCors Form 8-K, dated April 6, 2005, and filed on April 11, 2005, and
incorporated herein by reference).
 59




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit4.6
    
    Deposit Agreement, dated April 7, 2005, between FelCor and SunTrust Bank, as preferred share
depositary (filed as Exhibit 4.11.1 to FelCors Current Report on Form 8-K filed April 11,
2005, and incorporated herein by reference).4.6.1
    
    Supplement and Amendment to Deposit Agreement, dated August 30, 2005, between the Company
and SunTrust Bank, as depositary(filed as Exhibit 4.11.2 to FelCors Current Report on Form
8-K filed April 11, 2005, and incorporated herein by reference).4.7
    
    Form of Depositary Receipt evidencing the Depositary Shares, which represent the 8% Series C
Cumulative Redeemable Preferred Stock (filed as Exhibit 4.12.1 to FelCors Form 8-K, dated
April 6, 2005, and filed on April 11, 2005, and incorporated herein by reference).4.8
    
    Indenture, dated as of October 1, 1997, by and among FelCor Lodging Limited Partnership,
formerly FelCor Suites Limited Partnership (FelCor LP), FelCor, the Subsidiary Guarantors
named therein and SunTrust Bank, Atlanta, Georgia, as Trustee (filed as Exhibit 4.1 to the
Registration Statement on Form S-4 (Registration File No. 333-39595) of FelCor LP and the
other co-registrants named therein and incorporated herein by reference).4.8.1
    
    First Amendment to Indenture, dated as of February 5, 1998, by and among FelCor, FelCor LP,
the Subsidiary Guarantors named therein and SunTrust Bank, Atlanta, Georgia, as Trustee (filed
as Exhibit 4.2 to the Registration Statement on Form S-4 (Registration File No. 333-39595) of
FelCor LP and the other co-registrants named therein and incorporated herein by reference).4.8.2
    
    Second Amendment to Indenture and First Supplemental Indenture, dated as of December 30,
1998, by and among FelCor, FelCor LP, the Subsidiary Guarantors named therein and SunTrust
Bank, as Trustee (filed as Exhibit 4.7.2 to the 1998 10-K and incorporated herein by
reference).4.8.3
    
    Third Amendment to Indenture, dated as of March 30, 1999, by and among FelCor, FelCor LP,
the Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.7.3
to FelCors Form 10-Q for the quarter ended March 31, 1999 (the March 1999 10-Q) and
incorporated herein by reference).4.8.4
    
    Second Supplemental Indenture, dated as of August 1, 2000, by and among FelCor LP, FelCor,
the Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.2.4
to the Registration Statement on Form S-4 (Registration File No. 333-47506) of FelCor LP and
the other co-registrants named therein and incorporated herein by reference).4.8.5
    
    Third Supplemental Indenture, dated as of July 26, 2001, by and among FelCor LP, FelCor, the
Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.2.5 to
the Registration Statement on Form S-4 (Registration File No. 333-63092) of FelCor LP and the
other co-registrants named therein and incorporated herein by reference).4.8.6
    
    Fourth Supplemental Indenture, dated October 1, 2002, by and among FelCor LP, FelCor, the
Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.7.6 to
FelCors Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the 2002
Form 10-K) and incorporated herein by reference).4.8.7*
    
    Fifth Supplemental Indenture, dated as of January 25, 2006, by and among FelCor LP, FelCor,
the Subsidiary Guarantors named therein, the New Subsidiary Guarantor named therein and
SunTrust Bank, as trustee.4.9
    
    Indenture, dated as of June 4, 2001, by and among FelCor LP, FelCor, the Subsidiary
Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.9 to FelCors Form
8-K dated as of June 4, 2001, and filed June 14, 2001, and incorporated herein by reference).
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ExhibitNumber
    
    Description of Exhibit4.9.1
    
    First Supplemental Indenture, dated as of July 26, 2001, by and among FelCor LP, FelCor, the
Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.4.1 to
the Registration Statement on Form S-4 (Registration File No. 333-63092) of FelCor LP and the
other co-registrants named therein and incorporated herein by reference).4.9.2
    
    Second Supplemental Indenture, dated October 1, 2002, by and among FelCor LP, FelCor, the
Subsidiary Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.9.2 to
the 2002 Form 10-K and incorporated herein by reference).4.9.3*
    
    Third Supplemental Indenture, dated as of January 25, 2006, by and among FelCor LP, FelCor,
the Subsidiary Guarantors named therein, the New Subsidiary Guarantors named therein and
SunTrust Bank, as trustee.4.10
    
    Indenture, dated as of May 26, 2004, by and among FelCor LP, FelCor, the Subsidiary
Guarantors named therein and SunTrust Bank, as Trustee (filed as Exhibit 4.5 to the
Registration Statement on Form S-4 (Registration File No. 333-117598) of FelCor LP and the
other co-registrants named therein and incorporated herein by reference).4.10.1*
    
    First Supplemental Indenture, dated as of January 25, 2006, FelCor, FelCor LP, the
Subsidiary Guarantors named therein, the New Subsidiary Guarantors named therein and SunTrust
Bank, as trustee.10.1
    
    Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of
December 31, 2001 (filed as Exhibit 10.1 to FelCors Annual Report on Form 10-K for the fiscal
year ended December 31, 2001 (the 2001 Form 10-K), and incorporated herein by reference.)10.1.1
    
    First Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated April 1, 2002 (filed as Exhibit 10.1.1 to FelCors Form 8-K dated April 1, 2002, and
filed on April 4, 2002, and incorporated herein by reference).10.1.2
    
    Second Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated August 31, 2002 (filed as Exhibit 10.1.2 to the 2002 Form 10-K and incorporated
herein by reference).10.1.3
    
    Third Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated October 1, 2002 (filed as Exhibit 10.1.3 to the 2002 Form 10-K and incorporated
herein by reference).10.1.4
    
    Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated as of July 1, 2003 (filed as Exhibit 10.1.4 to FelCors Form 10-Q for the quarter
ended March 31, 2004, and incorporated herein by reference).10.1.5
    
    Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated as of April 2, 2004 (filed as Exhibit 10.1.5 to FelCors Form 10-Q for the quarter
ended March 31, 2004, and incorporated herein by reference).10.1.6
    
    Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated as of August 23, 2004 (filed as Exhibit 10.1.6 to FelCors Form 8-K dated as of, and
filed on, August 26, 2004, and incorporated herein by reference).10.1.7
    
    Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated as of April 7, 2005, which contains Addendum No. 4 to the Second Amended and
Restated Agreement of Limited Partnership of FelCor Lodging Limited Partnership (filed as
Exhibit 10.1.8 to FelCors Form 8-K, dated April 6, 2006, and filed on April 11, 2005, and
incorporated herein by reference).
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ExhibitNumber
    
    Description of Exhibit10.1.8
    
    Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor
LP, dated as of August 30, 2005 (filed as Exhibit 10.1.9 to FelCors Form 8-K, dated August
29, 2005, and filed September 2, 2005, and incorporated herein by reference).10.2
    
    Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of
InterContinental Hotels, as manager, with respect to FelCors InterContinental Hotels branded
hotels (included as an exhibit to the Leasehold Acquisition Agreement, which was filed as
Exhibit 10.28 to FelCors Form 10-Q for the quarter ended March 31, 2001, and incorporated
herein by reference).10.2.1
    
    Master Amendment to Management Agreements, dated September 17, 2003, by and among FelCor,
FelCor LP, FelCor TRS I, L.L.C., FelCor TRS Holdings, L.P., BHR Operations, L.L.C., BHR
Lodging Tenant Company, BHR Salt Lake Tenant Company, L.L.C., BHR Hotels Finance, Inc., BHR
Dallas Tenant Company, L.P. and BHR Plano Tenant Company, L.P. (filed as Exhibit 10.4.1 to
FelCors Form 10-Q for the quarter ended September 30, 2003, and incorporated herein by
reference).10.2.2*
    
    Omnibus Agreement between FelCor and all its various subsidiaries, controlled entities and
affiliates, and Six Continents Hotels, Inc. and all its various subsidiaries, controlled
entities and affiliates, with respect to FelCors InterContinental Hotels branded hotels.10.3.1
    
    Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of
Hilton Hotels Corporation, as manager, with respect to FelCors Embassy Suites Hotels branded
hotels, including the form of Embassy Suites Hotels License Agreement attached as an exhibit
thereto, effective prior to July 28, 2004 (filed as Exhibit 10.5 to the 2001 Form 10-K and
incorporated herein by reference).10.3.2
    
    Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of
Hilton Hotels Corporation, as manager, with respect to FelCors Embassy Suites Hotels branded
hotels, including the form of Embassy Suites Hotels License Agreement attached as an exhibit
thereto, effective July 28, 2004 (filed as Exhibit 10.3.2 to FelCors Form 10-K for the fiscal
year ended December 31, 2004 (the 2004 Form 10-K and incorporated herein by reference).10.4
    
    Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of
Hilton Hotels Corporation, as manager, with respect to FelCors Doubletree and Doubletree
Guest Suites branded hotels (filed as Exhibit 10.6 to the 2001 Form 10-K and incorporated
herein by reference).10.5
    
    Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of
Starwood Hotels & Resorts, Inc., as manager, with respect to FelCors Sheraton and Westin
branded hotels (filed as Exhibit 10.7 to the 2001 Form 10-K and incorporated herein by
reference).10.6
    
    Executive Employment Agreement, dated effective as of February 1, 2006, between FelCor and
Thomas J. Corcoran, Jr. (filed as Exhibit 10.36 to FelCors Form 8-K, dated February 7, 2006,
and filed on February 13, 2006 and incorporated herein by reference).10.7
    
    Executive Employment Agreement, dated effective as of February 1, 2006, between FelCor and
Richard A. Smith (filed as Exhibit 10.37 to FelCors Form 8-K, dated February 7, 2006, and
filed on February 13, 2006 and incorporated herein by reference).10.8
    
    Form of Severance Agreement for executive officers and certain key employees of FelCor (filed
as Exhibit 10.13 to the 1998 10-K and incorporated herein by reference).10.9
    
    Restricted Stock and Stock Option Plan of FelCor (filed as Exhibit 10.9 to the 1994 10-K/A
and incorporated herein by reference).
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ExhibitNumber
    
    Description of Exhibit10.10
    
    Savings and Investment Plan of FelCor (filed as Exhibit 10.10 to the 2001 Form 10-K and
incorporated herein by reference).10.11
    
    1995 Restricted Stock and Stock Option Plan of FelCor (filed as Exhibit 10.9.2 to FelCors
Annual Report on Form 10-K for the fiscal year ended December 31, 1995, and incorporated
herein by reference).10.12
    
    Non-Qualified Deferred Compensation Plan, as amended and restated July 1999 (filed as
Exhibit 10.9 to the September 1999 10-Q and incorporated herein by reference).10.13
    
    1998 Restricted Stock and Stock Option Plan (filed as Exhibit 4.2 to FelCors Registration
Statement on Form S-8 (Registration File No. 333-66041) and incorporated herein by reference).10.14
    
    2001 Restricted Stock and Stock Option Plan of FelCor (filed as Exhibit 10.14 to the 2002
Form 10-K and incorporated herein by reference).10.15
    
    Second Amended and Restated 1995 Equity Incentive Plan (filed as Exhibit 99.1 to FelCors
Post-Effective Amendment on Form S-3 to Form S-4 Registration Statement (Registration File No.
333-50509) and incorporated herein by reference).10.16
    
    Amended and Restated Stock Option Plan for Non-Employee Directors (filed as Exhibit 99.2 to
FelCors Post-Effective Amendment on Form S-3 to Form S-4 Registration Statement (Registration
File No. 333-50509) and incorporated herein by reference).10.17
    
    Form of Nonstatutory Stock Option Contract under Restricted Stock and Stock Option Plans of
FelCor (filed as Exhibit 10.16 to the 2004 Form 10-K and incorporated herein by reference).10.18
    
    Form of Employee Stock Grant Contract under Restricted Stock and Stock Option Plans of
FelCor (filed as Exhibit 10.17 to the 2004 Form 10-K and incorporated herein by reference).10.19
    
    FelCor Lodging Trust Incorporated 2005 Restricted Stock and Stock Option Plan (filed as
Exhibit 4.4 to FelCors Registration Statement on Form S-8 (Registration File No. 333-126228)
and incorporated herein by reference).10.20
    
    Form of Employee Stock Grant Contract under Restricted Stock and Stock Option Plans of
FelCor applicable to 2005 Grants (filed as Exhibit 10.33 to FelCors Form 8-K dated April 26,
2005, and filed on May 2, 2005, and incorporated herein by reference).10.21
    
    Summary of Annual Compensation Program for Directors of FelCor (filed as Exhibit 10.18 to
the 2004 Form 10-K and incorporated herein by reference).10.22
    
    Summary of 2006 Performance Criteria for Annual Incentive Bonus Award Program (filed as
Exhibit 10.38 to FelCors Form 8-K, dated February 17, 2006, and filed on February 22, 2006
and incorporated herein by reference).10.23.1
    
    Form of Mortgage, Security Agreement and Fixture Filing by and between FelCor/CSS Holdings,
L.P., as Mortgagor, and The Prudential Insurance Company of America, as Mortgagee (filed as
Exhibit 10.23 to the March 1999 10-Q and incorporated herein by reference).10.23.2
    
    Promissory Note, dated April 1, 1999, in the original principal amount of $100,000,000,
made by FelCor/CSS Holdings, Ltd., payable to the order of The Prudential Insurance Company of
America (filed as Exhibit 10.23.1 to FelCors Form 10-Q for the quarter ended June 30, 1999
(the June 1999 10-Q) and incorporated herein by reference).
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ExhibitNumber
    
    Description of Exhibit10.24.1
    
    Form of Deed of Trust, Security Agreement and Fixture Filing, each dated as of May 12,
1999, from FelCor/MM Holdings, L.P., as Borrower, in favor of Fidelity National Title
Insurance Company, as Trustee, and Massachusetts Mutual Life Insurance Company, as
Beneficiary, each covering a separate hotel and securing one of the separate Promissory Notes
described in Exhibit 10.21.2, also executed by FelCor/CSS Holdings, L.P. with respect to the
Embassy Suites Hotel-Anaheim and Embassy Suites Hotel-Deerfield Beach, and by FelCor LP with
respect to the Embassy Suites Hotel-Palm Desert (filed as Exhibit 10.24.2 to the June 1999
10-Q and incorporated herein by reference).10.24.2
    
    Form of six separate Promissory Notes, each dated May 12, 1999, made by FelCor/MM Holdings,
L.P. payable to the order of Massachusetts Mutual Life Insurance Company in the respective
original principal amounts of $12,500,000 (Embassy Suites Hotel-Dallas Market Center),
$14,000,000 (Embassy Suites Hotel-Dallas Love Field), $12,450,000 (Embassy Suites
Hotel-Tempe), $11,550,000 (Embassy Suites Hotel-Anaheim), $8,900,000 (Embassy Suites
Hotel-Palm Desert), $15,600,000 (Embassy Suites Hotel-Deerfield Beach) (filed as Exhibit
10.24.1 to the June 1999 10-Q and incorporated herein by reference).10.25.1
    
    Form Deed of Trust and Security Agreement and Fixture Filing with Assignment of Leases and
Rents, each dated as of April 20, 2000, from FelCor/MM S-7 Holdings, L.P., as Mortgagor, in
favor of Massachusetts Mutual Life Insurance Company and Teachers Insurance and Annuity
Association of America, as Mortgagee, each covering a separate hotel and securing one of the
separate Promissory Notes described in Exhibit 10.22.3 (filed as Exhibit 10.24 to FelCors
Form 10-Q for the quarter ended June 30, 2000 (the June 2000 10-Q) and incorporated herein
by reference).10.25.2
    
    Form of Accommodation Cross-Collateralization Mortgage and Security Agreement, each dated
as of April 20, 2000, executed by FelCor/MM S-7 Holdings, L.P., in favor of Massachusetts
Mutual Life Insurance Company and Teachers Insurance and Annuity Association of America (filed
as Exhibit 10.24.1 to the June 2000 10-Q and incorporated herein by reference).10.25.3
    
    Form of fourteen separate Promissory Notes, each dated April 20, 2000, each made by
FelCor/MM S-7 Holdings, L.P., each separately payable to the order of Massachusetts Mutual
Life Insurance Company and Teachers Insurance and Annuity Association of America,
respectively, in the respective original principal amounts of $13,500,000 (Phoenix (Crescent),
Arizona), $13,500,000 (Phoenix (Crescent), Arizona), $6,500,000 (Cypress Creek/Ft. Lauderdale,
Florida), $6,500,000 (Cypress Creek/Ft. Lauderdale, Florida), $9,000,000 (Atlanta Galleria,
Georgia), $9,000,000 (Atlanta Galleria, Georgia), $12,500,000 (Chicago OHare Airport,
Illinois), $12,500,000 (Chicago OHare Airport, Illinois), $3,500,000 (Lexington, Kentucky),
$3,500,000 (Lexington, Kentucky), $17,000,000 (Philadelphia Society Hill, Philadelphia),
$17,000,000 (Philadelphia Society Hill, Philadelphia), $10,500,000 (South Burlington, Vermont)
and $10,500,000 (South Burlington, Vermont) (filed as Exhibit 10.24.2 to the June 2000 10-Q
and incorporated herein by reference).10.26.1
    
    Form Deed of Trust and Security Agreement, each dated as of May 2, 2000, from each of
FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Deerfield
Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB
New Orleans Hotel, L.L.C., FelCor/CMB Piscataway Hotel, L.L.C., and FelCor/CMB SSF Holdings,
L.P., each as Borrower, in favor of The Chase Manhattan Bank, as Beneficiary, each covering a
separate hotel and securing one of the separate Promissory Notes described in Exhibit 10.23.2
(filed as Exhibit 10.25 to the June 2000 10-Q and incorporated herein by reference).10.26.2
    
    Form of eight separate Promissory Notes, each dated May 2, 2000, made by FelCor/CMB
Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Deerfield Hotel,
L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB New
Orleans Hotel, L.L.C., FelCor/CMB Piscataway Hotel, L.L.C. and
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ExhibitNumber
    
    Description of ExhibitFelCor/CMB SSF Holdings, L.P., each separately payable to the order of The Chase
Manhattan Bank in the respective original principal amounts of $38,250,000 (Atlanta
Buckhead, Georgia), $20,500,000 (Boston Marlborough, Massachusetts), $16,575,000
(Chicago Deerfield, Illinois), $5,338,000 (Corpus Christi, Texas), $25,583,000
(Orlando South, Florida), $32,650,000 (New Orleans, Louisiana), $20,728,000
(Piscataway, New Jersey) and $26,268,000 (South San Francisco, California) (filed as
Exhibit 10.25.1 to the June 2000 10-Q and incorporated herein by reference).10.27.1
    
    Loan Agreement, dated April 24, 2003, by and between FelCor/JPM Hotels, L.L.C., as
borrower, and JPMorgan Chase Bank, as lender, relating to a $115 million loan from lender to
borrower (the Mortgage Loan) (filed as Exhibit 10.28 to FelCors Form 10-Q for the quarter
ended March 31, 2003 (the March 2003 10-Q) and incorporated herein by reference).10.27.2
    
    Form of Mortgage, Deed of Trust and Security Agreement, each dated April 24, 2003, from
FelCor/JPM Hotels, L.L.C., as borrower, and DJONT/JPM Leasing, L.L.C., as lessee, (and, in the
case of the Mortgages with respect to the properties located in the State of Florida, FelCor
LP) in favor of JPMorgan Chase Bank, as lender, each covering a separate hotel and securing
the Mortgage Loan (filed as Exhibit 10.28.1 to the March 2003 10-Q and incorporated herein by
reference).10.27.3
    
    Promissory Note, dated April 24, 2003, made by FelCor/JPM Hotels, L.L.C. payable to the
order of JPMorgan Chase Bank in the original principal amount of $115 million (filed as
Exhibit 10.28.2 to the March 2003 10-Q and incorporated herein by reference).10.28.1
    
    Mezzanine Loan Agreement, dated April 24, 2003, by and between FelCor/JPM Holdings, L.L.C.,
as borrower, and JPMorgan Chase Bank, as lender, relating to a $10 million senior mezzanine
loan from lender to borrower (the Senior Mezzanine Loan) (filed as Exhibit 10.29 to the
March 2003 10-Q and incorporated herein by reference).10.28.2
    
    Pledge and Security Agreement, dated April 24, 2003, from FelCor/JPM Holdings, L.L.C., as
pledgor, in favor of JPMorgan Chase Bank, as lender, securing the Senior Mezzanine Loan (filed
as Exhibit 10.29.1 to the March 2003 10-Q and incorporated herein by reference).10.28.3
    
    Promissory Note, dated April 24, 2003, made by FelCor/JPM Holdings, L.L.C. payable to the
order of JPMorgan Chase Bank in the original principal amount of $10 million (filed as Exhibit
10.29.2 to the March 2003 10-Q and incorporated herein by reference).10.29.1
    
    Junior Mezzanine Loan Agreement, dated April 24, 2003, by and between DJONT/JPM Tenant Co.,
L.L.C., as borrower, and JPMorgan Chase Bank, as lender, relating to a $25 million junior
mezzanine loan from lender to borrower (the Junior Mezzanine Loan) (filed as Exhibit 10.30
to the March 2003 10-Q and incorporated herein by reference).10.29.2
    
    Pledge and Security Agreement, dated April 24, 2003, from DJONT/JPM Tenant Co., L.L.C., as
pledgor, in favor of JPMorgan Chase Bank, as lender, securing the Junior Mezzanine Loan (filed
as Exhibit 10.30.1 to the March 2003 10-Q and incorporated herein by reference).10.29.3
    
    Promissory Note, dated April 24, 2003, made by DJONT/JPM Tenant Co., L.L.C. payable to the
order of JPMorgan Chase Bank in the original principal amount of $25 million (filed as Exhibit
10.30.2 to the March 2003 10-Q and incorporated herein by reference).10.29.4
    
    Security Agreement, dated April 24, 2003, from DJONT/JPM Tenant Co., L.L.C. in favor of
JPMorgan Chase Bank, securing the Junior Mezzanine Loan (filed as Exhibit 10.30.3 to the March
2003 10-Q and incorporated herein by reference).10.30
    
    Termination Agreement, dated July 28, 2004, by and among FCH/DT BWI Hotel, L.L.C., FCH/DT
BWI Holdings, L.P., FelCor Hotel Asset Company, L.L.C., FelCor/JPM Atlanta CP
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ExhibitNumber
    
    Description of ExhibitHotel, L.L.C., FelCor/JPM Atlanta ES Hotel, L.L.C., FelCor/JPM Austin HI Holdings,
L.P., FelCor/JPM Austin Holdings, L.P., FelCor/JPM Boca Raton Hotel, L.L.C.,
FelCor/JPM BWI Hotel, L.L.C., FelCor/JPM Denver Hotel, L.L.C., FelCor/JPM LBV Hotel,
L.L.C., FelCor/JPM Mandalay Hotel, L.L.C., FelCor/JPM Nashville Hotel, L.L.C.,
FelCor/JPM Orlando Hotel, L.L.C., FelCor/JPM Orlando I-Drive Hotel, L.L.C.,
FelCor/JPM Phoenix Hotel, L.L.C., FelCor/JPM Troy Hotel, L.L.C., FelCor/JPM
Wilmington Hotel, L.L.C., BHR Operations, L.L.C., DJONT Leasing, L.L.C., DJONT
Operations, L.L.C., DJONT/JPM Atlanta CP Leasing, L.L.C., DJONT/JPM Atlanta ES
Leasing, L.L.C., DJONT/JPM Austin HI Leasing, L.P., DJONT/JPM Austin Leasing, L.P.,
DJONT/JPM Boca Raton Leasing, L.L.C., DJONT/JPM BWI Leasing, L.L.C., DJONT/JPM
Denver Leasing, L.L.C., DJONT/JPM LBV Leasing, L.L.C., DJONT/JPM Mandalay Leasing,
L.L.C., DJONT/JPM Orlando I-Drive Leasing, L.L.C., DJONT/JPM Orlando Leasing,
L.L.C., DJONT/JPM Phoenix Leasing, L.L.C., DJONT/JPM Troy Leasing, L.L.C., DJONT/JPM
Wilmington Leasing, L.L.C., FCH/DT Leasing, L.L.C., FCH/DT Leasing II, L.L.C.,
FelCor TRS Holdings, L.P., FelCor LP and JPMorgan Chase Bank (filed as Exhibit
10.31.6 to FelCors Form 10-Q for the quarter ended June 30, 2004, and incorporated
herein by reference).10.31.1
    
    Form of Loan Agreement, each dated either May 26, 2004, June 10, 2004 or July 19, 2004,
between JPMorgan Chase Bank, as lender, and each of FelCor/JPM Boca Raton Hotel, L.L.C.,
FelCor/JPM Phoenix Hotel, L.L.C., FelCor/JPM Wilmington Hotel, L.L.C., FelCor/JPM Atlanta ES
Hotel, L.L.C., FelCor/JPM Austin Holdings, L.P., FelCor/JPM Orlando Hotel, L.L.C., FelCor/JPM
Denver Hotel, L.L.C., FelCor/JPM Troy Hotel, L.L.C. and FelCor/JPM BWI Hotel, L.L.C. and
FCH/DT BWI Hotel, L.L.C., as borrowers, and acknowledged and agreed by FelCor LP (filed as
Exhibit 10.34 to FelCors Form 10-Q for the quarter ended June 30, 2004, and incorporated
herein by reference).10.31.2
    
    Form of Mortgage, Renewal Mortgage, Deed of Trust, Deed to Secure Debt, Indemnity Deed of
Trust and Assignment of Leases and Rents, Security Agreement and Fixture Filing, each dated
either May 26, 2004, June 10, 2004 or July 19, 2004, from FelCor/JPM Wilmington Hotel, L.L.C.,
DJONT/JPM Wilmington Leasing, L.L.C., FelCor/JPM Phoenix Hotel, L.L.C., DJONT/JPM Phoenix
Leasing, L.L.C., FelCor/JPM Boca Raton Hotel, L.L.C., DJONT/JPM Boca Raton Leasing, L.L.C.,
FelCor/JPM Atlanta ES Hotel, L.L.C., DJONT/JPM Atlanta ES Leasing, L.L.C., FelCor/JPM Austin
Holdings, L.P., DJONT/JPM Austin Leasing, L.P., FelCor/JPM Orlando Hotel, L.L.C., DJONT/JPM
Orlando Leasing, L.L.C., FelCor/JPM Denver Hotel, L.L.C., DJONT/JPM Denver Leasing, L.L.C.,
FelCor/JPM Troy Hotel, L.L.C., DJONT/JPM Troy Leasing, L.L.C., FCH/DT BWI Holdings, L.P.,
FCH/DT BWI Hotel, L.L.C. and DJONT/JPM BWI Leasing, L.L.C., to, and for the benefit of,
JPMorgan Chase Bank, as mortgagee or beneficiary (filed as Exhibit 10.34.1 to FelCors Form
10-Q for the quarter ended June 30, 2004, and incorporated herein by reference).10.31.3
    
    Form of nine separate Promissory Notes, each dated either May 26, 2004, June 10, 2004 or
July 19, 2004, made by FelCor/JPM Wilmington Hotel, L.L.C., FelCor/JPM Phoenix Hotel, L.L.C.,
FelCor/JPM Boca Raton Hotel, L.L.C., FelCor/JPM Atlanta ES Hotel, L.L.C., FelCor/JPM Austin
Holdings, L.P., FelCor/JPM Orlando Hotel, L.L.C., FelCor/JPM Denver Hotel, L.L.C., FelCor/JPM
Troy Hotel, L.L.C. and FelCor/JPM BWI Hotel, L.L.C., each separately payable to the order of
JPMorgan Chase Bank in the respective original principal amounts of $11,000,000 (Wilmington,
Delaware), $21,368,000 (Phoenix, Arizona), $5,500,000 (Boca Raton, Florida), $13,500,000
(Atlanta, Georgia), $9,616,000 (Austin, Texas), $9,798,000 (Orlando, Florida), $5,000,000
(Aurora, Colorado), $6,900,000 (Troy, Michigan) and $24,120,000 (Linthicum, Maryland) (filed
as Exhibit 10.34.2 to FelCors Form 10-Q for the quarter ended June 30, 2004, and incorporated
herein by reference).10.31.4
    
    Form of Guaranty of Recourse Obligations of Borrower, each dated either May 26, 2004, June
10, 2004 or July 19, 2004, made by FelCor LP in favor of JPMorgan Chase Bank (filed as Exhibit
10.34.3 to FelCors Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by
reference).
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ExhibitNumber
    
    Description of Exhibit10.32.1
    
    Construction Loan Agreement, dated April 27, 2005, among Grande Palms, L.L.C. and Bank of
America, N.A., as Administrative Agent, and the other financial institutions party thereto,
and Bank of America Securities, as Lead Arranger, for a maximum principal loan amount of $69.8
million (filed as Exhibit 10.34.1 of FelCors Form 10-Q for the quarter ended June 30, 2005,
and incorporated herein by reference).10.32.2
    
    Guaranty Agreement, dated April 27, 2005, by FelCor Lodging Limited Partnership in favor of
Bank of America, N.A. on behalf of the lenders(filed as Exhibit 10.34.2 of FelCors Form 10-Q
for the quarter ended June 30, 2005, and incorporated herein by reference).10.32.3
    
    Form of Promissory Note, each dated April 27, 2005, made by Grande Palms, L.L.C., each
separately payable to the order of Bank of America, N.A. ($25 million), Bank of Montreal ($20
million) and The Bank of Nova Scotia ($24.8 million)(filed as Exhibit 10.34.3 of FelCors Form
10-Q for the quarter ended June 30, 2005, and incorporated herein by reference).10.32.4
    
    Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated
April 27, 2005, made by Grande Palms, L.L.C. for the benefit of Bank of America, N.A., as
Administrative Agent under the Construction Loan Agreement referenced in Exhibit 10.34.1
(filed as Exhibit 10.34.4 of FelCors Form 10-Q for the quarter ended June 30, 2005, and
incorporated herein by reference).10.33
    
    Term Credit Agreement, dated as of October 18, 2005, among FelCor TRS Borrower 1, L.P., as
Initial Borrower; FelCor TRS Guarantor, L.P., FelCor LP and the other guarantors named therein
as Guarantors; Citigroup North America, Inc., as Initial Lender, as Administrative Agent, and
as Collateral Agent, and Citigroup Global Markets, Inc., as Sole Lead Arranger and Sole Book
Running Manager, for a maximum principal loan amount of $175 million (filed as Exhibit 10.35
to FelCors Form 10-Q for the quarter ended September 30, 2005, and incorporated herein by
reference).10.33.1*
    
    First Amendment to Term Credit Agreement, dated as of December 9, 2005, among FelCor TRS
Borrower 1, L.P. and FelCor TRS Borrower 2, L.P., as borrowers; FelCor TRS Guarantor, L.P.,
FelCor LP, FelCor Lodging Company, L.L.C., FelCor Philadelphia Center, L.L.C., FelCor Marshall
Motels, L.L.C. and Center City Hotel Associates, as guarantors; Citicorp North America, Inc.,
as the initial Lender, the administrative agent for the lenders and the collateral agent for
the secured parties; and Citigroup Global Markets Inc., as sole lead arranger and sole book
running manager.10.33.2*
    
    Second Amendment to Term Credit Agreement, dated as of January 9, 2006, among FelCor TRS
Borrower 1, L.P. and FelCor TRS Borrower 2, L.P., as borrowers and certain other borrowers
named therein; FelCor TRS Guarantor, L.P., FelCor LP, FelCor Lodging Company, L.L.C., FelCor
Philadelphia Center, L.L.C., FelCor Marshall Motels, L.L.C. and Center City Hotel Associates,
as guarantors; Citicorp North America, Inc., as the initial Lender, the administrative agent
for the lenders and the collateral agent for the secured parties; and Citigroup Global Markets
Inc., as sole lead arranger and sole book running manager.10.34.1*
    
    Credit Agreement, dated as of December 12, 2005, by and among FelCor, FelCor LP, the
lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and J.P. Morgan
Securities, Inc. and Citigroup Global Markets Inc. as joint runners and joint lead arrangers
for an initial aggregate amount of $125,000,000.10.34.1.1*
    
    First Amendment to Credit Agreement, dated as of January 12, 2006, by and among FelCor,
FelCor LP, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
and J.P. Morgan Securities, Inc. and Citigroup Global Markets Inc. as joint runners and joint
lead arrangers.
 67




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.34.1.2*
    
    Second Amendment to Credit
Agreement, dated as of January 25, 2006, by and among FelCor,
FelCor LP, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
and J.P. Morgan Securities, Inc. and Citigroup Global Markets Inc. as joint runners and joint
lead arrangers.10.34.2*
    
    Subsidiary Guaranty, dated as of January 27, 2006, made by FelCor/CSS Holdings, L.P.,
FelCor Hotel Asset Company, L.L.C., FelCor Pennsylvania Company, L.L.C., FelCor Lodging
Holding Company, L.L.C., FHAC Texas Holdings, L.P., FelCor Canada Co., FelCor Omaha Hotel
Company, L.L.C., FelCor TRS Holdings, L.P., Myrtle Beach Hotels, L.L.C., FelCor TRS Borrower
I, L.P., FelCor TRS Guarantor, L.P., Center City Hotel Associates, FelCor Lodging Company,
L.L.C., FelCor TRS Borrower 3, L.P. and FelCor TRS Borrower 4, L.L.C.10.35*
    
    Purchase and Sale Agreement, dated effective as of January 20, 2006, by and between FelCor
and Hospitality Properties Trust.14.1
    
    FelCor Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the 2004 Form 10-K and
incorporated herein by reference).21.1*
    
    List of Subsidiaries of FelCor.23.1*
    
    Consent of PricewaterhouseCoopers LLP.31.1*
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2*
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002).32.1*
    
    Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).32.2*
    
    Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (18 U.S.C. 1350).
 
 *
    
    Indicates that the document is filed herewith. 68




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##### Table of Contents



SIGNATURES
  FELCOR LODGING TRUST INCORPORATEDBy:
    /s/ Lawrence D. RobinsonLawrence D. RobinsonExecutive Vice President   Date
    
    SignatureMarch 15, 2006
    
    /s/ Thomas J. Corcoran, Jr.Thomas J. Corcoran, Jr.Chairman of the Board and DirectorMarch 15, 2006
    
    /s/ Richard A. SmithRichard A. SmithPresident and Director (Chief Executive Officer)March 15, 2006
    
    /s/ Andrew J. WelchAndrew J. WelchExecutive Vice President and Chief Financial Officer(Principal Financial Officer)March 15, 2006
    
    /s/ Lester C. JohnsonLester C. JohnsonSenior Vice President and Controller(Principal Accounting Officer)March 8, 2006
    
    /s/ Melinda J. BushMelinda J. Bush, DirectorMarch 13, 2006
    
    /s/ Richard S. EllwoodRichard S. Ellwood, DirectorMarch 8, 2006
    
    /s/ Richard O. JacobsonRichard O. Jacobson, DirectorMarch 9, 2006
    
    /s/ David C. KloeppelDavid C. Kloeppel, DirectorMarch 13, 2006
    
    /s/ Charles A. Ledsinger, Jr.Charles A. Ledsinger, Jr., DirectorMarch 9, 2006
    
    /s/ Robert H. Lutz, Jr.Robert H. Lutz, Jr., DirectorMarch 13, 2006
    
    /s/ Robert A. MathewsonRobert A. Mathewson, DirectorMarch 8, 2006
    
    /s/ Donald J. McNamaraDonald J. McNamara, Director
 69




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 INDEX TO FINANCIAL STATEMENTS
 PART I  FINANCIAL INFORMATION
 Report of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets  December 31, 2005 and 2004
    
    F-4Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003
    
    F-5Consolidated Statements of Comprehensive Loss for the years ended December 31, 2005, 2004 and 2003
    
    F-6Consolidated Statements of Stockholders Equity for the years ended December 31, 2005, 2004 and 2003
    
    F-7Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003
    
    F-8Notes to Consolidated Financial Statements
    
    F-9Schedule III  Real Estate and Accumulated Depreciation as of December 31, 2005
    
    F-35
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
   Consolidated financial statements and financial statement schedule
 
 Internal control over financial reporting
  F-2




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##### Table of Contents



F-3




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 CONSOLIDATED BALANCE SHEETS
 December 31, 2005 and 2004
 (in thousands)
 2005
    
    
    2004ASSETSInvestment in hotels, net of accumulated depreciation of $1,019,123 in 2005
and $948,631 in 2004
    
    $
    2,587,379
    
    
    $
    2,955,766Investment in unconsolidated entities
    
    
    109,262
    
    
    
    110,843Hotels held for sale
    
    
    
    
    
    
    255Cash and cash equivalents
    
    
    94,564
    
    
    
    119,310Restricted cash
    
    
    18,298
    
    
    
    34,736Accounts receivable, net of allowance for doubtful accounts of $2,203 in 2005
and $905 in 2004
    
    
    54,815
    
    
    
    51,845Deferred expenses, net of accumulated amortization of $12,150 in 2005
and $14,935 in 2004
    
    
    12,423
    
    
    
    18,804Condominium development project
    
    
    13,051
    
    
    
    1,613Other assets
    
    
    29,301
    
    
    
    24,486Total assets
    
    $
    2,919,093
    
    
    $
    3,317,658LIABILITIES AND STOCKHOLDERS EQUITYDebt, net of discount of $2,982 in 2005 and $4,529 in 2004
    
    $
    1,675,280
    
    
    $
    1,767,122Distributions payable
    
    
    8,596
    
    
    
    8,867Accrued expenses and other liabilities
    
    
    138,017
    
    
    
    124,922Total liabilities
    
    
    1,821,893
    
    
    
    1,900,911Commitments and contingenciesMinority interest in FelCor LP, 2,763 and 2,788 units issued and
outstanding at December 31, 2005 and 2004, respectively
    
    
    25,393
    
    
    
    39,659Minority interest in other partnerships
    
    
    40,014
    
    
    
    46,765Stockholders equity:Preferred stock, $.01 par value, 20,000 shares authorized:Series A Cumulative Convertible Preferred Stock, 12,880 shares, liquidation
value
of $322,011 issued and outstanding at December 31, 2005 and December 31,
2004
    
    
    309,362
    
    
    
    309,362Series B Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of
$169,395 issued and outstanding at December 31, 2004
    
    
    
    
    
    
    169,395Series C Cumulative Redeemable Preferred Stock, 68 shares, liquidation value of
$169,950 issued and outstanding at December 31, 2005
    
    
    169,412
    
    
    
    Common stock, $.01 par value, 200,000 shares authorized and 69,440 and
69,436 shares issued, including shares in treasury, at December 31, 2005
and 2004, respectively
    
    
    694
    
    
    
    694Additional paid-in capital
    
    
    2,081,869
    
    
    
    2,085,189Accumulated other comprehensive income
    
    
    19,602
    
    
    
    15,780Accumulated deficit
    
    
    (1,372,720
    )
    
    
    (1,066,143
    )Less: Common stock in treasury, at cost, of 9,231 and 9,619 shares
at December 31, 2005 and 2004, respectively
    
    
    (176,426
    )
    
    
    (183,954
    )Total stockholders equity
    
    
    1,031,793
    
    
    
    1,330,323Total liabilities and stockholders equity
    
    $
    2,919,093
    
    
    $
    3,317,658
  F-4




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 For the years ended December 31, 2005, 2004 and 2003
 (in thousands, except per share data)
 2005
    
    
    2004
    
    
    2003Revenues:Hotel operating revenue
    
    $
    1,210,130
    
    
    $
    1,113,153
    
    
    $
    1,047,342Retail space rental and other revenue
    
    
    2,049
    
    
    
    2,721
    
    
    
    1,022Total revenues
    
    
    1,212,179
    
    
    
    1,115,874
    
    
    
    1,048,364Expenses:Hotel departmental expenses
    
    
    419,477
    
    
    
    400,396
    
    
    
    367,446Other property operating costs
    
    
    353,070
    
    
    
    323,587
    
    
    
    303,611Management and franchise fees
    
    
    61,348
    
    
    
    57,305
    
    
    
    55,345Taxes, insurance and lease expense
    
    
    122,186
    
    
    
    109,310
    
    
    
    112,829Abandoned projects
    
    
    265
    
    
    
    
    
    
    
    Corporate expenses
    
    
    19,025
    
    
    
    17,035
    
    
    
    14,233Depreciation
    
    
    119,323
    
    
    
    111,836
    
    
    
    116,710Total operating expenses
    
    
    1,094,694
    
    
    
    1,019,469
    
    
    
    970,174Operating income
    
    
    117,485
    
    
    
    96,405
    
    
    
    78,190Interest expense, net
    
    
    (130,954
    )
    
    
    (145,666
    )
    
    
    (162,808
    )Impairment loss
    
    
    (263,091
    )
    
    
    (3,494
    )
    
    
    (74,160
    )Hurricane loss
    
    
    (6,481
    )
    
    
    (2,125
    )
    
    
    Charge-off of deferred financing costs
    
    
    (2,659
    )
    
    
    (6,960
    )
    
    
    (2,834
    )Loss on early extinguishment of debt
    
    
    (11,921
    )
    
    
    (44,216
    )
    
    
    Gain on swap termination
    
    
    
    
    
    
    1,005
    
    
    
    Loss before equity in income of unconsolidated entities,
minority interests and gain on sale of assets
    
    
    (297,621
    )
    
    
    (105,051
    )
    
    
    (161,612
    )Equity in income from unconsolidated entities
    
    
    10,169
    
    
    
    17,121
    
    
    
    2,370Gain on sale of assets
    
    
    733
    
    
    
    1,167
    
    
    
    284Minority interests
    
    
    23,813
    
    
    
    5,229
    
    
    
    10,632Loss from continuing operations
    
    
    (262,906
    )
    
    
    (81,534
    )
    
    
    (148,326
    )Discontinued operations
    
    
    11,291
    
    
    
    (18,593
    )
    
    
    (161,818
    )Net loss
    
    
    (251,615
    )
    
    
    (100,127
    )
    
    
    (310,144
    )Preferred dividends
    
    
    (39,408
    )
    
    
    (35,130
    )
    
    
    (26,908
    )Issuance costs of redeemed preferred stock
    
    
    (6,522
    )
    
    
    
    
    
    
    Net loss applicable to common stockholders
    
    $
    (297,545
    )
    
    $
    (135,257
    )
    
    $
    (337,052
    )Loss per common share data:Basic and diluted:Net loss from continuing operations
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )Net loss
    
    $
    (5.01
    )
    
    $
    (2.29
    )
    
    $
    (5.75
    )Weighted average common shares outstanding
    
    
    59,436
    
    
    
    59,045
    
    
    
    58,657Cash dividends declared on common stock
    
    $
    0.15
    
    
    
    
    
    
    
    
  F-5




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 For the years ended December 31, 2005, 2004 and 2003
 (in thousands)
 2005
    
    
    2004
    
    
    2003Net loss
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )Unrealized holding gains from interest rate swaps
    
    
    2,074
    
    
    
    147
    
    
    
    Foreign currency translation adjustment
    
    
    1,748
    
    
    
    6,155
    
    
    
    9,577Comprehensive loss
    
    $
    (247,793
    )
    
    $
    (93,825
    )
    
    $
    (300,567
    )
  F-6




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 For the years ended December 31, 2005, 2004, and 2003
(in thousands)
 Preferred Stock
    
    
    Common StockAccumulatedNumber
    
    
    
    
    
    
    Number
    
    
    
    
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    Totalof
    
    
    
    
    
    
    of
    
    
    
    
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Treasury
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    Stock
    
    
    EquityBalance at December 31, 2002
    
    
    6,048
    
    
    $
    318,907
    
    
    
    75,136
    
    
    $
    751
    
    
    $
    2,204,530
    
    
    $
    (99
    )
    
    $
    (593,834
    )
    
    $
    (313,438
    )
    
    $
    1,616,817Foreign exchange translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,577
    
    
    
    
    
    
    
    
    
    
    
    9,577Issuance of stock awards
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    (1,873
    )
    
    
    
    
    
    
    
    
    
    
    1,873
    
    
    
    Amortization of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,210Common stock exchange for
treasury
stock
    
    
    
    
    
    
    
    
    
    
    (5,713
    )
    
    
    (57
    )
    
    
    (109,295
    )
    
    
    
    
    
    
    
    
    
    
    109,352
    
    
    
    Conversion of operating
partnership units into common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,495
    )
    
    
    
    
    
    
    
    
    
    
    4,936
    
    
    
    2,441Allocation from minority units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,279Dividends declared:$1.95 per Series A preferred
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,662
    )
    
    
    
    
    
    
    (11,662
    )$2.25 per Series B depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,246
    )
    
    
    
    
    
    
    (15,246
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (310,144
    )
    
    
    
    
    
    
    (310,144
    )Balance at December 31, 2003
    
    
    6,048
    
    
    
    318,907
    
    
    
    69,429
    
    
    
    694
    
    
    
    2,095,356
    
    
    
    9,478
    
    
    
    (930,886
    )
    
    
    (197,277
    )
    
    
    1,296,272Foreign exchange translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,155
    
    
    
    
    
    
    
    
    
    
    
    6,155Issuance of Series A preferred
stock
    
    
    6,900
    
    
    
    159,850
    
    
    
    
    
    
    
    
    
    
    
    (3,850
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,000Issuance of stock awards
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    (9,067
    )
    
    
    
    
    
    
    
    
    
    
    9,092
    
    
    
    25Amortization of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,179Unrealized gain on hedging
transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    147Conversion of operating
partnership
units into common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,999
    )
    
    
    
    
    
    
    
    
    
    
    4,692
    
    
    
    2,693Allocation from minority units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,109
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,109Forfeitures of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    461
    
    
    
    
    
    
    
    
    
    
    
    (461
    )
    
    
    Dividends declared:$1.95 per Series A preferred
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,884
    )
    
    
    
    
    
    
    (19,884
    )$2.25 per Series B depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,246
    )
    
    
    
    
    
    
    (15,246
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100,127
    )
    
    
    
    
    
    
    (100,127
    )Balance at December 31, 2004
    
    
    12,948
    
    
    
    478,757
    
    
    
    69,436
    
    
    
    694
    
    
    
    2,085,189
    
    
    
    15,780
    
    
    
    (1,066,143
    )
    
    
    (183,954
    )
    
    
    1,330,323Foreign exchange translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,748
    
    
    
    
    
    
    
    
    
    
    
    1,748Issuance of Series C preferred
stock
    
    
    68
    
    
    
    169,412
    
    
    
    
    
    
    
    
    
    
    
    (5,492
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,920Retirement of Series B
preferred stock
    
    
    (68
    )
    
    
    (169,395
    )
    
    
    
    
    
    
    
    
    
    
    6,522
    
    
    
    
    
    
    
    (6,522
    )
    
    
    
    
    
    
    (169,395
    )Issuance of stock awards
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    (7,285
    )
    
    
    
    
    
    
    
    
    
    
    7,022
    
    
    
    (263
    )Amortization of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,265
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,265Unrealized gain on hedging
transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,074
    
    
    
    
    
    
    
    
    
    
    
    2,074Conversion of operating
partnership
units into common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (118
    )
    
    
    
    
    
    
    
    
    
    
    506
    
    
    
    388Allocation from minority units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (212
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (212
    )Dividends declared:
    
    
    $0.15 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,032
    )
    
    
    
    
    
    
    (9,032
    )$1.95 per Series A preferred
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,117
    )
    
    
    
    
    
    
    (25,117
    )$1.125 per Series B depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,432
    )
    
    
    
    
    
    
    (5,432
    )$1.63 per Series C depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,859
    )
    
    
    
    
    
    
    (8,859
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251,615
    )
    
    
    
    
    
    
    (251,615
    )Balance at December 31, 2005
    
    
    12,948
    
    
    $
    478,774
    
    
    
    69,440
    
    
    $
    694
    
    
    $
    2,081,869
    
    
    $
    19,602
    
    
    $
    (1,372,720
    )
    
    $
    (176,426
    )
    
    $
    1,031,793
  F-7




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the years ended December 31, 2005, 2004, and 2003
(in thousands)
 2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net loss
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation
    
    
    122,535
    
    
    
    122,653
    
    
    
    140,225Gain on sale of assets
    
    
    (12,522
    )
    
    
    (20,589
    )
    
    
    (2,660
    )Amortization of deferred financing fees
    
    
    3,399
    
    
    
    4,161
    
    
    
    4,996Accretion (amortization) of debt
    
    
    1,167
    
    
    
    510
    
    
    
    590Allowance for doubtful accounts
    
    
    1,298
    
    
    
    199
    
    
    
    309Amortization of unearned officers and directors compensation
    
    
    2,904
    
    
    
    2,945
    
    
    
    2,210Equity in income from unconsolidated entities
    
    
    (10,169
    )
    
    
    (17,121
    )
    
    
    (2,370
    )Distributions of income from unconsolidated entities
    
    
    1,062
    
    
    
    11,932
    
    
    
    2,212Charge-off of deferred financing costs
    
    
    2,659
    
    
    
    6,960
    
    
    
    2,834Loss (gain) on early extinguishment of debt
    
    
    8,641
    
    
    
    44,216
    
    
    
    (1,611
    )Impairment loss on investment in hotels and hotels held for sale
    
    
    266,751
    
    
    
    38,289
    
    
    
    245,509Minority interests
    
    
    (23,295
    )
    
    
    (7,375
    )
    
    
    (20,588
    )Changes in assets and liabilities:Accounts receivable
    
    
    (7,476
    )
    
    
    (2,412
    )
    
    
    2,597Restricted cash operations
    
    
    (6,941
    )
    
    
    (23,467
    )
    
    
    2,826Other assets
    
    
    (4,887
    )
    
    
    (424
    )
    
    
    (7,043
    )Accrued expenses and other liabilities
    
    
    17,971
    
    
    
    (27,069
    )
    
    
    (6,978
    )Net cash flow provided by operating activities
    
    
    111,482
    
    
    
    33,281
    
    
    
    52,914Cash flows provided by (used in) investing activities:Acquisition of hotels
    
    
    
    
    
    
    (27,759
    )
    
    
    Improvements and additions to hotels
    
    
    (111,664
    )
    
    
    (95,599
    )
    
    
    (64,045
    )Additions to condominium project
    
    
    (11,546
    )
    
    
    
    
    
    
    Acquisition of joint venture
    
    
    (1,197
    )
    
    
    
    
    
    
    Cash from consolidation of venture
    
    
    3,204
    
    
    
    
    
    
    
    2,705Proceeds from asset dispositions
    
    
    73,502
    
    
    
    152,686
    
    
    
    104,131Proceeds received from property damage insurance
    
    
    3,131
    
    
    
    
    
    
    
    Decrease (increase) in restricted cash-investing
    
    
    10,804
    
    
    
    8,155
    
    
    
    (689
    )Cash distributions from unconsolidated entities
    
    
    6,578
    
    
    
    10,899
    
    
    
    6,636Capital contributions to unconsolidated entities
    
    
    (1,350
    )
    
    
    
    
    
    
    Net cash flow provided by (used in) investing activities
    
    
    (28,538
    )
    
    
    48,382
    
    
    
    48,738Cash flows provided by (used in) financing activities:Proceeds from borrowings
    
    
    233,911
    
    
    
    523,802
    
    
    
    321,119Net proceeds from sale of preferred stock
    
    
    164,147
    
    
    
    158,990
    
    
    
    Redemption of preferred stock
    
    
    (169,395
    )
    
    
    
    
    
    
    Repayment of borrowings
    
    
    (292,990
    )
    
    
    (838,891
    )
    
    
    (198,426
    )Payment of debt issue costs
    
    
    (659
    )
    
    
    (5,517
    )
    
    
    (6,656
    )Decrease in restricted cash financing
    
    
    4,401
    
    
    
    
    
    
    
    Distributions paid to other partnerships minority interests
    
    
    
    
    
    
    (4,000
    )
    
    
    Contribution from minority interest holders
    
    
    2,200
    
    
    
    3,247
    
    
    
    Distributions paid to FelCor LP limited partners
    
    
    (414
    )
    
    
    
    
    
    
    (492
    )Distributions paid to preferred stockholders
    
    
    (39,905
    )
    
    
    (34,757
    )
    
    
    (26,908
    )Distributions paid to common stockholders
    
    
    (9,032
    )
    
    
    
    
    
    
    (8,796
    )Net cash flow provided by (used in) financing activities
    
    
    (107,736
    )
    
    
    (197,126
    )
    
    
    79,841Effect of exchange rate changes on cash
    
    
    46
    
    
    
    2,888
    
    
    
    229Net change in cash and cash equivalents
    
    
    (24,746
    )
    
    
    (112,575
    )
    
    
    181,722Cash and cash equivalents at beginning of periods
    
    
    119,310
    
    
    
    231,885
    
    
    
    50,163Cash and cash equivalents at end of periods
    
    $
    94,564
    
    
    $
    119,310
    
    
    $
    231,885Supplemental cash flow information  Interest paid
    
    $
    132,091
    
    
    $
    162,324
    
    
    $
    160,407
  F-8




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization
 ® ®
     Brand
    
    Hotels
    
    RoomsEmbassy Suites Hotels
    
    
    54
    
    
    
    13,653Doubletree and Doubletree Guest Suites®
    
    
    9
    
    
    
    2,019Holiday Inn®  branded
    
    
    33
    
    
    
    11,356Crowne Plaza® and Crowne Plaza Suites®
    
    
    12
    
    
    
    4,025Sheraton® and Sheraton Suites®
    
    
    10
    
    
    
    3,269Other brands
    
    
    7
    
    
    
    1,810Total hotels
    
    
    125
    F-9




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies
 Principles of Consolidation
 Use of Estimates
 Investment in Hotels
   Acquisition of Hotels
 Investment in Unconsolidated Entities
 F-10




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Hotels Held for Sale 
  Cash and Cash Equivalents
  Restricted Cash
 Deferred Expenses
 Other Assets 
 Revenue Recognition
  F-11




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Foreign Currency Translation
 Capitalized Cost
 Net Income (Loss) Per Common Share
  Stock Compensation 3⁄4
 2005
    
    
    2004
    
    
    2003Loss from continuing operations, as reported
    
    $
    (262,906
    )
    
    $
    (81,534
    )
    
    $
    (148,326
    )Add stock based compensation included in the net loss, as reported
    
    
    2,904
    
    
    
    2,945
    
    
    
    2,210Less stock based compensation expense that would have been
included in the determination of net loss if the fair value
method had been applied to all awards
    
    
    (2,914
    )
    
    
    (3,001
    )
    
    
    (2,355
    )Loss from continuing operations, pro forma
    
    $
    (262,916
    )
    
    $
    (81,590
    )
    
    $
    (148,471
    )Basic and diluted net loss from continuing operations per common
share:As reported
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )Pro forma
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )
  F-12




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies 3⁄4 (continued)
 Derivatives 3⁄4
 Segment Information 3⁄4
 Distributions and Dividends
 Minority Interests
 Income Taxes
 3. Investment in Hotels
  2005
    
    
    2004Building and improvements.
    
    $
    2,710,465
    
    
    $
    3,031,237Furniture, fixtures and equipment
    
    
    567,330
    
    
    
    519,358Land
    
    
    294,074
    
    
    
    316,364Construction in progress
    
    
    34,633
    
    
    
    37,4383,606,502
    
    
    
    3,904,397Accumulated depreciation
    
    
    (1,019,123
    )
    
    
    (948,631
    )$
    2,587,379
    
    
    $
    2,955,766
  F-13




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 3. Investment in Hotels  (continued)
   4. Impairment Charge
      F-14




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. Impairment Charge  (continued)
   5. Discontinued Operations
   Year Ended December 31,2005
    
    
    2004
    
    
    2003Hotel operating revenue
    
    $
    45,970
    
    
    $
    145,007
    
    
    $
    209,684Operating expenses
    
    
    (44,599
    )
    
    
    (146,430
    )
    
    
    (211,091
    )Asset disposition costs
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    Operating income (loss)
    
    
    1,371
    
    
    
    (1,423
    )
    
    
    (1,407
    )Direct interest costs, net
    
    
    (918
    )
    
    
    (3,943
    )
    
    
    (3,003
    )Impairment
    
    
    (3,660
    )
    
    
    (34,795
    )
    
    
    (171,349
    )Gain on the early extinguishment of debt
    
    
    3,280
    
    
    
    
    
    
    
    1,611Gain on disposition
    
    
    11,736
    
    
    
    19,422
    
    
    
    2,376Minority interest
    
    
    (518
    )
    
    
    2,146
    
    
    
    9,954Income (loss) from discontinued operations
    
    $
    11,291
    
    
    $
    (18,593
    )
    
    $
    (161,818
    )
    F-15




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. Investment in Unconsolidated Entities
   December 31,2005
    
    
    2004Balance sheet information:Investment in hotels, net of accumulated depreciation
    
    $
    259,645
    
    
    $
    282,028Total assets
    
    $
    287,375
    
    
    $
    313,104Debt
    
    $
    203,880
    
    
    $
    218,292Total liabilities
    
    $
    203,484
    
    
    $
    237,597Equity
    
    $
    83,891
    
    
    $
    75,507
   2005
    
    
    2004
    
    
    2003Total revenues
    
    $
    75,396
    
    
    $
    67,902
    
    
    $
    75,456Net income
    
    $
    21,801
    
    
    $
    33,746
    (a)
    
    $
    9,438Net income attributable to FelCor
    
    $
    11,348
    
    
    $
    18,483
    
    
    $
    4,459Preferred return
    
    
    516
    
    
    
    516
    
    
    
    514Depreciation of cost in excess of book value
    
    
    (1,695
    )
    
    
    (1,878
    )
    
    
    (2,603
    )Equity in income from unconsolidated entities
    
    $
    10,169
    
    
    $
    17,121
    
    
    $
    2,370
 
   2005
    
    
    2004Hotel investments
    
    $
    43,117
    
    
    $
    38,497Cost in excess of book value of hotel investments
    
    
    63,098
    
    
    
    68,924Land and condominium investments
    
    
    4,270
    
    
    
    4,124Hotel lessee investments
    
    
    (1,223
    )
    
    
    (702
    )$
    109,262
    
    
    $
    110,843
 F-16




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. Investment in Unconsolidated Entities  (continued)
  2005
    
    
    2004
    
    
    2003Hotel investments
    
    $
    10,691
    
    
    $
    17,673
    
    
    $
    2,981Hotel lessee operations
    
    
    (522
    )
    
    
    (552
    )
    
    
    (611
    )$
    10,169
    
    
    $
    17,121
    
    
    $
    2,370
  7. Debt
  Balance OutstandingEncumbered
    
    
    Interest Rate at
    
    
    Maturity
    
    
    December 31,Hotels
    
    
    December 31, 2005
    
    
    Date
    
    
    2005
    
    
    2004Promissory note
    
    none
    
    
    6.31
    (a)
    
    June 2016
    
    $
    650
    
    
    $
    650Senior unsecured term notes
    
    none
    
    
    7.63
    
    
    Oct. 2007
    
    
    123,358
    
    
    
    122,426Senior unsecured term notes
    
    none
    
    
    9.00
    
    
    June 2011
    
    
    298,660
    
    
    
    298,409Term loan(b)
    
    none
    
    
    5.81
    
    
    Oct. 2006
    
    
    225,000
    
    
    
    Senior unsecured term notes
    
    none
    
    
    8.48
    (c)
    
    June 2011
    
    
    290,000
    
    
    
    290,000Total unsecured debt(d)
    
    
    
    
    
    
    7.89
    
    
    
    
    
    
    
    937,668
    
    
    
    711,485Mortgage debt
    
    9 hotels
    
    
    6.52
    
    
    July 2009-2014
    
    
    104,282
    
    
    
    192,363Mortgage debt
    
    8 hotels
    
    
    6.63
    (e)
    
    May 2006
    
    
    117,913
    
    
    
    144,669Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,316Mortgage debt
    
    7 hotels
    
    
    7.32
    
    
    April 2009
    
    
    127,455
    
    
    
    130,458Mortgage debt
    
    4 hotels
    
    
    7.55
    
    
    June 2009
    
    
    41,912
    
    
    
    67,959Mortgage debt
    
    8 hotels
    
    
    8.70
    
    
    May 2010
    
    
    172,604
    
    
    
    175,504Mortgage debt
    
    7 hotels
    
    
    8.73
    
    
    May 2010
    
    
    133,374
    
    
    
    135,690Mortgage debt
    
    1 hotel
    
    
    6.77
    (a)
    
    August 2008
    
    
    15,500
    
    
    
    15,500Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,521Mortgage debt
    
    1 hotel
    
    
    7.91
    
    
    Dec. 2007
    
    
    10,457
    
    
    
    Mortgage debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,476Other
    
    1 hotel
    
    
    9.17
    
    
    August 2011
    
    
    5,204
    
    
    
    6,181Construction loan
    
    
    
    
    
    
    6.47
    
    
    Oct. 2007
    
    
    8,911
    
    
    
    Total secured debt(d)
    
    46 hotels
    
    
    7.69
    
    
    
    
    
    
    
    737,612
    
    
    
    1,055,637Total(d)
    
    
    
    
    
    
    7.80
    %
    
    
    
    
    
    $
    1,675,280
    
    
    $
    1,767,122
 
 (a)
    
    Variable interest rate based on LIBOR. The six month LIBOR was 4.58% at December
31, 2005.(b)
    
    This term loan was repaid in January 2006.(c)
    
    Variable interest rate based on LIBOR. $100 million of these notes were matched
with interest rate swap agreements that effectively converted the variable interest rate
to a fixed rate.(d)
    
    Interest rates are calculated based on the weighted average outstanding debt at
December 31, 2005.(e)
    
    Variable interest rate based on LIBOR. This debt may be extended at our option for
up to two, one-year periods. F-17




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 7 . Debt 3⁄4 (continued)
          F-18




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 7. Debt 3⁄4 (continued)
     Year2006(a)
    
    $
    356,6392007
    
    
    149,7372008
    
    
    40,1062009
    
    
    176,5602010
    
    
    281,8432011 and thereafter
    
    
    673,3771,678,262Discount accretion over term
    
    
    (2,982
    )$
    1,675,280
 
 (a)
    
    Includes a $225 million term note that was repaid in January
2006 and a $118 million non-recourse mortgage loan maturing in 2006, that may
be extended at our option for up to two, one-year periods, subject to certain
contingencies. F-19




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 8. Derivatives
      F-20




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 8. Derivatives  (continued)
    9. Fair Value of Financial Instruments
   F-21




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 10. Income Taxes
   Reconciliation between TRSs GAAP net loss and taxable loss:
  2005
    
    
    2004
    
    
    2003GAAP net loss
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )GAAP net loss (income) from REIT operations
    
    
    (37,237
    )
    
    
    35,168
    
    
    
    171,463GAAP net loss of taxable subsidiaries
    
    
    (288,852
    )
    
    
    (64,959
    )
    
    
    (138,681
    )Impairment loss not deductible for tax
    
    
    231,605
    
    
    
    8,509
    
    
    
    39,303Tax loss in excess of book gains on sale of hotels
    
    
    (39,842
    )
    
    
    (51,576
    )
    
    
    (31,423
    )Depreciation and amortization(a)
    
    
    (1,910
    )
    
    
    (4,948
    )
    
    
    (1,625
    )Employee benefits not deductible for tax
    
    
    1,708
    
    
    
    1,040
    
    
    
    2,381Other book/tax differences
    
    
    4,779
    
    
    
    (3,216
    )
    
    
    (2,997
    )Tax loss of taxable subsidiaries
    
    $
    (92,512
    )
    
    $
    (115,150
    )
    
    $
    (133,042
    )
 
 (a)
    
    The changes in book/tax differences in depreciation and amortization
principally resulting from book and tax basis differences, differences in depreciable
lives and accelerated depreciation methods. F-22




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 10. Income Taxes  (continued)
 Summary of TRSs net deferred tax asset:
  2005
    
    
    2004Accumulated net operating losses of our TRS
    
    $
    162,827
    
    
    $
    127,672Tax property basis in excess of book
    
    
    
    
    
    
    10,524Accrued employee benefits not deductible for tax
    
    
    9,695
    
    
    
    9,046Bad debt allowance not deductible for tax
    
    
    837
    
    
    
    344Gross deferred tax assets
    
    
    173,359
    
    
    
    147,586Valuation allowance
    
    
    (133,138
    )
    
    
    (147,586
    )Deferred tax asset after valuation allowance
    
    
    40,221
    
    
    
    Gross deferred tax liability  book property basis in excess of tax
    
    
    (40,221
    )
    
    
    Net deferred tax asset
    
    $
    
    
    
    $
    
  Reconciliation between REIT GAAP net loss and taxable income loss:
  2005
    
    
    2004
    
    
    2003GAAP net income (loss) from REIT operations
    
    $
    37,237
    
    
    $
    (35,168
    )
    
    $
    (171,463
    )Book/tax differences, net:Depreciation and amortization(a)
    
    
    4,797
    
    
    
    2,386
    
    
    
    14,236Minority interests
    
    
    (24,204
    )
    
    
    (2,724
    )
    
    
    (19,241
    )Tax loss in excess of book gains on sale of hotels
    
    
    (21,547
    )
    
    
    (10,893
    )
    
    
    (2,736
    )Impairment loss not deductible for tax
    
    
    35,146
    
    
    
    29,779
    
    
    
    206,206Other
    
    
    4,045
    
    
    
    1,314
    
    
    
    (184
    )Taxable income (loss) subject to distribution requirement(b)
    
    $
    35,474
    
    
    $
    (15,306
    )
    
    $
    26,818
 
 (a)
    
    Book/tax differences in depreciation and amortization principally result from
differences in depreciable lives and accelerated depreciation methods.(b)
    
    The dividend distribution requirement is 90%.  F-23




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 10. Income Taxes  (continued)
 Characterization of distributions:
  2005
    
    
    2004
    
    
    2003Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Common StockOrdinary income
    
    $
    0.028
    
    
    
    18.76
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    Return of capital
    
    
    0.122
    
    
    
    81.24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.150
    
    
    
    100.00
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    Preferred Stock  Series AOrdinary income
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    0.0425
    
    
    
    2.18
    
    
    $
    1.95
    
    
    
    100.00Return of capital
    
    
    
    
    
    
    
    
    
    
    1.9075
    
    
    
    97.82
    
    
    
    
    
    
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    1.9500
    
    
    
    100.00
    
    
    $
    1.95
    
    
    
    100.00Preferred Stock  Series BOrdinary income
    
    $
    1.125
    
    
    
    100.00
    
    
    $
    0.0491
    
    
    
    2.18
    
    
    $
    2.25
    
    
    
    100.00Return of capital
    
    
    
    
    
    
    
    
    
    
    2.2009
    
    
    
    97.82
    
    
    
    
    
    
    
    $
    1.125
    
    
    
    100.00
    
    
    $
    2.2500
    
    
    
    100.00
    
    
    $
    2.25
    
    
    
    100.00Preferred Stock  Series COrdinary income
    
    $
    1.633
    
    
    
    100.00
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    Return of capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1.633
    
    
    
    100.00
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
 11. Capital Stock
  Preferred Stock
   F-24




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 11. Capital Stock  (continued)
     FelCor LP Units
  12. Hotel Operating Revenue, Departmental Expenses, and Other Property Operating Costs
  Year Ended December 31,2005
    
    
    2004
    
    
    2003Room revenue
    
    $
    975,128
    
    
    $
    886,478
    
    
    $
    835,278Food and beverage revenue
    
    
    174,537
    
    
    
    168,391
    
    
    
    156,974Other operating departments
    
    
    60,465
    
    
    
    58,284
    
    
    
    55,090Total hotel operating revenues
    
    $
    1,210,130
    
    
    $
    1,113,153
    
    
    $
    1,047,342
 F-25




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs  (continued)
    Year Ended December 31,2005
    
    
    2004
    
    
    2003Room
    
    $
    253,563
    
    
    $
    238,807
    
    
    $
    219,399Food and beverage
    
    
    135,558
    
    
    
    132,561
    
    
    
    123,736Other operating departments
    
    
    30,356
    
    
    
    29,028
    
    
    
    24,311Total hotel departmental expenses
    
    $
    419,477
    
    
    $
    400,396
    
    
    $
    367,446
  Year Ended December 31,2005
    
    
    2004
    
    
    2003Hotel general and administrative expense
    
    $
    115,394
    
    
    $
    104,780
    
    
    $
    99,876Marketing
    
    
    103,807
    
    
    
    96,465
    
    
    
    90,881Repair and maintenance
    
    
    67,359
    
    
    
    64,494
    
    
    
    59,384Utilities
    
    
    66,510
    
    
    
    57,848
    
    
    
    53,470Total other property operating costs
    
    $
    353,070
    
    
    $
    323,587
    
    
    $
    303,611
  F-26




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 13. Taxes, Insurance and Lease Expense
  Year Ended December 31,2005
    
    
    2004
    
    
    2003Operating lease expense (a)
    
    $
    65,659
    
    
    $
    59,508
    
    
    $
    55,637Real estate and other taxes
    
    
    42,507
    
    
    
    37,810
    
    
    
    42,091Property, general liability insurance and other
    
    
    14,020
    
    
    
    11,992
    
    
    
    15,101Total taxes, insurance and lease expense
    
    $
    122,186
    
    
    $
    109,310
    
    
    $
    112,829
 
 (a)
    
    Includes hotel lease expense of $57.0 million, $51.4 million and $47.2 million,
respectively, associated with 14 hotels in 2005 and 15 hotels in 2004 and 2003 owned by
unconsolidated entities and leased to our consolidated lessees. Included in lease
expense is $31.0 million, $23.6 million and $19.5 million in percentage rent for the
year ended December 31, 2005, 2004 and 2003, respectively. 14. Land Leases and Hotel Rent
  Year2006
    
    $
    34,9962007
    
    
    14,6122008
    
    
    10,9262009
    
    
    10,9192010
    
    
    10,0812011 and thereafter
    
    
    92,102$
    173,636
 F-27




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 15. Earnings Per Share
  2005
    
    
    2004
    
    
    2003Numerator:Loss from continuing operations
    
    $
    (262,906
    )
    
    $
    (81,534
    )
    
    $
    (148,326
    )Less: Preferred dividends
    
    
    (39,408
    )
    
    
    (35,130
    )
    
    
    (26,908
    )Issuance costs of redeemed preferred stock
    
    
    (6,522
    )
    
    
    
    
    
    
    Loss from continuing operations and applicable to
common stockholders
    
    
    (308,836
    )
    
    
    (116,664
    )
    
    
    (175,234
    )Discontinued operations
    
    
    11,291
    
    
    
    (18,593
    )
    
    
    (161,818
    )Net loss applicable to common stockholders
    
    $
    (297,545
    )
    
    $
    (135,257
    )
    
    $
    (337,052
    )Denominator:Denominator for basic loss per share 
weighted average shares
    
    
    59,436
    
    
    
    59,045
    
    
    
    58,657Denominator for diluted loss per share  adjusted
weighted average shares and assumed conversions
    
    
    59,436
    
    
    
    59,045
    
    
    
    58,657Loss per share data:Basic:Loss from continuing operations
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )Discontinued operations
    
    $
    0.19
    
    
    $
    (0.31
    )
    
    $
    (2.76
    )Net loss
    
    $
    (5.01
    )
    
    $
    (2.29
    )
    
    $
    (5.75
    )Diluted:Loss from continuing operations
    
    $
    (5.20
    )
    
    $
    (1.98
    )
    
    $
    (2.99
    )Discontinued operations
    
    $
    0.19
    
    
    $
    (0.31
    )
    
    $
    (2.76
    )Net loss
    
    $
    (5.01
    )
    
    $
    (2.29
    )
    
    $
    (5.75
    )
  2005
    
    
    2004
    
    
    2003Restricted shares granted but not vested
    
    
    648
    
    
    
    395
    
    
    
    303Series A convertible preferred shares
    
    
    9,985
    
    
    
    9,985
    
    
    
    4,636
  16. Commitments, Contingencies and Related Party Transactions
  F-28




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 16. Commitments, Contingencies and Related Party Transactions  (continued)
  .
     F-29




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 17. Supplemental Cash Flow Disclosure
    For the years ending December 31,2005
    
    
    2004
    
    
    2003Depreciation from continuing operations
    
    $
    119,323
    
    
    $
    111,836
    
    
    $
    116,710Depreciation from discontinued operations
    
    
    3,212
    
    
    
    10,817
    
    
    
    23,515Total depreciation expense
    
    $
    122,535
    
    
    $
    122,653
    
    
    $
    140,225
   18. Stock Based Compensation Plans
    F-30




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 18. Stock Based Compensation Plans  (continued)
 Stock Options
  2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedNo. Shares of
    
    
    Average
    
    
    No. Shares of
    
    
    Average
    
    
    No. Shares of
    
    
    AverageUnderlying
    
    
    Exercise
    
    
    Underlying
    
    
    Exercise
    
    
    Underlying
    
    
    ExerciseOptions
    
    
    Prices
    
    
    Options
    
    
    Prices
    
    
    Options
    
    
    PricesOutstanding at beginning of the year
    
    
    1,478,760
    
    
    $
    24.72
    
    
    
    1,911,544
    
    
    $
    22.72
    
    
    
    1,990,830
    
    
    $
    22.70Forfeited
    
    
    (13,503
    )
    
    $
    22.30
    
    
    
    (432,784
    )
    
    $
    15.91
    
    
    
    (79,286
    )
    
    $
    22.15Outstanding at end of year
    
    
    1,465,257
    
    
    $
    23.41
    
    
    
    1,478,760
    
    
    $
    24.72
    
    
    
    1,911,544
    
    
    $
    22.72Exercisable at end of year
    
    
    1,455,257
    
    
    $
    23.46
    
    
    
    1,333,760
    
    
    $
    24.24
    
    
    
    1,664,594
    
    
    $
    23.70
 Options Outstanding
    
    
    Options ExercisableNumber
    
    
    Wgtd. Avg.
    
    
    
    
    
    
    NumberRange of
    
    Outstanding
    
    
    Remaining
    
    
    Wgtd Avg.
    
    
    Exercisable
    
    
    Wgtd. Avg.Exercise Prices
    
    at 12/31/05
    
    
    Life
    
    
    Exercise Price
    
    
    at 12/31/05
    
    
    Exercise Price$15.62 to $22.56
    
    
    1,094,535
    
    
    
    3.39
    
    
    $
    21.03
    
    
    
    1,084,535
    
    
    $
    21.08$24.18 to $36.12
    
    
    305,722
    
    
    
    0.70
    
    
    $
    29.10
    
    
    
    305,722
    
    
    $
    29.10$36.63
    
    
    65,000
    
    
    
    1.47
    
    
    $
    36.63
    
    
    
    65,000
    
    
    $
    36.63$15.62 to $36.63
    
    
    1,465,257
    
    
    
    2.74
    
    
    $
    23.41
    
    
    
    1,455,257
    
    
    $
    23.46
  Restricted Stock
  F-31




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 18. Stock Based Compensation Plans  (continued)
 2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageFair Market
    
    
    
    
    
    
    Fair Market
    
    
    
    
    
    
    Fair MarketValue
    
    
    
    
    
    
    Value
    
    
    
    
    
    
    ValueNo. Shares
    
    
    at Grant
    
    
    No. Shares
    
    
    at Grant
    
    
    No. Shares
    
    
    at GrantOutstanding at beginning of the year
    
    
    1,187,606
    
    
    $
    17.54
    
    
    
    731,431
    
    
    $
    22.03
    
    
    
    633,681
    
    
    $
    23.73Granted(a):With immediate vesting(b)
    
    
    22,300
    
    
    $
    13.73
    
    
    
    26,500
    
    
    $
    10.00
    
    
    
    27,400
    
    
    $
    10.98With 4-year pro rata vesting
    
    
    319,300
    
    
    $
    12.52
    
    
    
    295,040
    
    
    $
    10.00
    
    
    
    
    
    
    
    Vesting within 12 months of grant
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    $
    12.47
    
    
    
    
    
    
    
    With 5-year pro rata vesting
    
    
    20,000
    
    
    $
    13.85
    
    
    
    110,000
    
    
    $
    12.25
    
    
    
    70,350
    
    
    $
    10.98Forfeited
    
    
    
    
    
    
    
    
    
    
    (25,365
    )
    
    $
    18.19
    
    
    
    
    
    
    
    Outstanding at end of year
    
    
    1,549,206
    
    
    $
    13.35
    
    
    
    1,187,606
    
    
    $
    17.54
    
    
    
    731,431
    
    
    $
    22.03Vested at end of year
    
    
    795,738
    
    
    $
    18.49
    
    
    
    558,151
    
    
    $
    20.52
    
    
    
    431,550
    
    
    $
    21.49
 
 (a)
    
    All shares granted are issued out of treasury except for 5,200, 6,300 and 6,900
of the restricted shares issued to directors during the years ended December 31, 2005,
2004 and 2003, respectively.(b)
    
    Shares awarded to directors. 19. Employee Benefits
   20. Segment Information
   Revenue
    
    
    Investment in Hotel Assets2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003California
    
    $
    216,039
    
    
    $
    196,071
    
    
    $
    189,737
    
    
    $
    715,815
    
    
    $
    727,375
    
    
    $
    677,381Texas
    
    
    188,288
    
    
    
    171,669
    
    
    
    163,349
    
    
    
    534,299
    
    
    
    674,590
    
    
    
    766,134Florida
    
    
    152,062
    
    
    
    137,917
    
    
    
    126,424
    
    
    
    535,009
    
    
    
    524,856
    
    
    
    515,640Georgia
    
    
    106,345
    
    
    
    96,111
    
    
    
    89,700
    
    
    
    294,976
    
    
    
    356,925
    
    
    
    359,004Other states
    
    
    522,668
    
    
    
    489,326
    
    
    
    457,869
    
    
    
    1,461,117
    
    
    
    1,559,156
    
    
    
    1,615,529Canada
    
    
    26,777
    
    
    
    24,780
    
    
    
    21,285
    
    
    
    65,286
    
    
    
    61,495
    
    
    
    56,276Total
    
    $
    1,212,179
    
    
    $
    1,115,874
    
    
    $
    1,048,364
    
    
    $
    3,606,502
    
    
    $
    3,904,397
    
    
    $
    3,989,964
 F-32




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 21. Recently Issued Statements of Financial Accounting Standards
   22. Quarterly Operating Results (unaudited)
  F-33




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 22. Quarterly Operating Results (unaudited)  (continued)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2005
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTotal revenues
    
    $
    284,434
    
    
    $
    317,999
    
    
    $
    309,885
    
    
    $
    299,861Net income (loss) from continuing operations
    
    $
    (5,755
    )
    
    $
    10,358
    
    
    $
    (889
    )
    
    $
    (266,620
    )Discontinued operations
    
    $
    (2,259
    )
    
    $
    (7
    )
    
    $
    12,147
    
    
    $
    1,410Net income (loss) (a)
    
    $
    (8,014
    )
    
    $
    10,351
    
    
    $
    11,258
    
    
    $
    (265,210
    )Net loss applicable to common stockholders
    
    $
    (18,105
    )
    
    $
    (4,656
    )
    
    $
    105
    
    
    $
    (274,889
    )Comprehensive loss
    
    $
    (6,631
    )
    
    $
    8,722
    
    
    $
    15,169
    
    
    $
    (265,053
    )Diluted per common share data:Net loss from continuing operations
    
    $
    (0.27
    )
    
    $
    (0.08
    )
    
    $
    (0.20
    )
    
    $
    (4.65
    )Discontinued operations
    
    $
    (0.03
    )
    
    $
    
    
    
    $
    0.20
    
    
    $
    0.02Net loss
    
    $
    (0.30
    )
    
    $
    (0.08
    )
    
    $
    
    
    
    $
    (4.62
    )Weighted average common shares outstanding
    
    
    59,416
    
    
    
    59,404
    
    
    
    59,442
    
    
    
    59,453
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2004
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTotal revenues
    
    $
    270,465
    
    
    $
    292,555
    
    
    $
    284,889
    
    
    $
    267,965Net income (loss) from continuing operations
    
    $
    (17,088
    )
    
    $
    (32,167
    )
    
    $
    (9,182
    )
    
    $
    (23,097
    )Discontinued operations
    
    $
    (3,611
    )
    
    $
    494
    
    
    $
    (27,803
    )
    
    $
    12,327Net loss (b)
    
    $
    (20,699
    )
    
    $
    (31,673
    )
    
    $
    (36,985
    )
    
    $
    (10,770
    )Net loss applicable to common stockholders
    
    $
    (27,425
    )
    
    $
    (40,643
    )
    
    $
    (46,328
    )
    
    $
    (20,861
    )Comprehensive loss
    
    $
    (21,160
    )
    
    $
    (32,182
    )
    
    $
    (32,496
    )
    
    $
    (7,987
    )Diluted per common share data:Net loss from continuing operations
    
    $
    (0.41
    )
    
    $
    (0.70
    )
    
    $
    (0.31
    )
    
    $
    (0.56
    )Discontinued operations
    
    $
    (0.06
    )
    
    $
    0.01
    
    
    $
    (0.47
    )
    
    $
    0.21Net loss
    
    $
    (0.47
    )
    
    $
    (0.69
    )
    
    $
    (0.78
    )
    
    $
    (0.35
    )Weighted average common shares outstanding
    
    
    58,937
    
    
    
    58,950
    
    
    
    59,075
    
    
    
    59,192
 
 (a)
    
    The fourth quarter net loss in 2005 includes an impairment charge of $263
million.(b)
    
    The third and fourth quarters net loss in 2004 include impairment charges of
$33.0 million and $5.3 million, respectively. The second, third and fourth quarters
net loss in 2004 also includes loss from earlier retirement of debt of $31.2 million,
$12.9 million and $5.8 million, respectively.  F-34




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
 
 Schedule III  Real Estate and Accumulated Depreciation
 as of December 31, 2005
 (in thousands)
 Cost Capitalized
    
    
    Gross Amounts at WhichInitial Cost
    
    
    Subsequent to Acquisition
    
    
    Carried at Close of Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Life UponBuildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    
    and
    
    
    
    
    
    
    and
    
    
    
    
    
    
    Buildings &
    
    
    Year
    
    
    Date
    
    
    DepreciationLocation
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Improvements
    
    
    Opened
    
    
    Acquired
    
    
    is ComputedBirmingham, AL (1)
    
    $
    16,059
    
    
    $
    2,843
    
    
    $
    29,286
    
    
    $
    0
    
    
    $
    1,091
    
    
    $
    2,843
    
    
    $
    30,377
    
    
    $
    33,220
    
    
    $
    7,656
    
    
    
    1987
    
    
    
    1/3/1996
    
    
    15 - 40 YrsMontgomery East I-85, AL (2)
    
    
    0
    
    
    
    830
    
    
    
    7,222
    
    
    
    9
    
    
    
    2,801
    
    
    
    839
    
    
    
    10,023
    
    
    
    10,862
    
    
    
    1,954
    
    
    
    1964
    
    
    
    7/28/1998
    
    
    15 - 40 YrsPhoenix  Biltmore, AZ (1)
    
    
    20,864
    
    
    
    0
    
    
    
    38,998
    
    
    
    4,695
    
    
    
    1,572
    
    
    
    4,695
    
    
    
    40,570
    
    
    
    45,265
    
    
    
    10,215
    
    
    
    1985
    
    
    
    1/3/1996
    
    
    15 - 40 YrsPhoenix Crescent Hotel, AZ (3)
    
    
    24,835
    
    
    
    3,608
    
    
    
    29,583
    
    
    
    0
    
    
    
    1,403
    
    
    
    3,608
    
    
    
    30,986
    
    
    
    34,594
    
    
    
    6,463
    
    
    
    1986
    
    
    
    6/30/1997
    
    
    15 - 40 YrsPhoenix Tempe, AZ (1)
    
    
    9,736
    
    
    
    3,951
    
    
    
    34,371
    
    
    
    0
    
    
    
    1,048
    
    
    
    3,951
    
    
    
    35,419
    
    
    
    39,370
    
    
    
    6,757
    
    
    
    1986
    
    
    
    5/4/1998
    
    
    15 - 40 YrsDana Point  Doheny Beach, CA (4)
    
    
    0
    
    
    
    1,787
    
    
    
    15,545
    
    
    
    0
    
    
    
    1,410
    
    
    
    1,787
    
    
    
    16,955
    
    
    
    18,742
    
    
    
    3,694
    
    
    
    1992
    
    
    
    2/21/1997
    
    
    15 - 40 YrsIrvine  Orange County Airport (Newport Beach),
CA (5)
    
    
    0
    
    
    
    4,953
    
    
    
    43,109
    
    
    
    0
    
    
    
    2,118
    
    
    
    4,953
    
    
    
    45,227
    
    
    
    50,180
    
    
    
    8,533
    
    
    
    1986
    
    
    
    7/28/1998
    
    
    15 - 40 YrsLos Angeles  Anaheim (Located near Disneyland
Park ®), CA (1)
    
    
    9,032
    
    
    
    2,548
    
    
    
    14,832
    
    
    
    0
    
    
    
    1,273
    
    
    
    2,548
    
    
    
    16,105
    
    
    
    18,653
    
    
    
    4,173
    
    
    
    1987
    
    
    
    1/3/1996
    
    
    15 - 40 YrsLos Angeles International Airport  South, CA (1)
    
    
    0
    
    
    
    2,660
    
    
    
    17,997
    
    
    
    0
    
    
    
    1,246
    
    
    
    2,660
    
    
    
    19,243
    
    
    
    21,903
    
    
    
    5,588
    
    
    
    1985
    
    
    
    3/27/1996
    
    
    15 - 40 YrsMilpitas  Silicon Valley, CA (1)
    
    
    27,658
    
    
    
    4,021
    
    
    
    23,677
    
    
    
    0
    
    
    
    1,942
    
    
    
    4,021
    
    
    
    25,619
    
    
    
    29,640
    
    
    
    6,500
    
    
    
    1987
    
    
    
    1/3/1996
    
    
    15 - 40 YrsMilpitas  San Jose North (Milpitas  Silicon Valley),
CA (5)
    
    
    0
    
    
    
    4,127
    
    
    
    35,917
    
    
    
    0
    
    
    
    6,040
    
    
    
    4,127
    
    
    
    41,957
    
    
    
    46,084
    
    
    
    8,157
    
    
    
    1987
    
    
    
    7/28/1998
    
    
    15 - 40 YrsNapa Valley, CA (1)
    
    
    14,530
    
    
    
    3,287
    
    
    
    14,205
    
    
    
    0
    
    
    
    1,280
    
    
    
    3,287
    
    
    
    15,485
    
    
    
    18,772
    
    
    
    3,851
    
    
    
    1985
    
    
    
    5/8/1996
    
    
    15 - 40 YrsOxnard  Mandalay Beach Resort & Conference
Center, CA (1)
    
    
    0
    
    
    
    2,930
    
    
    
    22,125
    
    
    
    1
    
    
    
    2,684
    
    
    
    2,931
    
    
    
    24,809
    
    
    
    27,740
    
    
    
    5,959
    
    
    
    1986
    
    
    
    5/8/1996
    
    
    15 - 40 YrsPalm Desert  Palm Desert Resort, CA (1)
    
    
    0
    
    
    
    2,368
    
    
    
    20,598
    
    
    
    4
    
    
    
    2,031
    
    
    
    2,372
    
    
    
    22,629
    
    
    
    25,001
    
    
    
    4,358
    
    
    
    1984
    
    
    
    5/4/1998
    
    
    15 - 40 YrsPleasanton (San Ramon Area), CA (5)
    
    
    0
    
    
    
    3,152
    
    
    
    27,428
    
    
    
    0
    
    
    
    278
    
    
    
    3,152
    
    
    
    27,706
    
    
    
    30,858
    
    
    
    5,138
    
    
    
    1986
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSan Diego  On the Bay, CA (2)
    
    
    0
    
    
    
    0
    
    
    
    68,229
    
    
    
    0
    
    
    
    4,409
    
    
    
    0
    
    
    
    72,638
    
    
    
    72,638
    
    
    
    14,518
    
    
    
    1965
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSan Francisco  Airport  Burlingame, CA (1)
    
    
    0
    
    
    
    0
    
    
    
    39,929
    
    
    
    0
    
    
    
    719
    
    
    
    0
    
    
    
    40,648
    
    
    
    40,648
    
    
    
    10,286
    
    
    
    1986
    
    
    
    11/6/1995
    
    
    15 - 40 YrsSan Francisco  Airport  South San Francisco, CA (1)
    
    
    24,390
    
    
    
    3,418
    
    
    
    31,737
    
    
    
    0
    
    
    
    1,984
    
    
    
    3,418
    
    
    
    33,721
    
    
    
    37,139
    
    
    
    8,354
    
    
    
    1988
    
    
    
    1/3/1996
    
    
    15 - 40 YrsSan Francisco  Fishermans Wharf, CA (2)
    
    
    0
    
    
    
    0
    
    
    
    61,883
    
    
    
    0
    
    
    
    1,642
    
    
    
    0
    
    
    
    63,525
    
    
    
    63,525
    
    
    
    16,358
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSan Francisco  Union Square, CA (5)
    
    
    0
    
    
    
    8,466
    
    
    
    73,684
    
    
    
    (453
    )
    
    
    3,754
    
    
    
    8,013
    
    
    
    77,438
    
    
    
    85,451
    
    
    
    14,372
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSanta Barbara, CA (2)
    
    
    0
    
    
    
    1,683
    
    
    
    14,647
    
    
    
    0
    
    
    
    739
    
    
    
    1,683
    
    
    
    15,386
    
    
    
    17,069
    
    
    
    2,762
    
    
    
    1969
    
    
    
    7/28/1998
    
    
    15-40 YrsSanta Monica, CA (2)
    
    
    0
    
    
    
    10,200
    
    
    
    16,580
    
    
    
    0
    
    
    
    214
    
    
    
    10,200
    
    
    
    16,794
    
    
    
    26,994
    
    
    
    766
    
    
    
    1967
    
    
    
    3/11/2004
    
    
    15-40 YrsToronto  Airport, Canada (7)
    
    
    0
    
    
    
    0
    
    
    
    21,041
    
    
    
    0
    
    
    
    10,906
    
    
    
    0
    
    
    
    31,947
    
    
    
    31,947
    
    
    
    6,843
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsToronto  Yorkdale, Canada (2)
    
    
    0
    
    
    
    1,566
    
    
    
    13,633
    
    
    
    477
    
    
    
    9,835
    
    
    
    2,043
    
    
    
    23,468
    
    
    
    25,511
    
    
    
    5,439
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDenver, CO (6)
    
    
    4,882
    
    
    
    2,432
    
    
    
    21,158
    
    
    
    0
    
    
    
    922
    
    
    
    2,432
    
    
    
    22,080
    
    
    
    24,512
    
    
    
    4,175
    
    
    
    1989
    
    
    
    3/15/1998
    
    
    15 - 40 YrsStamford, CT (7)
    
    
    0
    
    
    
    0
    
    
    
    37,154
    
    
    
    0
    
    
    
    4,029
    
    
    
    0
    
    
    
    41,183
    
    
    
    41,183
    
    
    
    7,438
    
    
    
    1984
    
    
    
    7/28/1998
    
    
    15 - 40 YrsWilmington, DE (6)
    
    
    10,740
    
    
    
    1,379
    
    
    
    12,487
    
    
    
    0
    
    
    
    9,940
    
    
    
    1,379
    
    
    
    22,427
    
    
    
    23,806
    
    
    
    4,213
    
    
    
    1972
    
    
    
    3/20/1998
    
    
    15 - 40 YrsBoca Raton, FL (1)
    
    
    5,370
    
    
    
    1,868
    
    
    
    16,253
    
    
    
    0
    
    
    
    343
    
    
    
    1,868
    
    
    
    16,596
    
    
    
    18,464
    
    
    
    4,269
    
    
    
    1989
    
    
    
    2/28/1996
    
    
    15 - 40 YrsCocoa Beach  Oceanfront, FL (2)
    
    
    0
    
    
    
    2,285
    
    
    
    19,892
    
    
    
    0
    
    
    
    13,020
    
    
    
    2,285
    
    
    
    32,912
    
    
    
    35,197
    
    
    
    7,159
    
    
    
    1960
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDeerfield Beach, FL (1)
    
    
    12,196
    
    
    
    4,523
    
    
    
    29,443
    
    
    
    68
    
    
    
    1,463
    
    
    
    4,591
    
    
    
    30,906
    
    
    
    35,497
    
    
    
    7,830
    
    
    
    1987
    
    
    
    1/3/1996
    
    
    15 - 40 Yrs
 F-35




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##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2005
(in thousands)
 Cost Capitalized
    
    
    Gross Amounts at WhichInitial Cost
    
    
    Subsequent to Acquisition
    
    
    Carried at Close of Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Life UponBuildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    
    and
    
    
    
    
    
    
    and
    
    
    
    
    
    
    Buildings &
    
    
    Year
    
    
    Date
    
    
    DepreciationLocation
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Improvements
    
    
    Opened
    
    
    Acquired
    
    
    is ComputedFt. Lauderdale  17th Street, FL (1)
    
    
    21,285
    
    
    
    5,329
    
    
    
    47,850
    
    
    
    (163
    )
    
    
    2,430
    
    
    
    5,166
    
    
    
    50,280
    
    
    
    55,446
    
    
    
    12,767
    
    
    
    1986
    
    
    
    1/3/1996
    
    
    15 - 40 YrsFt. Lauderdale (Cypress Creek), FL (8)
    
    
    11,958
    
    
    
    3,009
    
    
    
    26,177
    
    
    
    0
    
    
    
    1,666
    
    
    
    3,009
    
    
    
    27,843
    
    
    
    30,852
    
    
    
    5,264
    
    
    
    1986
    
    
    
    5/4/1998
    
    
    15 - 40 YrsJacksonville  Baymeadows, FL (1)
    
    
    13,859
    
    
    
    1,130
    
    
    
    9,608
    
    
    
    0
    
    
    
    6,467
    
    
    
    1,130
    
    
    
    16,075
    
    
    
    17,205
    
    
    
    3,949
    
    
    
    1986
    
    
    
    7/28/1994
    
    
    15 - 40 YrsMiami International Airport, FL (1)
    
    
    17,206
    
    
    
    4,135
    
    
    
    24,950
    
    
    
    0
    
    
    
    1,385
    
    
    
    4,135
    
    
    
    26,335
    
    
    
    30,470
    
    
    
    6,699
    
    
    
    1983
    
    
    
    7/28/1998
    
    
    15 - 40 YrsMiami International Airport (LeJeune Center), FL (5)
    
    
    0
    
    
    
    0
    
    
    
    26,007
    
    
    
    0
    
    
    
    1,355
    
    
    
    0
    
    
    
    27,362
    
    
    
    27,362
    
    
    
    5,066
    
    
    
    1987
    
    
    
    1/3/1996
    
    
    15 - 40 YrsOrlando  International Airport, FL (7)
    
    
    9,567
    
    
    
    2,549
    
    
    
    22,188
    
    
    
    0
    
    
    
    1,903
    
    
    
    2,549
    
    
    
    24,091
    
    
    
    26,640
    
    
    
    4,688
    
    
    
    1984
    
    
    
    7/28/1998
    
    
    15 - 40 YrsOrlando  International Drive  Resort, FL (2)
    
    
    0
    
    
    
    5,108
    
    
    
    44,460
    
    
    
    0
    
    
    
    9,442
    
    
    
    5,108
    
    
    
    53,902
    
    
    
    59,010
    
    
    
    10,641
    
    
    
    1972
    
    
    
    7/28/1998
    
    
    15 - 40 YrsOrlando International Drive/Convention Center,
FL (1)
    
    
    23,754
    
    
    
    1,632
    
    
    
    13,870
    
    
    
    0
    
    
    
    1,349
    
    
    
    1,632
    
    
    
    15,219
    
    
    
    16,851
    
    
    
    4,318
    
    
    
    1985
    
    
    
    7/28/1994
    
    
    15 - 40 YrsOrlando  Nikki Bird (Maingate  Disney World Area®,
FL (2)
    
    
    0
    
    
    
    0
    
    
    
    31,457
    
    
    
    0
    
    
    
    6,656
    
    
    
    0
    
    
    
    38,113
    
    
    
    38,113
    
    
    
    6,379
    
    
    
    1974
    
    
    
    7/28/1998
    
    
    15 - 40 YrsOrlando (North), FL (1)
    
    
    0
    
    
    
    1,673
    
    
    
    14,218
    
    
    
    6
    
    
    
    7,012
    
    
    
    1,679
    
    
    
    21,230
    
    
    
    22,909
    
    
    
    5,599
    
    
    
    1985
    
    
    
    7/28/1994
    
    
    15 - 40 YrsOrlando- Walt Disney WorldResort®, FL (4)
    
    
    0
    
    
    
    0
    
    
    
    28,092
    
    
    
    0
    
    
    
    186
    
    
    
    0
    
    
    
    28,278
    
    
    
    28,278
    
    
    
    5,569
    
    
    
    1987
    
    
    
    7/28/1997
    
    
    15 - 40 YrsTampa  On Tampa Bay, FL (4)
    
    
    13,522
    
    
    
    2,142
    
    
    
    18,639
    
    
    
    1
    
    
    
    2,010
    
    
    
    2,143
    
    
    
    20,649
    
    
    
    22,792
    
    
    
    4,348
    
    
    
    1986
    
    
    
    7/28/1997
    
    
    15 - 40 YrsAtlanta  Airport, GA (5)
    
    
    0
    
    
    
    0
    
    
    
    40,734
    
    
    
    0
    
    
    
    322
    
    
    
    0
    
    
    
    41,056
    
    
    
    41,056
    
    
    
    9,127
    
    
    
    1975
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAtlanta   Airport, GA (1)
    
    
    13,181
    
    
    
    0
    
    
    
    22,342
    
    
    
    2,568
    
    
    
    1,546
    
    
    
    2,568
    
    
    
    23,888
    
    
    
    26,456
    
    
    
    4,446
    
    
    
    1989
    
    
    
    5/4/1998
    
    
    15 - 40 YrsAtlanta  Airport  North, GA (2)
    
    
    0
    
    
    
    0
    
    
    
    34,353
    
    
    
    0
    
    
    
    538
    
    
    
    0
    
    
    
    34,891
    
    
    
    34,891
    
    
    
    7,533
    
    
    
    1967
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAtlanta  Buckhead, GA (1)
    
    
    35,516
    
    
    
    7,303
    
    
    
    38,996
    
    
    
    (300
    )
    
    
    1,857
    
    
    
    7,003
    
    
    
    40,853
    
    
    
    47,856
    
    
    
    9,178
    
    
    
    1988
    
    
    
    10/17/1996
    
    
    15 - 40 YrsAtlanta  Galleria, GA (8)
    
    
    16,557
    
    
    
    5,052
    
    
    
    28,507
    
    
    
    0
    
    
    
    1,071
    
    
    
    5,052
    
    
    
    29,578
    
    
    
    34,630
    
    
    
    6,278
    
    
    
    1990
    
    
    
    6/30/1997
    
    
    15 - 40 YrsAtlanta  Gateway-Atlanta Airport, GA (3)
    
    
    0
    
    
    
    5,113
    
    
    
    22,857
    
    
    
    1
    
    
    
    258
    
    
    
    5,114
    
    
    
    23,115
    
    
    
    28,229
    
    
    
    4,911
    
    
    
    1986
    
    
    
    6/30/1997
    
    
    15 - 40 YrsAtlanta  Perimeter  Dunwoody, GA (7)
    
    
    0
    
    
    
    0
    
    
    
    20,449
    
    
    
    0
    
    
    
    468
    
    
    
    0
    
    
    
    20,917
    
    
    
    20,917
    
    
    
    3,878
    
    
    
    1985
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAtlanta  Powers Ferry, GA (5)
    
    
    0
    
    
    
    3,391
    
    
    
    29,517
    
    
    
    0
    
    
    
    770
    
    
    
    3,391
    
    
    
    30,287
    
    
    
    33,678
    
    
    
    5,635
    
    
    
    1981
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAtlanta  South (I-75 & US 41), GA (2)
    
    
    0
    
    
    
    859
    
    
    
    7,475
    
    
    
    0
    
    
    
    251
    
    
    
    859
    
    
    
    7,726
    
    
    
    8,585
    
    
    
    1,420
    
    
    
    1973
    
    
    
    7/28/1998
    
    
    15 - 40 YrsBrunswick, GA (1)
    
    
    0
    
    
    
    705
    
    
    
    6,067
    
    
    
    0
    
    
    
    324
    
    
    
    705
    
    
    
    6,391
    
    
    
    7,096
    
    
    
    1,606
    
    
    
    1988
    
    
    
    7/19/1995
    
    
    15 - 40 YrsColumbus  North I-185 at Peachtree Mall, GA (2)
    
    
    0
    
    
    
    0
    
    
    
    6,978
    
    
    
    0
    
    
    
    2,058
    
    
    
    0
    
    
    
    9,036
    
    
    
    9,036
    
    
    
    2,015
    
    
    
    1969
    
    
    
    7/28/1998
    
    
    15 - 40 YrsChicago  The Allerton, IL (5)
    
    
    0
    
    
    
    3,298
    
    
    
    28,723
    
    
    
    15,589
    
    
    
    28,337
    
    
    
    18,887
    
    
    
    57,060
    
    
    
    75,947
    
    
    
    13,004
    
    
    
    1923
    
    
    
    7/28/1998
    
    
    15 - 40 YrsChicago  Northshore/Deerfield (Northbrook), IL (1)
    
    
    15,390
    
    
    
    2,305
    
    
    
    20,054
    
    
    
    0
    
    
    
    821
    
    
    
    2,305
    
    
    
    20,875
    
    
    
    23,180
    
    
    
    4,886
    
    
    
    1987
    
    
    
    6/20/1996
    
    
    15 - 40 YrsChicago OHare Airport, IL (3)
    
    
    22,996
    
    
    
    8,178
    
    
    
    37,043
    
    
    
    0
    
    
    
    1,993
    
    
    
    8,178
    
    
    
    39,036
    
    
    
    47,214
    
    
    
    8,116
    
    
    
    1994
    
    
    
    6/30/1997
    
    
    15 - 40 YrsIndianapolis North, IN (1)
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    5,125
    
    
    
    13,929
    
    
    
    5,125
    
    
    
    13,929
    
    
    
    19,054
    
    
    
    7,079
    
    
    
    1986
    
    
    
    8/1/1996
    
    
    15 - 40 YrsLexington, KY (8)
    
    
    6,439
    
    
    
    0
    
    
    
    21,644
    
    
    
    2,488
    
    
    
    943
    
    
    
    2,488
    
    
    
    22,587
    
    
    
    25,075
    
    
    
    4,232
    
    
    
    1989
    
    
    
    5/4/1998
    
    
    15 - 40 YrsLexington  Lexington Green, KY (10)
    
    
    15,586
    
    
    
    1,955
    
    
    
    13,604
    
    
    
    0
    
    
    
    257
    
    
    
    1,955
    
    
    
    13,861
    
    
    
    15,816
    
    
    
    3,402
    
    
    
    1987
    
    
    
    1/10/1996
    
    
    15 - 40 YrsBaton Rouge, LA (1)
    
    
    10,324
    
    
    
    2,350
    
    
    
    19,092
    
    
    
    1
    
    
    
    1,163
    
    
    
    2,351
    
    
    
    20,255
    
    
    
    22,606
    
    
    
    5,172
    
    
    
    1985
    
    
    
    1/3/1996
    
    
    15 - 40 YrsNew Orleans, LA (1)
    
    
    30,316
    
    
    
    3,647
    
    
    
    31,993
    
    
    
    0
    
    
    
    7,394
    
    
    
    3,647
    
    
    
    39,387
    
    
    
    43,034
    
    
    
    11,116
    
    
    
    1984
    
    
    
    12/1/1994
    
    
    15 - 40 YrsNew Orleans  French Quarter, LA (2)
    
    
    0
    
    
    
    0
    
    
    
    50,732
    
    
    
    0
    
    
    
    8,432
    
    
    
    0
    
    
    
    59,164
    
    
    
    59,164
    
    
    
    10,462
    
    
    
    1969
    
    
    
    7/28/1998
    
    
    15 - 40 Yrs
 F-36




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2005
(in thousands)
 Cost Capitalized
    
    
    Gross Amounts at WhichInitial Cost
    
    
    Subsequent to Acquisition
    
    
    Carried at Close of Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Life UponBuildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Buildings
    
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    
    and
    
    
    
    
    
    
    and
    
    
    
    
    
    
    Buildings &
    
    
    Year
    
    
    Date
    
    
    DepreciationLocation
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Improvements
    
    
    Opened
    
    
    Acquired
    
    
    is ComputedBoston  Government Center, MA (7)
    
    
    0
    
    
    
    0
    
    
    
    45,192
    
    
    
    0
    
    
    
    5,974
    
    
    
    0
    
    
    
    51,166
    
    
    
    51,166
    
    
    
    10,990
    
    
    
    1968
    
    
    
    7/28/1998
    
    
    15 - 40 YrsBoston  Marlborough, MA (1)
    
    
    19,035
    
    
    
    948
    
    
    
    8,143
    
    
    
    761
    
    
    
    13,345
    
    
    
    1,709
    
    
    
    21,488
    
    
    
    23,197
    
    
    
    4,861
    
    
    
    1988
    
    
    
    6/30/1995
    
    
    15 - 40 YrsBaltimore  BWI Airport, MD (1)
    
    
    23,551
    
    
    
    2,568
    
    
    
    22,433
    
    
    
    (2
    )
    
    
    1,488
    
    
    
    2,566
    
    
    
    23,921
    
    
    
    26,487
    
    
    
    5,298
    
    
    
    1987
    
    
    
    3/20/1997
    
    
    15 - 40 YrsTroy, MI (1)
    
    
    6,737
    
    
    
    2,968
    
    
    
    25,905
    
    
    
    0
    
    
    
    1,668
    
    
    
    2,968
    
    
    
    27,573
    
    
    
    30,541
    
    
    
    6,081
    
    
    
    1987
    
    
    
    3/20/1997
    
    
    15 - 40 YrsMinneapolis  Airport, MN (1)
    
    
    20,393
    
    
    
    5,417
    
    
    
    36,508
    
    
    
    24
    
    
    
    686
    
    
    
    5,441
    
    
    
    37,194
    
    
    
    42,635
    
    
    
    9,483
    
    
    
    1986
    
    
    
    11/6/1995
    
    
    15 - 40 YrsMinneapolis  Bloomington, MN (1)
    
    
    10,720
    
    
    
    2,038
    
    
    
    17,731
    
    
    
    0
    
    
    
    662
    
    
    
    2,038
    
    
    
    18,393
    
    
    
    20,431
    
    
    
    4,066
    
    
    
    1980
    
    
    
    2/1/1997
    
    
    15 - 40 YrsMinneapolis -Downtown, MN (1)
    
    
    0
    
    
    
    818
    
    
    
    16,820
    
    
    
    0
    
    
    
    1,134
    
    
    
    818
    
    
    
    17,954
    
    
    
    18,772
    
    
    
    4,201
    
    
    
    1984
    
    
    
    11/15/1995
    
    
    15 - 40 YrsSt Paul- Downtown, MN (1)
    
    
    5,196
    
    
    
    1,156
    
    
    
    17,315
    
    
    
    0
    
    
    
    391
    
    
    
    1,156
    
    
    
    17,706
    
    
    
    18,862
    
    
    
    4,658
    
    
    
    1983
    
    
    
    11/15/1995
    
    
    15 - 40 YrsKansas City NE I-435 North (At Worlds of Fun),
MO (2)
    
    
    0
    
    
    
    967
    
    
    
    8,415
    
    
    
    0
    
    
    
    257
    
    
    
    967
    
    
    
    8,672
    
    
    
    9,639
    
    
    
    2,047
    
    
    
    1975
    
    
    
    7/28/1998
    
    
    15 - 40 YrsCharlotte SouthPark, NC (4)
    
    
    0
    
    
    
    1,458
    
    
    
    12,681
    
    
    
    1
    
    
    
    2,221
    
    
    
    1,459
    
    
    
    14,902
    
    
    
    16,361
    
    
    
    1,372
    
    
    
    N/A
    
    
    
    7/12/2002
    
    
    15 - 40 YrsRaleigh, NC (4)
    
    
    13,522
    
    
    
    2,124
    
    
    
    18,476
    
    
    
    0
    
    
    
    1,304
    
    
    
    2,124
    
    
    
    19,780
    
    
    
    21,904
    
    
    
    4,077
    
    
    
    1987
    
    
    
    7/28/1997
    
    
    15 - 40 YrsOmaha  Central, NE (9)
    
    
    0
    
    
    
    514
    
    
    
    4,477
    
    
    
    0
    
    
    
    948
    
    
    
    514
    
    
    
    5,425
    
    
    
    5,939
    
    
    
    1,075
    
    
    
    1965
    
    
    
    7/28/1998
    
    
    15 - 40 YrsOmaha  Central (I-80), NE (2)
    
    
    0
    
    
    
    1,782
    
    
    
    15,513
    
    
    
    0
    
    
    
    3,788
    
    
    
    1,782
    
    
    
    19,301
    
    
    
    21,083
    
    
    
    3,394
    
    
    
    1991
    
    
    
    7/28/1998
    
    
    15 - 40 YrsOmaha  Old Mill, NE (5)
    
    
    0
    
    
    
    971
    
    
    
    8,449
    
    
    
    0
    
    
    
    5,162
    
    
    
    971
    
    
    
    13,611
    
    
    
    14,582
    
    
    
    3,297
    
    
    
    1974
    
    
    
    7/28/1998
    
    
    15 - 40 YrsPiscataway-Somerset, NJ (1)
    
    
    19,246
    
    
    
    1,755
    
    
    
    17,563
    
    
    
    0
    
    
    
    1,280
    
    
    
    1,755
    
    
    
    18,843
    
    
    
    20,598
    
    
    
    4,568
    
    
    
    1988
    
    
    
    1/10/1996
    
    
    15 - 40 YrsTulsa  I-44, OK (1)
    
    
    0
    
    
    
    525
    
    
    
    7,344
    
    
    
    0
    
    
    
    799
    
    
    
    525
    
    
    
    8,143
    
    
    
    8,668
    
    
    
    3,200
    
    
    
    1985
    
    
    
    7/28/1994
    
    
    15 - 40 YrsPhiladelphia -Center City, PA (5)
    
    
    0
    
    
    
    5,759
    
    
    
    50,127
    
    
    
    (452
    )
    
    
    (3,030
    )
    
    
    5,307
    
    
    
    47,097
    
    
    
    52,404
    
    
    
    8,856
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsPhiladelphia Historic District, PA (2)
    
    
    0
    
    
    
    3,164
    
    
    
    27,535
    
    
    
    0
    
    
    
    6,580
    
    
    
    3,164
    
    
    
    34,115
    
    
    
    37,279
    
    
    
    7,148
    
    
    
    1972
    
    
    
    7/28/1998
    
    
    15 - 40 YrsPhiladelphia Society Hill, PA (3)
    
    
    31,274
    
    
    
    4,542
    
    
    
    45,121
    
    
    
    0
    
    
    
    2,099
    
    
    
    4,542
    
    
    
    47,220
    
    
    
    51,762
    
    
    
    9,783
    
    
    
    1986
    
    
    
    10/1/1997
    
    
    15 - 40 YrsPittsburgh at University Center (Oakland), PA (7)
    
    
    15,500
    
    
    
    0
    
    
    
    25,031
    
    
    
    0
    
    
    
    1,843
    
    
    
    0
    
    
    
    26,874
    
    
    
    26,874
    
    
    
    5,239
    
    
    
    1988
    
    
    
    11/1/1998
    
    
    15 - 40 YrsCharleston -Mills House (Historic Downtown), SC
(2)
    
    
    20,183
    
    
    
    3,251
    
    
    
    28,295
    
    
    
    0
    
    
    
    488
    
    
    
    3,251
    
    
    
    28,783
    
    
    
    32,034
    
    
    
    5,308
    
    
    
    1982
    
    
    
    7/28/1998
    
    
    15 - 40 YrsMyrtle Beach  At Kingston Plantation, SC (1)
    
    
    0
    
    
    
    2,940
    
    
    
    24,988
    
    
    
    0
    
    
    
    2,374
    
    
    
    2,940
    
    
    
    27,362
    
    
    
    30,302
    
    
    
    6,492
    
    
    
    1987
    
    
    
    12/5/1996
    
    
    15 - 40 YrsMyrtle Beach Resort (15)
    
    
    0
    
    
    
    12,000
    
    
    
    17,689
    
    
    
    6
    
    
    
    6,155
    
    
    
    12,006
    
    
    
    23,844
    
    
    
    35,850
    
    
    
    4,567
    
    
    
    1974
    
    
    
    7/23/2002
    
    
    15 - 40 YrsKnoxville  Central At Papermill Road, TN (2)
    
    
    0
    
    
    
    0
    
    
    
    11,518
    
    
    
    0
    
    
    
    1,716
    
    
    
    0
    
    
    
    13,234
    
    
    
    13,234
    
    
    
    2,491
    
    
    
    1966
    
    
    
    7/28/1998
    
    
    15 - 40 YrsNashville- Airport/Opryland Area, TN (1)
    
    
    0
    
    
    
    1,118
    
    
    
    9,506
    
    
    
    0
    
    
    
    686
    
    
    
    1,118
    
    
    
    10,192
    
    
    
    11,310
    
    
    
    3,479
    
    
    
    1985
    
    
    
    7/28/1994
    
    
    15 - 40 YrsNashville  Opryland/Airport (Briley Parkway),
TN (7)
    
    
    0
    
    
    
    0
    
    
    
    27,734
    
    
    
    0
    
    
    
    2,340
    
    
    
    0
    
    
    
    30,074
    
    
    
    30,074
    
    
    
    6,428
    
    
    
    1981
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAmarillo  I-40, TX (2)
    
    
    0
    
    
    
    0
    
    
    
    5,754
    
    
    
    0
    
    
    
    3,031
    
    
    
    0
    
    
    
    8,785
    
    
    
    8,785
    
    
    
    1,797
    
    
    
    1970
    
    
    
    7/28/1998
    
    
    15 - 40 YrsAustin, TX (4)
    
    
    9,389
    
    
    
    2,508
    
    
    
    21,908
    
    
    
    0
    
    
    
    2,202
    
    
    
    2,508
    
    
    
    24,110
    
    
    
    26,618
    
    
    
    5,224
    
    
    
    1987
    
    
    
    3/20/1997
    
    
    15 - 40 YrsAustin -Town Lake (Downtown Area), TX (2)
    
    
    0
    
    
    
    0
    
    
    
    21,433
    
    
    
    0
    
    
    
    966
    
    
    
    0
    
    
    
    22,399
    
    
    
    22,399
    
    
    
    4,163
    
    
    
    1967
    
    
    
    7/28/1998
    
    
    15 - 40 YrsCorpus Christi, TX (1)
    
    
    4,956
    
    
    
    1,113
    
    
    
    9,618
    
    
    
    51
    
    
    
    2,411
    
    
    
    1,164
    
    
    
    12,029
    
    
    
    13,193
    
    
    
    2,891
    
    
    
    1984
    
    
    
    7/19/1995
    
    
    15 - 40 Yrs
 F-37




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2005
(in thousands)
 Cost Capitalized
    
    
    Gross Amounts at WhichInitial Cost
    
    
    Subsequent to Acquisition
    
    
    Carried at Close of Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Life UponBuildings
    
    
    
    
    
    
    Buildings
    
    
    Depreciation
    
    
    Buildings
    
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    
    and
    
    
    
    
    
    
    and
    
    
    
    
    
    
    Buildings &
    
    
    Year
    
    
    Date
    
    
    DepreciationLocation
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Improvements
    
    
    Opened
    
    
    Acquired
    
    
    is ComputedDallas, TX (5)
    
    
    0
    
    
    
    0
    
    
    
    30,346
    
    
    
    5,603
    
    
    
    439
    
    
    
    5,603
    
    
    
    30,785
    
    
    
    36,388
    
    
    
    5,681
    
    
    
    1981
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDallas  At Campbell Center, TX (6)
    
    
    0
    
    
    
    3,208
    
    
    
    27,907
    
    
    
    0
    
    
    
    1,822
    
    
    
    3,208
    
    
    
    29,729
    
    
    
    32,937
    
    
    
    4,691
    
    
    
    1982
    
    
    
    5/29/1998
    
    
    15 - 40 YrsDallas  DFW International Airport North TX (14)
    
    
    0
    
    
    
    1,537
    
    
    
    13,379
    
    
    
    0
    
    
    
    451
    
    
    
    1,537
    
    
    
    13,830
    
    
    
    15,367
    
    
    
    2,531
    
    
    
    1989
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDallas  DFW International Airport South, TX (1)
    
    
    14,936
    
    
    
    0
    
    
    
    35,156
    
    
    
    4,041
    
    
    
    756
    
    
    
    4,041
    
    
    
    35,912
    
    
    
    39,953
    
    
    
    6,808
    
    
    
    1985
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDallas  Love Field, TX (1)
    
    
    10,947
    
    
    
    1,934
    
    
    
    16,674
    
    
    
    0
    
    
    
    901
    
    
    
    1,934
    
    
    
    17,575
    
    
    
    19,509
    
    
    
    4,566
    
    
    
    1986
    
    
    
    3/29/1995
    
    
    15 - 40 YrsDallas  Market Center, TX (5)
    
    
    0
    
    
    
    4,056
    
    
    
    35,302
    
    
    
    0
    
    
    
    1,299
    
    
    
    4,056
    
    
    
    36,601
    
    
    
    40,657
    
    
    
    6,636
    
    
    
    1983
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDallas  Market Center, TX (1)
    
    
    0
    
    
    
    2,560
    
    
    
    23,751
    
    
    
    0
    
    
    
    695
    
    
    
    2,560
    
    
    
    24,446
    
    
    
    27,006
    
    
    
    5,175
    
    
    
    1980
    
    
    
    6/30/1997
    
    
    15 - 40 YrsDallas  Park Central, TX (3)
    
    
    0
    
    
    
    1,720
    
    
    
    28,550
    
    
    
    (264
    )
    
    
    818
    
    
    
    1,456
    
    
    
    29,368
    
    
    
    30,824
    
    
    
    4,517
    
    
    
    1972
    
    
    
    11/1/1998
    
    
    15 - 40 YrsDallas  Park Central, TX (12)
    
    
    0
    
    
    
    0
    
    
    
    8,053
    
    
    
    1,619
    
    
    
    272
    
    
    
    1,619
    
    
    
    8,325
    
    
    
    9,944
    
    
    
    3,010
    
    
    
    1997
    
    
    
    7/28/1998
    
    
    15 - 40 YrsDallas  Park Central, TX (13)
    
    
    0
    
    
    
    4,513
    
    
    
    43,125
    
    
    
    762
    
    
    
    5,098
    
    
    
    5,275
    
    
    
    48,223
    
    
    
    53,498
    
    
    
    9,149
    
    
    
    1983
    
    
    
    6/30/1997
    
    
    15 - 40 YrsDallas  Park Central Area, TX (1)
    
    
    0
    
    
    
    1,497
    
    
    
    12,722
    
    
    
    (19
    )
    
    
    1,112
    
    
    
    1,478
    
    
    
    13,834
    
    
    
    15,312
    
    
    
    4,062
    
    
    
    1985
    
    
    
    7/28/1994
    
    
    15 - 40 YrsDallas  West End/Convention Center, TX (9)
    
    
    0
    
    
    
    1,953
    
    
    
    16,989
    
    
    
    0
    
    
    
    1,953
    
    
    
    1,953
    
    
    
    18,942
    
    
    
    20,895
    
    
    
    3,408
    
    
    
    1969
    
    
    
    7/28/1998
    
    
    15 - 40 YrsHouston  Greenway Plaza Area, TX (7)
    
    
    0
    
    
    
    3,398
    
    
    
    29,578
    
    
    
    0
    
    
    
    613
    
    
    
    3,398
    
    
    
    30,191
    
    
    
    33,589
    
    
    
    5,627
    
    
    
    1984
    
    
    
    7/28/1998
    
    
    15 - 40 YrsHouston  I-10 West & Hwy. 6 (Park 10 Area), TX
(7)
    
    
    0
    
    
    
    3,037
    
    
    
    26,431
    
    
    
    (53
    )
    
    
    1,376
    
    
    
    2,984
    
    
    
    27,807
    
    
    
    30,791
    
    
    
    4,574
    
    
    
    1969
    
    
    
    7/28/1998
    
    
    15 - 40 YrsHouston  Intercontinental Airport, TX (2)
    
    
    0
    
    
    
    3,868
    
    
    
    33,664
    
    
    
    0
    
    
    
    947
    
    
    
    3,868
    
    
    
    34,611
    
    
    
    38,479
    
    
    
    6,418
    
    
    
    1971
    
    
    
    7/28/1998
    
    
    15 - 40 YrsHouston  Medical Center, TX (11)
    
    
    0
    
    
    
    0
    
    
    
    22,027
    
    
    
    0
    
    
    
    2,437
    
    
    
    0
    
    
    
    24,464
    
    
    
    24,464
    
    
    
    4,338
    
    
    
    1984
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSan Antonio  Downtown (Market Square), TX (2)
    
    
    0
    
    
    
    0
    
    
    
    22,129
    
    
    
    1
    
    
    
    1,045
    
    
    
    1
    
    
    
    23,174
    
    
    
    23,175
    
    
    
    4,341
    
    
    
    1968
    
    
    
    7/28/1998
    
    
    15 - 40 YrsSan Antonio  International Airport, TX (7)
    
    
    15,585
    
    
    
    3,351
    
    
    
    29,168
    
    
    
    (193
    )
    
    
    2,513
    
    
    
    3,158
    
    
    
    31,681
    
    
    
    34,839
    
    
    
    6,174
    
    
    
    1981
    
    
    
    7/28/1998
    
    
    15 - 40 YrsBurlington Hotel & Conference Center, VT (3)
    
    
    19,316
    
    
    
    3,136
    
    
    
    27,283
    
    
    
    (2
    )
    
    
    768
    
    
    
    3,134
    
    
    
    28,051
    
    
    
    31,185
    
    
    
    5,683
    
    
    
    1967
    
    
    
    12/4/1997
    
    
    15 - 40 Yrs$
    718,234
    
    
    $
    253,920
    
    
    $
    2,732,775
    
    
    $
    42,001
    
    
    $
    303,012
    
    
    $
    295,921
    
    
    $
    3,035,787
    
    
    $
    3,331,708
    
    
    $
    646,484
 
 (1)
    
    Embassy Suites(2)
    
    Holiday Inn(3)
    
    Sheraton(4)
    
    Doubletree Guest Suites(5)
    
    Crowne Plaza(6)
    
    Doubletree(7)
    
    Holiday Inn Select(8)
    
    Sheraton Suites(9)
    
    Hampton Inn(10)
    
    Hilton Suites(11)
    
    Holiday Inn Hotel & Suites(12)
    
    Staybridge Suites(13)
    
    Westin(14)
    
    Harvey Suites(15)
    
    Hilton F-38




---



##### Table of Contents



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2005
(in thousands)
 Year Ended December 31,2005
    
    
    2004Reconciliation of Land and Buildings and ImprovementsBalance at beginning of period
    
    $
    3,513,950
    
    
    $
    3,776,887Additions during period:Acquisitions
    
    
    18,949
    
    
    
    26,780Improvements
    
    
    21,735
    
    
    
    18,902Deductions during period:Sale of properties
    
    
    (140,071
    )
    
    
    (300,529
    )Hotels held for sale
    
    
    
    
    
    
    (8,090
    )Foreclosures
    
    
    (82,855
    )
    
    
    Balance at end of period before impairment charges
    
    
    3,331,708
    
    
    
    3,513,950Cumulative impairment charges on real estate
assets owned at end of period
    
    
    (327,169
    )
    
    
    (166,349
    )Balance at end of period
    
    $
    3,004,539
    
    
    $
    3,347,601Reconciliation of Accumulated DepreciationBalance at beginning of period
    
    $
    590,065
    
    
    $
    545,355Additions during period:Depreciation for the period
    
    
    79,231
    
    
    
    87,561Deductions during period:Sale of properties
    
    
    (22,812
    )
    
    
    (42,851
    )Balance at end of period
    
    $
    646,484
    
    
    $
    590,065
 F-39