##### 



THIS DOCUMENT IS A COPY OF THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
2007, FILED ON MARCH 3, 2008, PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
 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, 2007
 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
(Address of principal executive offices)
    
    75062
(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 Cumulative
    
    New York Stock Exchange, Inc.Redeemable Preferred Stock
  None
 þ o
 o þ
 þ o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



FELCOR LODGING TRUST INCORPORATED
 INDEX
 Form 10-KReportItem No.
    
    PagePART I1. Business
    
    
    21A. Risk Factors
    
    
    81B. Unresolved Staff Comments
    
    
    182. Properties
    
    
    183. Legal Proceedings
    
    
    274. Submission of Matters to a Vote of Security Holders
    
    
    27PART II5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    286. Selected Financial Data
    
    
    307. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    327A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    528. Financial Statements and Supplementary Data
    
    
    549. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    939A. Controls and Procedures
    
    
    939B. Other Information
    
    
    93PART III10. Directors and Executive Officers of the Registrant
    
    
    9411. Executive Compensation
    
    
    9412. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    9413. Certain Relationships and Related Transactions
    
    
    9414. Principal Accountant Fees and Services
    
    
    94PART IV15. Exhibits and Financial Statement Schedules
    
    
    95
 ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®




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##### 



PART I
 Item 1. Business
        http://www.felcor.com http://www.sec.gov
 2




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##### 



Developments During 2007
       Board of Director Changes
  The Industry
  3




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##### 



Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Number of FelCor Hotels
    
    
    83
    (1)
    
    
    83
    
    
    
    125
    
    
    
    142
    
    
    
    159Occupancy:FelCor hotels (2)
    
    
    70.4
    %
    
    
    72.6
    %
    
    
    69.3
    %
    
    
    65.5
    %
    
    
    62.4
    %All Upscale U.S. hotels (3)
    
    
    64.8
    
    
    
    65.5
    
    
    
    65.2
    
    
    
    63.0
    
    
    
    60.8All Midprice U.S. hotels (4)
    
    
    60.4
    
    
    
    61.0
    
    
    
    61.0
    
    
    
    59.4
    
    
    
    57.2All U.S. hotels
    
    
    63.2
    
    
    
    63.4
    
    
    
    63.1
    
    
    
    61.3
    
    
    
    59.2ADR:FelCor hotels (2)
    
    $
    134.21
    
    
    $
    125.98
    
    
    $
    107.18
    
    
    $
    99.07
    
    
    $
    94.92All Upscale U.S. hotels (3)
    
    
    113.56
    
    
    
    107.37
    
    
    
    101.60
    
    
    
    94.05
    
    
    
    90.55All Midprice U.S. hotels (4)
    
    
    82.18
    
    
    
    78.12
    
    
    
    73.96
    
    
    
    69.81
    
    
    
    67.54All U.S. hotels
    
    
    103.64
    
    
    
    97.31
    
    
    
    90.95
    
    
    
    86.20
    
    
    
    82.92RevPAR:FelCor hotels (2)
    
    $
    94.48
    
    
    $
    91.45
    
    
    $
    74.29
    
    
    $
    64.91
    
    
    $
    59.19All Upscale U.S. hotels (3)
    
    
    73.61
    
    
    
    70.31
    
    
    
    66.21
    
    
    
    59.26
    
    
    
    55.06All Midprice U.S. hotels (4)
    
    
    49.68
    
    
    
    47.66
    
    
    
    45.12
    
    
    
    41.47
    
    
    
    38.60All U.S. hotels
    
    
    65.50
    
    
    
    61.69
    
    
    
    57.39
    
    
    
    52.88
    
    
    
    49.07
 
 (1)
    
    We acquired the Renaissance Esmeralda Resort & Spa and the Renaissance Vinoy Resort & Golf
Club in December 2007. These hotels are not included in our 2007 statistics.(2)
    
    Information is based on historical presentations.(3)
    
    This category includes hotels in the upscale price level, defined as hotels with ADRs in
the 70th to 85th percentiles in their respective markets.(4)
    
    This category includes hotels in the midprice level, defined as hotels with ADRs in the
40th to 70th percentiles in their respective markets. 4




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##### 



Business Strategy
  Internal Growth
 
    
    Comprehensive Renovation of our Hotel Portfolio. We have implemented a
long-term capital plan for each of our hotels to enhance our portfolios competitive
position. A typical renovation touches every area of a hotel, including guest rooms,
guest baths, corridors, meeting space, public areas, restaurant, lobby and exterior.
We plan to make renovations totaling approximately $440 million starting in late 2006
through 2008. At December 31, 2007, we had completed renovations at 61 of our hotels,
or 73%, and expect to have completed renovations at 74 of our hotels, or 90%, by the
end of March 2008. We expect to complete renovations at the remaining hotels by the
end of 2008.
    
    Redevelopment Opportunities. We have identified redevelopment opportunities
at a number of our hotels. In January 2008, we completed the construction of a new
35,000 square foot convention center adjacent to our Hilton Myrtle Beach Resort and
expect to complete by the end of April 2008 the addition of meeting space at our
Doubletree Guest Suites in Dana Point, California and the addition of a spa and food
and beverage areas at our Embassy Suites Hotel Deerfield Beach Resort & Spa. We
continue to progress with the rebranding and redevelopment of our San Francisco Union
Square property to a Marriott. Marriott assumed management of the hotel in December
2007 and is currently operating it as Hotel 480 Union Square through the renovation
period. We expect to complete the renovation and rebranding by early 2009. We
continue to progress on our other major redevelopment projects, which are in various
stages of planning and permitting.
    
    Disciplined Asset Management. We seek to improve the competitive position
of our hotels through aggressive asset management and strong relationships with our
brand-owner managers. While REIT requirements prohibit us from directly managing our
hotels, we employ an intensive approach to asset management. We work closely with our
brand-owner managers to monitor and review hotel operations. We press our brand-owner
managers to implement best practices in expense and revenue management at our hotels,
and we strive to influence brand strategy on marketing and revenue enhancement
programs. Our asset management approach also entails looking at additional value-added
enhancements to our hotels, such as new restaurant concepts and maximizing the use of
public area space. See Business  Strategic Relationships.
 External Growth.
 Portfolio Repositioning
 5




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##### 



Debt Reduction
 Strategic Relationships
  
    
    Hilton Hotels Corporation (www.hiltonworldwide.com) is recognized internationally as a
preeminent hospitality company.  Hilton develops, owns, manages or franchises more than 2,800
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 54 of our hotels at December 31, 2007.  Hilton is a 50%
partner in joint ventures with us that own 12 hotels and manage residential condominiums and
hold 10% equity interests in certain of our consolidated subsidiaries that own three hotels.
 
    
    InterContinental Hotels Group PLC (www.ichotelsgroup.com) of the United Kingdom is one of
the worlds largest hotel companies by number of rooms. IHG owns, manages, leases or
franchises, through various subsidiaries, more than 3,800 hotels and almost 572,000 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, Hotel Indigo, Staybridge Suites,
Candlewood Suites, and also manages the worlds largest hotel loyalty program, Priority Club
Rewards, with more than 30 million members worldwide. At December 31, 2007, subsidiaries of
IHG managed 17 of our consolidated hotels.
 
    
    Starwood Hotels & Resorts Worldwide, Inc. (www.starwoodhotels.com) is one of the leading
hotel and leisure companies in the world with more than 870 properties with approximately
266,000 rooms in approximately 100 countries. With internationally renowned brands, Starwood
is a fully integrated owner, operator and franchisor of hotels and resorts including: St.
Regis, The Luxury Collection, Le Méridien, Sheraton, Westin, Four Points by Sheraton, aloft
and W brands. Subsidiaries of Starwood managed nine of our hotels at December 31, 2007.
Starwood is a 40% joint venture partner with us in the ownership of one hotel and a 50% joint
venture partner with us in the ownership of one hotel.
 
    
    Marriott International, Inc. (www.marriott.com) is a leading lodging company with nearly
2,900 lodging properties located in the United States and 68 other countries and territories.
Its portfolio includes 18 lodging and vacation resort ownership brands including Marriott
Hotels & Resorts and Renaissance Hotels & Resorts. Subsidiaries of Marriott managed three of
our hotels at December 31, 2007.
 Competition
  6




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##### 



Environmental Matters
    Tax Status
  Employees
  7




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##### 



Item 1A. Risk Factors
 Certain statements and analyses contained in this Annual Report on Form 10-K , in our 2008
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.
 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;
    
    the ability to refinance debt on favorable terms at maturity;
    
    changes in zoning laws;
    
    increases in lodging supply or competition;
    
    changes in traffic patterns and neighborhood characteristics;
    
    increases in assessed property taxes from changes in valuation or real estate tax rates;
    
    increases in the cost of property insurance;
    
    the potential for uninsured or underinsured property losses;
    
    costly governmental regulations and fiscal policies;
    
    the potential that we are unable to meet all requirements under the Americans with
Disabilities Act;
    
    changes in tax legislation;
    
    the ability to acquire hotel properties at prices consistent with our investment criteria;
    
    the impact of environmental laws and regulations; and
    
    other circumstances beyond our control.
  Compliance with environmental laws may adversely affect our financial condition.
  8




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##### 



Compliance with the Americans with Disabilities Act may adversely affect our financial
condition.
 There are significant risks associated with our renovation and planned redevelopment projects that
could adversely affect our financial condition, results of operations or cash flows from these
projects
  Our renovation and redevelopment projects may not achieve return on investment thresholds.
 Hospitality industry-related risks may adversely affect our business
 We are subject to the risks of hotel operations.
 
    
    wage and benefit costs, including hotels that employ unionized labor;
    
    repair and maintenance expenses;
    
    gas and electricity costs;
    
    insurance costs, including health, general liability and workers compensation; and
    
    other operating expenses.
  An economic slowdown or recession can have a significant adverse effect on our RevPAR
performance and results of operations. The effects of an economic slowdown or recession on our
financial condition could be material.
 9




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##### 



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;
    
    current high, and any further increases in, energy costs and other travel expenses;
    
    other events, such as terrorist acts or war 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 have embarked on a strategy to improve our customer mix.
 We could face increased competition.
 We face reduced coverages and increased costs of insurance.
 We could have property losses not covered by insurance.
 10




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##### 



We have geographic concentrations that may create risks from regional or local economic,
seismic or weather conditions.
 We are subject to possible adverse effects of management franchise and license agreement
requirements.
 We are subject to the risks of brand concentration.
  11




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##### 



% of 2007HotelHotels
    
    EBITDA(a)Embassy Suites Hotels
    
    
    47
    
    
    
    57
    %Holiday Inn
    
    
    17
    
    
    
    19Sheraton and Sheraton Suites
    
    
    8
    
    
    
    13Doubletree and Doubletree Guest Suites
    
    
    7
    
    
    
    7Hilton and Hilton Suites
    
    
    2
    
    
    
    2Renaissance
    
    
    2
    
    
    
    
    (b)Other(c)
    
    
    2
    
    
    
    2
 
 (a)
    
    Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and
further discussion 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.(b)
    
    We acquired the Renaissance Esmeralda Resort & Spa and the Renaissance Vinoy
Resort & Golf Club in December 2007. They did not make a significant contribution to
our 2007 Hotel EBITDA.(c)
    
    Includes Hotel 480 Union Square and Westin.  The lodging business is seasonal in nature.
 Future terrorist activities may adversely affect, and create uncertainty in, our business
  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.
 12




---



##### 



Failure to qualify as a REIT would subject us to federal income tax.
 We lack control over the management and operations of our hotels.
 We depend on external sources of capital for future growth, and we may be unable to access capital
when necessary
  Debt market conditions could have a material adverse impact on our earnings and financial condition
   13




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##### 



We have substantial financial leverage
    
    
    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 financing;
    
    increase our vulnerability to adverse economic and industry conditions, and to interest
rate fluctuations;
    
    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, paying dividends or other purposes;
    
    limit our flexibility to make, or react to, changes in our business and our industry; and
    
    place us at a competitive disadvantage, compared to our competitors that have less debt.
  Our debt agreements will allow us to incur additional debt, which, if incurred, could exacerbate
the other risks described herein
   We have substantial variable rate debt
  14




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##### 



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;
    
    make common or preferred distributions;
    
    make investments;
    
    engage in transactions with affiliates;
    
    incur liens;
    
    merge or consolidate with another person;
    
    dispose of all or substantially all of our assets; and
    
    permit limitations on the ability of our subsidiaries to make payments to us.
       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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##### 



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.
 16




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##### 



Maryland Takeover Statutes.
 Existing circumstances may result in two of our directors having interests that may conflict with
our interests
 Adverse tax consequences to affiliates upon a sale of certain hotels.
 Conflicts of interest.
 Departure of key personnel would deprive us of the institutional knowledge, expertise and
leadership they provide
  17




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##### 



Item 1B. Unresolved Staff Comments
  Item 2. Properties
  % of Total
    
    % of 2007 HotelHotels
    
    Rooms
    
    Rooms
    
    EBITDA(a)(b)Top MarketsSouth Florida area
    
    
    5
    
    
    
    1,436
    
    
    
    6
    
    
    
    7Atlanta
    
    
    5
    
    
    
    1,462
    
    
    
    6
    
    
    
    7Los Angeles area
    
    
    4
    
    
    
    898
    
    
    
    4
    
    
    
    6San Francisco Bay area
    
    
    6
    
    
    
    2,141
    
    
    
    9
    
    
    
    6Orlando
    
    
    5
    
    
    
    1,690
    
    
    
    7
    
    
    
    5Dallas
    
    
    4
    
    
    
    1,333
    
    
    
    6
    
    
    
    4Minneapolis
    
    
    3
    
    
    
    736
    
    
    
    3
    
    
    
    4Phoenix
    
    
    3
    
    
    
    798
    
    
    
    3
    
    
    
    4Northern New Jersey
    
    
    3
    
    
    
    756
    
    
    
    3
    
    
    
    4San Diego
    
    
    1
    
    
    
    600
    
    
    
    2
    
    
    
    3Washington, D.C.
    
    
    1
    
    
    
    443
    
    
    
    2
    
    
    
    3Chicago
    
    
    3
    
    
    
    795
    
    
    
    3
    
    
    
    3San Antonio
    
    
    3
    
    
    
    874
    
    
    
    4
    
    
    
    3Philadelphia
    
    
    2
    
    
    
    729
    
    
    
    3
    
    
    
    3Boston
    
    
    2
    
    
    
    532
    
    
    
    2
    
    
    
    2LocationSuburban
    
    
    33
    
    
    
    8,360
    
    
    
    33
    
    
    
    36Urban
    
    
    20
    
    
    
    6,362
    
    
    
    25
    
    
    
    25Airport
    
    
    20
    
    
    
    6,205
    
    
    
    26
    
    
    
    26Resort
    
    
    12
    
    
    
    4,078
    
    
    
    16
    
    
    
    13SegmentUpper-upscale
    
    
    68
    
    
    
    18,700
    
    
    
    75
    
    
    
    81Full service
    
    
    17
    
    
    
    6,305
    
    
    
    25
    
    
    
    19
 
 (a)
    
    Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and
further discussion 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.(b)
    
    We acquired the Renaissance Esmeralda Resort & Spa and the Renaissance Vinoy
Resort & Golf Club in December 2007. They did not make a significant contribution to
our 2007 Hotel EBITDA. 18




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##### 



Hotel Brands
  Brand Distribution
 % of
    
    % of 2007Brand
    
    Hotels
    
    Rooms
    
    Total Rooms
    
    Hotel EBITDA(a)Embassy Suites Hotels
    
    
    47
    
    
    
    12,129
    
    
    
    48
    
    
    
    57Holiday Inn
    
    
    17
    
    
    
    6,305
    
    
    
    25
    
    
    
    19Sheraton and Sheraton Suites
    
    
    8
    
    
    
    2,681
    
    
    
    11
    
    
    
    13Doubletree and Doubletree Guest Suites
    
    
    7
    
    
    
    1,471
    
    
    
    6
    
    
    
    7Hilton and Hilton Suites
    
    
    2
    
    
    
    559
    
    
    
    2
    
    
    
    2Renaissance
    
    
    2
    
    
    
    921
    
    
    
    4
    
    
    
    
    (b)Other(c)
    
    
    2
    
    
    
    939
    
    
    
    4
    
    
    
    2
 
 (a)
    
    Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and
further discussion 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.(b)
    
    We acquired the Renaissance Esmeralda Resort & Spa and the Renaissance Vinoy
Resort & Golf Club in December 2007. They did not make a significant contribution to
our 2007 Hotel EBITDA.(c)
    
    Includes Hotel 480 Union Square and Westin. 19




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##### 



Hotel Operating Statistics
   Operating Statistics by Brand
 Occupancy (%)Year Ended December 31,2007
    
    2006
    
    %VarianceEmbassy Suites
    
    
    71.7
    
    
    
    75.0
    
    
    
    (4.5
    )Holiday Inn
    
    
    69.1
    
    
    
    69.2
    
    
    
    (0.1
    )Sheraton and Westin
    
    
    68.1
    
    
    
    70.8
    
    
    
    (3.8
    )Doubletree and Doubletree Guest Suites
    
    
    71.7
    
    
    
    74.2
    
    
    
    (3.4
    )Other(a)
    
    
    68.9
    
    
    
    67.8
    
    
    
    1.6Total
    
    
    70.4
    
    
    
    72.6
    
    
    
    (3.0
    )
 ADR ($)Year Ended December 31,2007
    
    2006
    
    %VarianceEmbassy Suites
    
    
    143.10
    
    
    
    134.12
    
    
    
    6.7Holiday Inn
    
    
    117.59
    
    
    
    109.52
    
    
    
    7.4Sheraton and Westin
    
    
    126.77
    
    
    
    121.10
    
    
    
    4.7Doubletree and Doubletree Guest Suites
    
    
    143.11
    
    
    
    130.27
    
    
    
    9.9Other(a)
    
    
    137.29
    
    
    
    132.33
    
    
    
    3.7Total
    
    
    134.21
    
    
    
    125.98
    
    
    
    6.5
 RevPAR ($)Year Ended December 31,2007
    
    2006
    
    %VarianceEmbassy Suites
    
    
    102.54
    
    
    
    100.63
    
    
    
    1.9Holiday Inn
    
    
    81.22
    
    
    
    75.74
    
    
    
    7.2Sheraton and Westin
    
    
    86.33
    
    
    
    85.73
    
    
    
    0.7Doubletree and Doubletree Guest Suites
    
    
    102.55
    
    
    
    96.68
    
    
    
    6.1Other(a)
    
    
    94.62
    
    
    
    89.73
    
    
    
    5.4Total
    
    
    94.48
    
    
    
    91.45
    
    
    
    3.3
 
 (a)
    
    Includes a Hilton, Hilton Suites and Hotel 480 Union Square. 20




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##### 



Operating Statistics for Our Top Markets
 Occupancy (%)Year Ended December 31,2007
    
    2006
    
    %VarianceSouth Florida area
    
    
    73.2
    
    
    
    79.5
    
    
    
    (7.9
    )Atlanta
    
    
    73.2
    
    
    
    75.2
    
    
    
    (2.5
    )Los Angeles area
    
    
    74.5
    
    
    
    75.2
    
    
    
    (0.9
    )San Francisco Bay area
    
    
    76.6
    
    
    
    76.0
    
    
    
    0.8Orlando
    
    
    76.8
    
    
    
    76.6
    
    
    
    0.3Dallas
    
    
    65.0
    
    
    
    69.9
    
    
    
    (7.1
    )Minneapolis
    
    
    74.8
    
    
    
    70.2
    
    
    
    6.6Phoenix
    
    
    67.3
    
    
    
    72.9
    
    
    
    (7.6
    )Northern New Jersey
    
    
    72.0
    
    
    
    69.3
    
    
    
    3.8San Diego
    
    
    74.5
    
    
    
    81.5
    
    
    
    (8.6
    )Washington, D.C.
    
    
    65.7
    
    
    
    66.4
    
    
    
    (1.1
    )Chicago
    
    
    71.5
    
    
    
    74.9
    
    
    
    (4.5
    )San Antonio
    
    
    73.7
    
    
    
    76.1
    
    
    
    (3.2
    )Philadelphia
    
    
    68.9
    
    
    
    73.4
    
    
    
    (6.1
    )Boston
    
    
    68.6
    
    
    
    73.0
    
    
    
    (6.0
    )
 ADR ($)Year Ended December 31,2007
    
    2006
    
    %VarianceSouth Florida area
    
    
    151.23
    
    
    
    140.16
    
    
    
    7.9Atlanta
    
    
    122.66
    
    
    
    118.35
    
    
    
    3.6Los Angeles area
    
    
    158.71
    
    
    
    142.74
    
    
    
    11.2San Francisco Bay area
    
    
    141.59
    
    
    
    130.97
    
    
    
    8.1Orlando
    
    
    105.62
    
    
    
    100.24
    
    
    
    5.4Dallas
    
    
    123.83
    
    
    
    112.87
    
    
    
    9.7Minneapolis
    
    
    144.24
    
    
    
    137.72
    
    
    
    4.7Phoenix
    
    
    146.03
    
    
    
    133.17
    
    
    
    9.7Northern New Jersey
    
    
    157.02
    
    
    
    148.76
    
    
    
    5.5San Diego
    
    
    154.92
    
    
    
    140.40
    
    
    
    10.3Washington, D.C.
    
    
    164.66
    
    
    
    161.75
    
    
    
    1.8Chicago
    
    
    131.68
    
    
    
    123.78
    
    
    
    6.4San Antonio
    
    
    109.66
    
    
    
    103.94
    
    
    
    5.5Philadelphia
    
    
    138.88
    
    
    
    130.00
    
    
    
    6.8Boston
    
    
    158.52
    
    
    
    151.65
    
    
    
    4.5
 RevPAR ($)Year Ended December 31,2007
    
    2006
    
    %VarianceSouth Florida area
    
    
    110.67
    
    
    
    111.38
    
    
    
    (0.6
    )Atlanta
    
    
    89.85
    
    
    
    88.95
    
    
    
    1.0Los Angeles area
    
    
    118.26
    
    
    
    107.36
    
    
    
    10.2San Francisco Bay area
    
    
    108.42
    
    
    
    99.53
    
    
    
    8.9Orlando
    
    
    81.11
    
    
    
    76.78
    
    
    
    5.6Dallas
    
    
    80.47
    
    
    
    78.94
    
    
    
    1.9Minneapolis
    
    
    107.91
    
    
    
    96.69
    
    
    
    11.6Phoenix
    
    
    98.32
    
    
    
    97.05
    
    
    
    1.3Northern New Jersey
    
    
    113.07
    
    
    
    103.16
    
    
    
    9.6San Diego
    
    
    115.36
    
    
    
    114.36
    
    
    
    0.9Washington, D.C.
    
    
    108.10
    
    
    
    107.42
    
    
    
    0.6Chicago
    
    
    94.18
    
    
    
    92.75
    
    
    
    1.5San Antonio
    
    
    80.84
    
    
    
    79.14
    
    
    
    2.1Philadelphia
    
    
    95.68
    
    
    
    95.36
    
    
    
    0.3Boston
    
    
    108.72
    
    
    
    110.67
    
    
    
    (1.8
    )
 21




---



##### 



Embassy Suites Hotels
  Doubletree and Doubletree Guest Suites Hotels
  Holiday Inn Hotels
  Sheraton and Sheraton Suites Hotels
  Renaissance
  Other Hotels
  22




---



##### 



Hotel Portfolio
  State
    
    Rooms
    
    % Owned (a)
    
    BrandConsolidated 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 SuitesIndian Wells  Esmeralda Resort & Spa(b)
    
    CA
    
    
    560
    
    
    
    
    
    
    Renaissance ResortLos Angeles  Anaheim (Located near Disneyland Park)(b)
    
    CA
    
    
    222
    
    
    
    
    
    
    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 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  Hotel 480 Union Square
    
    CA
    
    
    403
    
    
    
    
    
    
    Independent(c)San 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
    
    
    318
    
    
    
    
    
    
    Embassy Suites HotelOrlando  International Airport(b)
    
    FL
    
    
    288
    
    
    
    
    
    
    Holiday InnOrlando  International Drive  Resort
    
    FL
    
    
    652
    
    
    
    
    
    
    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 SuitesSt. Petersburg  Vinoy Resort & Golf Club(b)
    
    FL
    
    
    361
    
    
    
    
    
    
    Renaissance ResortTampa On Tampa Bay(b)
    
    FL
    
    
    203
    
    
    
    
    
    
    Doubletree Guest SuitesAtlanta  Airport(b)
    
    GA
    
    
    232
    
    
    
    
    
    
    Embassy Suites HotelAtlanta  Buckhead(b)
    
    GA
    
    
    316
    
    
    
    
    
    
    Embassy Suites HotelAtlanta  Galleria(b)
    
    GA
    
    
    278
    
    
    
    
    
    
    Sheraton SuitesAtlanta  Gateway  Atlanta Airport
    
    GA
    
    
    395
    
    
    
    
    
    
    SheratonAtlanta  Perimeter Center(b)
    
    GA
    
    
    241
    
    
    
    50
    %
    
    Embassy Suites HotelChicago  Lombard/Oak Brook(b)
    
    IL
    
    
    262
    
    
    
    50
    %
    
    Embassy Suites HotelChicago  Northshore/Deerfield (Northbrook)(b)
    
    IL
    
    
    237
    
    
    
    
    
    
    Embassy Suites HotelChicago  OHare Airport(b)
    
    IL
    
    
    296
    
    
    
    
    
    
    Sheraton SuitesIndianapolis  North(b)
    
    IN
    
    
    221
    
    
    
    75
    %
    
    Embassy Suites HotelKansas City  Overland Park(b)
    
    KS
    
    
    199
    
    
    
    50
    %
    
    Embassy Suites HotelLexington  Lexington Green(b)
    
    KY
    
    
    174
    
    
    
    
    
    
    Hilton SuitesBaton Rouge(b)
    
    LA
    
    
    223
    
    
    
    
    
    
    Embassy Suites Hotel
 23




---



##### 



State
    
    Rooms
    
    % Owned(a)
    
    BrandNew Orleans(b)
    
    LA
    
    
    370
    
    
    
    
    
    
    Embassy Suites HotelNew Orleans  French Quarter
    
    LA
    
    
    374
    
    
    
    
    
    
    Holiday InnBoston  Beacon Hill
    
    MA
    
    
    303
    
    
    
    
    
    
    Holiday InnBoston  Marlborough(b)
    
    MA
    
    
    229
    
    
    
    
    
    
    Embassy Suites HotelBaltimore  BWI Airport(b)
    
    MD
    
    
    251
    
    
    
    90
    %
    
    Embassy Suites HotelBloomington(b)
    
    MN
    
    
    218
    
    
    
    
    
    
    Embassy Suites HotelMinneapolis  Airport(b)
    
    MN
    
    
    310
    
    
    
    
    
    
    Embassy Suites HotelSt. Paul  Downtown(b)
    
    MN
    
    
    208
    
    
    
    
    
    
    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
    
    
    221
    
    
    
    
    
    
    Embassy Suites HotelSecaucus  Meadowlands(b)
    
    NJ
    
    
    261
    
    
    
    50
    %
    
    Embassy Suites HotelPhiladelphia  Historic District
    
    PA
    
    
    364
    
    
    
    
    
    
    Holiday InnPhiladelphia  Society Hill(b)
    
    PA
    
    
    365
    
    
    
    
    
    
    SheratonPittsburgh  At University Center (Oakland)(b)
    
    PA
    
    
    251
    
    
    
    
    
    
    Holiday InnCharleston  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
    
    
    383
    
    
    
    
    
    
    Holiday InnAustin(b)
    
    TX
    
    
    189
    
    
    
    90
    %
    
    Doubletree Guest SuitesAustin  Central(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
    %
    
    WestinHouston  Medical Center
    
    TX
    
    
    287
    
    
    
    
    
    
    Holiday Inn & SuitesSan Antonio  International Airport(b)
    
    TX
    
    
    261
    
    
    
    50
    %
    
    Embassy Suites HotelSan Antonio  International Airport(b)
    
    TX
    
    
    397
    
    
    
    
    
    
    Holiday InnSan Antonio  N.W. I-10(b)
    
    TX
    
    
    216
    
    
    
    50
    %
    
    Embassy Suites HotelBurlington Hotel & Conference Center(b)
    
    VT
    
    
    309
    
    
    
    
    
    
    SheratonVienna  At Tysons Corner(b)
    
    VA
    
    
    443
    
    
    
    50
    %
    
    SheratonCanadaToronto  Airport
    
    Ontario
    
    
    445
    
    
    
    
    
    
    Holiday InnToronto  Yorkdale
    
    Ontario
    
    
    370
    
    
    
    
    
    
    Holiday Inn
 State
    
    Rooms
    
    % Owned(a)
    
    BrandUnconsolidated HotelsHays(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 FrenchQuarter/Historic Area)(b)
    
    LA
    
    
    171
    
    
    
    50
    %
    
    Holiday Inn
 
 (a)
    
    We own 100% of the real estate interests unless otherwise noted.(b)
    
    This hotel was encumbered by mortgage debt or capital lease obligation at December 31,2007.(c)
    
    Upon the completion of its renovation, by early 2009, this hotel will be rebranded as aMarriott hotel. 24




---



##### 



Management Agreements
   Management Fees.
   
    
    Embassy Suites Hotels (45 hotels)  2% of the hotels total revenue per month;
    
    Doubletree (7 hotels)  between 2% and 3% of the hotels total revenue per month;
    
    Hilton and Hilton Suites (2 hotels)  between 1.5% (escalating to 2% in 2009)
and 2.75% of the hotels total revenue per month;
    
    
    Renaissance (2 hotels)  3% of the hotels total revenue per month;
    
    Hotel 480 Union Square (1 hotel)  the greater of 2% of the hotels total
revenue or $200,000 for 2008, thereafter 3% of the hotels total revenue per
month;
     25




---



##### 



Management Fees Paid DuringYear Ended December 31,Manager
    
    2007
    
    
    2006
    
    
    2005Hilton
    
    $
    11,491
    
    
    $
    10,527
    
    
    $
    10,517IHG
    
    
    17,512
    
    
    
    15,928
    
    
    
    13,734Starwood
    
    
    5,783
    
    
    
    6,956
    
    
    
    4,587Other
    
    
    411
    
    
    
    339
    
    
    
    302Total
    
    $
    35,197
    
    
    $
    33,750
    
    
    $
    29,140
 Term and Termination.
 Number of Management Agreements Expiring inBrand
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    ThereafterEmbassy Suites
    
    
    1
    
    
    
    6
    
    
    
    5
    
    
    
    18
    
    
    
    12
    
    
    
    5Sheraton  Westin
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    9Doubletree
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3
    
    
    
    2
    
    
    
    2Holiday Inn
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    17Other
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1
    
    
    
    0
    
    
    
    4Total
    
    
    1
    
    
    
    6
    
    
    
    5
    
    
    
    22
    
    
    
    14
    
    
    
    37
  Assignment.
 Franchise Agreements
  26




---



##### 



License Fees Paid DuringYear Ended December 31,Brand
    
    2007
    
    
    2006
    
    
    2005Embassy Suites Hotels
    
    $
    18,047
    
    
    $
    17,183
    
    
    $
    15,834Hilton Suites
    
    
    263
    
    
    
    304
    
    
    
    241Total
    
    $
    18,310
    
    
    $
    17,487
    
    
    $
    16,075
  Number of Franchise Agreements Expiring inBrand
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    ThereafterEmbassy Suites Hotels
    
    
    0
    
    
    
    1
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    46Hilton Suites
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    1Total
    
    
    0
    
    
    
    1
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    47
 Item 3. Legal Proceedings
  Item 4. Submission of Matters to a Vote of Security Holders
  27




---



##### 



PART II
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
  DividendsDeclared PerHigh
    
    Low
    
    Share2007First quarter
    
    $
    26.04
    
    
    $
    20.59
    
    
    $
    0.25Second quarter
    
    
    28.42
    
    
    
    23.28
    
    
    
    0.30Third quarter
    
    
    29.50
    
    
    
    19.00
    
    
    
    0.30Fourth quarter
    
    
    22.74
    
    
    
    15.06
    
    
    
    0.352006First quarter
    
    $
    22.10
    
    
    $
    16.78
    
    
    $
    0.15Second quarter
    
    
    22.89
    
    
    
    19.70
    
    
    
    0.20Third quarter
    
    
    22.95
    
    
    
    18.73
    
    
    
    0.20Fourth quarter
    
    
    22.80
    
    
    
    19.12
    
    
    
    0.25
 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
   28




---



##### 



Issuances of Unregistered Securities
  Equity Compensation Plan Information
  Equity Compensation Plan Information
 Number of shares to be
    
    Weighted averageissued upon exercise 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
    
    
    161,356
    
    
    $
    21.11Unvested Restricted Stock
    
    
    1,045,506Total
    
    
    1,206,862
    
    
    
    
    
    
    
    292,713
 29




---



##### 



Item 6. Selected Financial Data
  SELECTED FINANCIAL DATA
(in thousands, except per share data)
 Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Statement of Operations Data:(1)Total revenues
    
    $
    1,021,884
    
    
    $
    991,038
    
    
    $
    914,655
    
    
    $
    842,612
    
    
    $
    786,883Income (loss) from continuing operations(2)
    
    
    55,693
    
    
    
    8,565
    
    
    
    (16,916
    )
    
    
    (78,376
    )
    
    
    (73,564
    )Diluted earnings per share:Net income (loss) from continuing operations
applicable to common stockholders
    
    $
    0.27
    
    
    $
    (0.50
    )
    
    $
    (1.06
    )
    
    $
    (1.92
    )
    
    $
    (1.71
    )Other Data:Cash distributions declared per common
share(3)
    
    $
    1.20
    
    
    $
    0.80
    
    
    $
    0.15
    
    
    $
    
    
    
    $
    Funds From Operations(4)
    
    
    135,919
    
    
    
    93,451
    
    
    
    (191,139
    )
    
    
    (30,608
    )
    
    
    (207,462
    )EBITDA(4)
    
    
    322,126
    
    
    
    300,460
    
    
    
    12,475
    
    
    
    184,950
    
    
    
    (532
    )Cash flows provided by operating activities
    
    
    137,337
    
    
    
    147,700
    
    
    
    111,482
    
    
    
    33,281
    
    
    
    52,914Balance Sheet Data (at end of period):Total assets
    
    $
    2,683,835
    
    
    $
    2,583,249
    
    
    $
    2,920,263
    
    
    $
    3,318,191
    
    
    $
    3,590,893Total debt, net of discount
    
    
    1,475,607
    
    
    
    1,369,153
    
    
    
    1,675,280
    
    
    
    1,767,122
    
    
    
    2,037,355
 
 (1)
    
    All years presented have been adjusted to reflect sold hotels as discontinued operations.(2)
    
    Included in income (loss) from continuing operations are the following amounts (in
thousands): Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Charge-off of deferred debt costs
    
    $
    
    
    
    $
    (3,562
    )
    
    $
    (1,448
    )
    
    $
    (6,960
    )
    
    $
    (2,834
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    (12,471
    )
    
    
    (4,037
    )
    
    
    (44,216
    )
    
    
    Abandoned projects
    
    
    (22
    )
    
    
    (33
    )
    
    
    (265
    )
    
    
    
    
    
    
    Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    
    
    
    
    1,005
    
    
    
    Gain (loss) on sale of assets
    
    
    
    
    
    
    (92
    )
    
    
    469
    
    
    
    
    
    
    
    106Gain on sale of condominiums
    
    
    18,622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (3)
    
    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 Hotel EBITDA 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.(4)
    
    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. 30




---



##### 



Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Impairment loss, net of minority interests
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (257,775
    )
    
    $
    (38,289
    )
    
    $
    (243,739
    )Charges related to debt extinguishment,
net of minority interests
    
    
    (811
    )
    
    
    (17,472
    )
    
    
    (11,300
    )
    
    
    (51,176
    )
    
    
    (1,223
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    
    
    
    
    1,005
    
    
    
    Conversion costs
    
    
    (491
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    Abandoned projects
    
    
    (22
    )
    
    
    (112
    )
    
    
    (265
    )
    
    
    
    
    
    
    Issuance costs of redeemed preferred stock
    
    
    
    
    
    
    
    
    
    
    (6,522
    )
    
    
    
    
    
    
    
  Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Impairment loss, net of minority interests
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (257,775
    )
    
    $
    (38,289
    )
    
    $
    (243,739
    )Charges related to debt extinguishment,
net of minority interests
    
    
    (811
    )
    
    
    (17,472
    )
    
    
    (11,300
    )
    
    
    (51,176
    )
    
    
    (1,223
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    
    
    
    
    1,005
    
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    Abandoned projects
    
    
    (22
    )
    
    
    (112
    )
    
    
    (265
    )
    
    
    
    
    
    
    Gain on sale of hotels, net of income tax
and minority interests
    
    
    27,330
    
    
    
    40,650
    
    
    
    12,124
    
    
    
    19,422
    
    
    
    2,668Gain on sale of hotels in unconsolidated
entities
    
    
    10,993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 31




---



##### 



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
       32




---



##### 



Financial Comparison (in thousands, except RevPAR, Hotel EBITDA margin and percentage change)
 Year Ended December 31,% Change
    
    
    
    
    
    % Change2007
    
    2006
    
    2007-2006
    
    2005
    
    2006-2005RevPAR
    
    $
    94.48
    
    
    $
    91.45
    
    
    
    3.3
    %
    
    $
    84.86
    
    
    
    7.8
    %Hotel EBITDA(1)
    
    
    293,713
    
    
    
    292,419
    
    
    
    0.4
    %
    
    
    252,810
    
    
    
    15.7
    %Hotel EBITDA margin(1)
    
    
    28.8
    %
    
    
    29.5
    %
    
    
    (2.4)
    %
    
    
    27.7
    %
    
    
    6.5
    %Income (loss) from continuing operations
applicable to common
shareholders(2)
    
    
    16,980
    
    
    
    (30,148
    )
    
    
    156.3
    %
    
    
    (62,846
    )
    
    
    52.0
    %Funds From Operations (FFO)(1)(3)
    
    
    135,919
    
    
    
    93,451
    
    
    
    45.4
    %
    
    
    (191,139
    )
    
    
    148.9
    %Earnings Before Interest, Taxes,
Depreciation and Amortization
(EBITDA)(1)(4)
    
    
    322,126
    
    
    
    300,460
    
    
    
    7.2
    %
    
    
    12,475
    
    
    
    2,308.5
    %
 
 (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.(2)
    
    Included in income (loss) from continuing operations applicable to common shareholders
are the following amounts (in thousands): Year Ended December 31,2007
    
    2006
    
    2005Loss on early extinguishment of debt
    
    $
    
    
    
    $
    (12,471
    )
    
    $
    (4,037
    )Charge-off of deferred debt costs
    
    
    
    
    
    
    (3,562
    )
    
    
    (1,448
    )Abandoned projects
    
    
    (22
    )
    
    
    (33
    )
    
    
    (265
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    Gain (loss) on sale of assets
    
    
    
    
    
    
    (92
    )
    
    
    469Gain on sale of condominiums
    
    
    18,622
    
    
    
    
    
    
    
    
 (3)
    
    Consistent with SEC guidance on non-GAAP financial measures, FFO has not been adjusted
for the following amounts included in net income (loss) (in thousands, except per share
amounts).
 Year Ended December 31,2007
    
    2006
    
    2005Impairment loss, net of minority interests
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (257,775
    )Charges related to debt extinguishment, net of minority interests
    
    
    (811
    )
    
    
    (17,472
    )
    
    
    (11,300
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    Conversion costs
    
    
    (491
    )
    
    
    
    
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    (1,300
    )Abandoned projects
    
    
    (22
    )
    
    
    (112
    )
    
    
    (265
    )Issuance costs of redeemed preferred stock
    
    
    
    
    
    
    
    
    
    
    (6,522
    )
 33




---



##### 



(4)
    
    Consistent with SEC guidance on non-GAAP financial measures, EBITDA has not been
adjusted for the following amounts included in net income (loss) (in thousands).
 Year Ended December 31,2007
    
    2006
    
    2005Impairment loss, net of minority interests
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (257,775
    )Charges related to debt extinguishment, net of
minority interests
    
    
    (811
    )
    
    
    (17,472
    )
    
    
    (11,300
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    (1,300
    )Abandoned projects
    
    
    (22
    )
    
    
    (112
    )
    
    
    (265
    )Gain on sale of hotels, net of income tax and
minority interests
    
    
    27,330
    
    
    
    40,650
    
    
    
    12,124Gain on sale of hotels in unconsolidated entities
    
    
    10,993
    
    
    
    
    
    
    
    
 RevPAR and Hotel Operating Margin
  Results of Operations
 Comparison of the Years Ended December 31, 2007 and 2006
    34




---



##### 



35




---



##### 



Comparison of the Years Ended December 31, 2006 and 2005
         36




---



##### 



Non-GAAP Financial Measures
  37




---



##### 



Reconciliation of Net Income (Loss) to FFO
(in thousands, except per share data)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Per
    
    
    
    
    
    
    
    
    
    
    Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    
    
    
    
    ShareDollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    AmountNet income (loss)
    
    $
    89,039
    
    
    
    
    
    
    
    
    
    
    $
    51,045
    
    
    
    
    
    
    
    
    
    
    $
    (251,615
    )Preferred dividends
    
    
    (38,713
    )
    
    
    
    
    
    
    
    
    
    
    (38,713
    )
    
    
    
    
    
    
    
    
    
    
    (39,408
    )Issuance costs of redeemed
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,522
    )Net income (loss) applicable
to common stockholders
    
    
    50,326
    
    
    
    61,897
    
    
    $
    0.81
    
    
    
    12,332
    
    
    
    60,734
    
    
    $
    0.20
    
    
    
    (297,545
    )
    
    
    59,436
    
    
    $
    (5.01
    )Depreciation, continuing
operations
    
    
    110,751
    
    
    
    
    
    
    
    1.79
    
    
    
    94,579
    
    
    
    
    
    
    
    1.56
    
    
    
    84,448
    
    
    
    
    
    
    
    1.42Depreciation, unconsolidated
entities and discontinued
operations
    
    
    12,071
    
    
    
    
    
    
    
    0.20
    
    
    
    26,911
    
    
    
    
    
    
    
    0.44
    
    
    
    47,759
    
    
    
    
    
    
    
    0.80Gain on sale of hotels, net
of income tax and minority
interests
    
    
    (27,330
    )
    
    
    
    
    
    
    (0.44
    )
    
    
    (40,650
    )
    
    
    
    
    
    
    (0.67
    )
    
    
    (12,124
    )
    
    
    
    
    
    
    (0.20
    )Gain on sale of hotels in
unconsolidated entities
    
    
    (10,993
    )
    
    
    
    
    
    
    (0.18
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in FelCor LP
    
    
    1,094
    
    
    
    1,354
    
    
    
    (0.03
    )
    
    
    279
    
    
    
    1,864
    
    
    
    (0.04
    )
    
    
    (13,677
    )
    
    
    2,778
    
    
    
    (0.08
    )Conversion of options and
unvested restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    FFO
    
    $
    135,919
    
    
    
    63,251
    
    
    $
    2.15
    
    
    $
    93,451
    
    
    
    62,925
    
    
    $
    1.49
    
    
    $
    (191,139
    )
    
    
    62,214
    
    
    $
    (3.07
    )
 Year Ended December 31,2004
    
    
    2003Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareDollars
    
    
    Shares
    
    
    Amount
    
    
    Dollars
    
    
    Shares
    
    
    AmountNet (loss)
    
    $
    (100,127
    )
    
    
    
    
    
    
    
    
    
    $
    (310,144
    )Preferred dividends
    
    
    (35,130
    )
    
    
    
    
    
    
    
    
    
    
    (26,908
    )Net loss applicable to common stockholders
    
    
    (135,257
    )
    
    
    59,045
    
    
    $
    (2.29
    )
    
    
    (337,052
    )
    
    
    58,657
    
    
    $
    (5.75
    )Depreciation, continuing operations
    
    
    78,116
    
    
    
    
    
    
    
    1.32
    
    
    
    76,288
    
    
    
    
    
    
    
    1.30Depreciation, unconsolidated entities
and discontinued operations
    
    
    52,636
    
    
    
    
    
    
    
    0.89
    
    
    
    73,747
    
    
    
    
    
    
    
    1.26Gain on sale of hotels
    
    
    (19,422
    )
    
    
    
    
    
    
    (0.33
    )
    
    
    (2,668
    )
    
    
    
    
    
    
    (0.05
    )Minority interest in FelCor LP
    
    
    (6,681
    )
    
    
    2,939
    
    
    
    (0.08
    )
    
    
    (17,777
    )
    
    
    3,188
    
    
    
    (0.11
    )FFO
    
    $
    (30,608
    )
    
    
    61,984
    
    
    $
    (0.49
    )
    
    $
    (207,462
    )
    
    
    61,845
    
    
    $
    (3.35
    )
 38




---



##### 



Year Ended December 31,2007
    
    2006
    
    2005Per Share
    
    
    
    
    
    Per Share
    
    
    
    
    
    Per ShareDollars
    
    Amount(a)
    
    Dollars
    
    Amount(a)
    
    Dollars
    
    Amount(a)Impairment loss, net of minority interests
    
    $
    
    
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (0.24
    )
    
    $
    (257,775
    )
    
    $
    (4.15
    )Charges related to debt extinguishment,
net of minority interests
    
    
    (811
    )
    
    
    (0.01
    )
    
    
    (17,472
    )
    
    
    (0.28
    )
    
    
    (11,300
    )
    
    
    (0.18
    )Gain from swap termination
    
    
    
    
    
    
    
    
    
    
    1,715
    
    
    
    0.03
    
    
    
    
    
    
    
    Conversion costs
    
    
    (491
    )
    
    
    (0.01
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Abandoned projects
    
    
    (22
    )
    
    
    
    
    
    
    (112
    )
    
    
    
    
    
    
    (265
    )
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,300
    )
    
    
    (0.02
    )Issuance costs of redeemed
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,522
    )
    
    
    (0.10
    )
 Year Ended December 31,2004
    
    2003Per Share
    
    
    
    
    
    Per ShareDollars
    
    Amount(a)
    
    Dollars
    
    Amount(a)Impairment loss, net of minority interests
    
    $
    (38,289
    )
    
    $
    (0.62
    )
    
    $
    (243,739
    )
    
    $
    (3.94
    )Charges related to debt extinguishment, net of minority interests
    
    
    (51,176
    )
    
    
    (0.81
    )
    
    
    (1,223
    )
    
    
    (0.02
    )Gain from swap termination
    
    
    1,005
    
    
    
    0.02
    
    
    
    
    
    
    
    Asset disposition costs
    
    
    (4,900
    )
    
    
    (0.08
    )
    
    
    
    
    
    
    
 
 (a)
    
    The denominator for per share information in this table uses weighted average
shares outstanding in accordance with GAAP and adjusts this number to reflect the
weighted average units of FelCor LP minority interest outstanding. This adjustment
allows the reader to see the impact of these items net of minority interest.  Reconciliation of Net Income (Loss) to EBITDA
 Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Net income (loss)
    
    $
    89,039
    
    
    $
    51,045
    
    
    $
    (251,615
    )
    
    $
    (100,127
    )
    
    $
    (310,144
    )Depreciation, continuing operations
    
    
    110,751
    
    
    
    94,579
    
    
    
    84,448
    
    
    
    78,116
    
    
    
    76,288Depreciation, unconsolidated
entities and discontinued
operations
    
    
    12,071
    
    
    
    26,911
    
    
    
    47,759
    
    
    
    52,636
    
    
    
    73,747Interest expense
    
    
    98,929
    
    
    
    114,909
    
    
    
    125,707
    
    
    
    138,872
    
    
    
    156,327Interest expense, unconsolidated
entities and discontinued
operations
    
    
    5,987
    
    
    
    7,657
    
    
    
    16,949
    
    
    
    19,189
    
    
    
    18,817Amortization expense
    
    
    4,255
    
    
    
    5,080
    
    
    
    2,904
    
    
    
    2,945
    
    
    
    2,210Minority interest in FelCor LP
    
    
    1,094
    
    
    
    279
    
    
    
    (13,677
    )
    
    
    (6,681
    )
    
    
    (17,777
    )EBITDA
    
    $
    322,126
    
    
    $
    300,460
    
    
    $
    12,475
    
    
    $
    184,950
    
    
    $
    (532
    )
 39




---



##### 



Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Impairment loss, net of minority interests
    
    $
    
    
    
    $
    (15,547
    )
    
    $
    (257,775
    )
    
    $
    (38,289
    )
    
    $
    (243,739
    )Charges related to debt extinguishment, net of
minority interests
    
    
    (811
    )
    
    
    (17,472
    )
    
    
    (11,300
    )
    
    
    (51,176
    )
    
    
    (1,223
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    
    
    
    
    1,005
    
    
    
    Asset disposition costs
    
    
    
    
    
    
    
    
    
    
    (1,300
    )
    
    
    (4,900
    )
    
    
    Abandoned projects
    
    
    (22
    )
    
    
    (112
    )
    
    
    (265
    )
    
    
    
    
    
    
    Gain on sale of hotels, net of income tax and
minority interests
    
    
    27,330
    
    
    
    40,650
    
    
    
    12,124
    
    
    
    19,422
    
    
    
    2,668Gain on sale of hotels in unconsolidated entities
    
    
    10,993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Hotel EBITDA and Hotel EBITDA Margin
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Continuing OperationsTotal revenue
    
    $
    1,021,884
    
    
    $
    991,038
    
    
    $
    914,655Retail space rental and other revenue
    
    
    (3,089
    )
    
    
    (79
    )
    
    
    (1,506
    )Hotel revenue
    
    
    1,018,795
    
    
    
    990,959
    
    
    
    913,149Hotel operating expenses
    
    
    (725,082
    )
    
    
    (698,540
    )
    
    
    (660,339
    )Hotel EBITDA
    
    $
    293,713
    
    
    $
    292,419
    
    
    $
    252,810Hotel EBITDA margin(1)
    
    
    28.8
    %
    
    
    29.5
    %
    
    
    27.7
    %
 
 (1)
    
    Hotel EBITDA as a percentage of hotel revenue. 40




---



##### 



Hotel Operating Expense Composition
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Continuing OperationsHotel departmental expenses:Room
    
    $
    204,426
    
    
    $
    199,283
    
    
    $
    187,872Food and beverage
    
    
    104,086
    
    
    
    97,012
    
    
    
    93,136Other operating departments
    
    
    20,924
    
    
    
    23,436
    
    
    
    22,446Other property related costs:Administrative and general
    
    
    86,884
    
    
    
    87,451
    
    
    
    82,607Marketing and advertising
    
    
    84,286
    
    
    
    81,113
    
    
    
    76,151Repairs and maintenance
    
    
    55,045
    
    
    
    52,710
    
    
    
    50,011Energy
    
    
    49,002
    
    
    
    49,027
    
    
    
    46,857Taxes, insurance and lease expense
    
    
    66,921
    
    
    
    57,271
    
    
    
    56,044Total departmental and other property related costs
    
    
    671,574
    
    
    
    647,303
    
    
    
    615,124Management and franchise fees
    
    
    53,508
    
    
    
    51,237
    
    
    
    45,215Hotel operating expenses
    
    $
    725,082
    
    
    $
    698,540
    
    
    $
    660,339Reconciliation of total operating expenses to hotel operating expenses:Total operating expenses
    
    $
    913,714
    
    
    $
    871,241
    
    
    $
    812,885Unconsolidated taxes, insurance and lease expense
    
    
    7,314
    
    
    
    6,273
    
    
    
    5,881Consolidated hotel lease expense
    
    
    (61,652
    )
    
    
    (61,054
    )
    
    
    (54,689
    )Abandoned projects
    
    
    (22
    )
    
    
    (33
    )
    
    
    (265
    )Corporate expenses
    
    
    (20,718
    )
    
    
    (23,308
    )
    
    
    (19,025
    )Depreciation
    
    
    (110,751
    )
    
    
    (94,579
    )
    
    
    (84,448
    )Other expenses
    
    
    (2,803
    )
    
    
    
    
    
    
    Hotel operating expenses
    
    $
    725,082
    
    
    $
    698,540
    
    
    $
    660,339
 Reconciliation of Net Income (Loss) to Hotel EBITDA
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    89,039
    
    
    $
    51,045
    
    
    $
    (251,615
    )Discontinued operations
    
    
    (33,346
    )
    
    
    (42,480
    )
    
    
    234,699Equity in income from unconsolidated entities
    
    
    (20,357
    )
    
    
    (11,537
    )
    
    
    (10,169
    )Minority interests
    
    
    (1,033
    )
    
    
    (2,508
    )
    
    
    (4,310
    )Consolidated hotel lease expense
    
    
    61,652
    
    
    
    61,054
    
    
    
    54,689Unconsolidated taxes, insurance and lease expense
    
    
    (7,314
    )
    
    
    (6,273
    )
    
    
    (5,881
    )Interest expense, net
    
    
    92,489
    
    
    
    110,867
    
    
    
    121,668Hurricane loss
    
    
    
    
    
    
    
    
    
    
    6,481Loss on early extinguishment of debt
    
    
    
    
    
    
    12,471
    
    
    
    4,037Charge-off of deferred financing costs
    
    
    
    
    
    
    3,562
    
    
    
    1,448Gain on swap termination
    
    
    
    
    
    
    (1,715
    )
    
    
    Corporate expenses
    
    
    20,718
    
    
    
    23,308
    
    
    
    19,025Depreciation
    
    
    110,751
    
    
    
    94,579
    
    
    
    84,448Retail space rental and other revenue
    
    
    (3,089
    )
    
    
    (79
    )
    
    
    (1,506
    )Other expenses
    
    
    2,803
    
    
    
    
    
    
    
    Abandoned projects
    
    
    22
    
    
    
    33
    
    
    
    265Gain on sale of condominiums
    
    
    (18,622
    )
    
    
    
    
    
    
    (Gain) loss on sale of assets
    
    
    
    
    
    
    92
    
    
    
    (469
    )Hotel EBITDA
    
    $
    293,713
    
    
    $
    292,419
    
    
    $
    252,810
 41




---



##### 



Reconciliation of Ratio of Operating Income to Total Revenues to Hotel EBITDA Margin
 Year Ended December 31,2007
    
    2006
    
    2005Ratio of operating income to total revenues
    
    
    10.6
    %
    
    
    12.1
    %
    
    
    11.1
    %Retail space rental and other revenue
    
    
    (0.3
    )
    
    
    
    
    
    
    (0.2
    )Unconsolidated taxes, insurance and lease expense
    
    
    (0.7
    )
    
    
    (0.6
    )
    
    
    (0.5
    )Consolidated lease expense
    
    
    6.1
    
    
    
    6.2
    
    
    
    6.0Other expenses
    
    
    0.2
    
    
    
    
    
    
    
    Corporate expenses
    
    
    2.0
    
    
    
    2.3
    
    
    
    2.1Depreciation
    
    
    10.9
    
    
    
    9.5
    
    
    
    9.2Hotel EBITDA margin
    
    
    28.8
    %
    
    
    29.5
    %
    
    
    27.7
    %
  FFO and EBITDA
   Hotel EBITDA and Hotel EBITDA Margin
  42




---



##### 



Use and Limitations of Non-GAAP Measures
    Liquidity and Capital Resources
     43




---



##### 



Debt
 Line of Credit.
  44




---



##### 



Mortgage Debt.
     Senior Notes.
  45




---



##### 



Other Debt.
 Construction Loan.
 Interest Rate Caps.
 46




---



##### 



Balance OutstandingEncumbered
    
    Interest Rate at
    
    Maturity
    
    December 31,Hotels
    
    December 31, 2007
    
    Date
    
    2007
    
    
    2006Line of credit(a)
    
    none
    
    L + 0.80
    
    August 2011
    
    $
    
    
    
    $
    Senior term notes
    
    none
    
    8.50(b)
    
    June 2011
    
    
    299,163
    
    
    
    298,911Senior term notes
    
    none
    
    L + 1.875
    
    December 2011
    
    
    215,000
    
    
    
    215,000Other
    
    none
    
    L + 0.40
    
    March 2008
    
    
    8,350
    
    
    
    Total line of credit
and senior debt(c)
    
    
    
    7.65
    
    
    
    
    522,513
    
    
    
    513,911Mortgage debt
    
    12 hotels
    
    L + 0.93(d)
    
    November 2008(e)
    
    
    250,000
    
    
    
    250,000Mortgage debt
    
    7 hotels
    
    6.57
    
    June 2009-2014
    
    
    89,087
    
    
    
    97,553Mortgage debt
    
    7 hotels
    
    7.32
    
    March 2009
    
    
    120,827
    
    
    
    124,263Mortgage debt
    
    8 hotels
    
    8.70
    
    May 2010
    
    
    165,981
    
    
    
    169,438Mortgage debt
    
    6 hotels
    
    8.73
    
    May 2010
    
    
    119,568
    
    
    
    122,578Mortgage debt
    
    2 hotels
    
    L + 1.55(f)
    
    May 2009(g)
    
    
    175,980
    
    
    
    Mortgage debt
    
    1 hotel
    
    L + 2.85
    
    August 2008
    
    
    15,500
    
    
    
    15,500Mortgage debt
    
    1 hotel
    
    5.81
    
    July 2016
    
    
    12,509
    
    
    
    12,861Other
    
    1 hotel
    
    9.17
    
    August 2011
    
    
    3,642
    
    
    
    4,452Construction loan(h)
    
    
    
    
    
    
    
    
    
    
    
    
    58,597Total mortgage debt(c)
    
    45 hotels
    
    6.99
    
    
    
    
    953,094
    
    
    
    855,242Total
    
    
    
    7.22%
    
    
    
    $
    1,475,607
    
    
    $
    1,369,153
 
 (a)
    
    We have a borrowing capacity of $250 million on our line of credit. The interest rate on
this line can range from 80 to 150 basis points over LIBOR, based on our leverage ratio as
defined in our line of credit agreement.(b)
    
    The interest rate on these senior notes will increase to 9.0% if the credit rating on our
senior debt is downgraded by Moodys to B1 and Standard & Poors rating remains below BB-.(c)
    
    Interest rates are calculated based on the weighted average debt outstanding at December
31, 2007.(d)
    
    We have purchased an interest rate cap for this notional amount with a cap rate of 7.8%
that expires in November 2008.(e)
    
    This loan has three one-year extension options that permit the maturity to be extended to
2011, at our option.(f)
    
    We have purchased interest rate caps for $177 million aggregate notional amounts with cap
rates of 6.25% which expire in May 2009.(g)
    
    These loans have three one-year extension options that permit the maturity to be extended
to 2012, at our option.(h)
    
    In the second quarter of 2007, we repaid in full a recourse construction loan facility for
the development of a 184-unit condominium project in Myrtle Beach, South Carolina. Contractual Obligations
  Less Than
    
    
    1   3
    
    
    4  5
    
    
    AfterTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsDebt (a)
    
    $
    1,747,622
    
    
    $
    388,647
    (b)
    
    $
    720,602
    (c)
    
    $
    553,934
    
    
    $
    84,439Operating leases
    
    
    392,978
    
    
    
    35,085
    
    
    
    66,274
    
    
    
    62,844
    
    
    
    228,775Purchase obligations
    
    
    106,157
    
    
    
    106,157
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    2,246,757
    
    
    $
    529,889
    
    
    $
    786,876
    
    
    $
    616,778
    
    
    $
    313,214
 
 (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, 2007.(b)
    
    Includes a $250 million mortgage note, maturing in 2008, that has three one-year
extension options.(c)
    
    Includes mortgage debt of $176 million, maturing in 2009, that has three one-year
extension options. 47




---



##### 



Off-Balance Sheet Arrangements
     Inflation
  48




---



##### 



Seasonality
  Critical Accounting Policies and Estimates
    
    
    We capitalize interest and certain other
costs, such as property taxes, land
leases, and property insurance and
employee costs related to hotels
undergoing major renovations and
redevelopments. Such costs capitalized
in 2007, 2006 and 2005 were $12.5
million, $10.6 million and $8.4 million,
respectively. We make estimates with
regard to when components of the
renovated asset or redevelopment project
are taken out of service or placed in
service when determining the appropriate
amount and time to capitalize these
costs. If these estimates are
inaccurate, we could capitalize too much
or too little with regard to a
particular project.
    
    Depreciation expense is based on the
estimated useful life of our assets and
amortization expense for leasehold
improvements is the shorter of the lease
term or the estimated useful life of the
related assets. The lives of the assets
are based on a number of assumptions
including cost and timing of capital
expenditures to maintain and refurbish
the assets, as well as specific market
and economic conditions. While we
believe our estimates are reasonable, a
change in the estimated lives could
affect depreciation expense and net
income (loss) or the gain or loss on the
sale of any of our hotels.
    
    Investments in hotel properties are
stated at acquisition cost and allocated
to land, property and equipment,
identifiable intangible assets and
assumed debt and other liabilities at
fair value in accordance with Statement
of Financial Accounting Standards No.
141, Business Combinations. Any
remaining unallocated acquisition costs
would be treated as goodwill. Property
and equipment are recorded at valuations
performed by management and independent
third parties. Identifiable intangible
assets are typically contracts including
ground and retail leases and management
and franchise agreements, which are
recorded at fair value, although no
value is generally allocated to
contracts which are at market terms.
Above-market and below-market contract
values are based on the present value of
the difference between contractual
amounts to be paid pursuant to the
contracts acquired and our estimate of
the fair value of contract rates for
corresponding contracts measured over
the period equal to the remaining
non-cancelable term of the contract.
Intangible assets are amortized using
the straight-line method over the
remaining non-cancelable term of the
related agreements. In making estimates
of fair values for purposes of
 49




---



##### 



allocating purchase price, we may
utilize a number of sources that may be
obtained in connection with the
acquisition or financing of a property
and other market data, including
third-party appraisals and valuations.
    
    We are required by GAAP to record an
impairment charge when we believe that
an investment in one or more of our
hotels held for investment 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 life. In
the evaluation of impairment of our
hotels, and in establishing impairment
charges, 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 carrying value, thereby
requiring 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. We are
self-insured for the first $250,000, per
occurrence, of our general liability
claims with regard to 59 of our hotels.
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
at the end of each accounting period.
These reserves represent estimates at a
given 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 delays in reporting. Because
establishment of insurance reserves is
an inherently uncertain process
involving estimates, currently
established reserves may not be
sufficient. If our insurance reserves
of $4.4 million, at December 31, 2007,
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,
2007.
    
    Our Taxable REIT Subsidiaries, or TRSs,
have cumulative potential future tax
deductions totaling $304.1 million. The
net deferred income tax asset associated
with these potential future tax
deductions was $123.3 million. We have
recorded a valuation allowance equal to
100% of our $123.3 million 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
 50




---



##### 



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
     51




---



##### 



Disclosure Regarding Forward Looking Statements
  
    
    general economic and lodging industry conditions, including the
currently unsettled capital markets, adverse changes in the overall
economy, 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;
 
    
    our overall debt levels and our ability to obtain new financing and
service debt, especially in light of currently tight capital markets;
 
    
    our inability to retain earnings;
 
    
    our liquidity and capital expenditures;
 
    
    our growth strategy and acquisition activities; and
 
    
    competitive conditions in the lodging industry.
    Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   52




---



##### 



December 31, 2007Expected Maturity DateFair2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    Total
    
    
    Value(dollars in thousands)LiabilitiesFixed rate:Debt
    
    $
    13,733
    
    
    $
    142,240
    
    
    $
    274,376
    
    
    $
    303,030
    
    
    $
    2,415
    
    
    $
    75,820
    
    
    $
    811,614
    
    
    $
    846,556Average interest rate
    
    
    7.99
    %
    
    
    7.27
    %
    
    
    8.70
    %
    
    
    8.49
    %
    
    
    6.48
    %
    
    
    6.53
    %
    
    
    8.15
    %Floating rate:Debt
    
    
    273,850
    
    
    
    177,225
    
    
    
    
    
    
    
    215,000
    
    
    
    
    
    
    
    
    
    
    
    666,075
    
    
    
    666,075Average interest
rate(a)
    
    
    4.90
    %
    
    
    5.22
    %
    
    
    
    
    
    
    6.48
    %
    
    
    
    
    
    
    
    
    
    
    5.49
    %Total debt
    
    $
    287,583
    
    
    $
    319,465
    
    
    $
    274,376
    
    
    $
    518,030
    
    
    $
    2,415
    
    
    $
    75,820
    
    
    $
    1,477,689Average interest rate
    
    
    5.05
    %
    
    
    6.13
    %
    
    
    8.70
    %
    
    
    7.65
    %
    
    
    6.48
    %
    
    
    6.53
    %
    
    
    6.95
    %Net discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,082
    )Total debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,475,607
 
 (a)
    
    The average floating interest rate represents the implied forward rates in the yield
curve at December 31, 2007. December 31, 2006Expected Maturity DateFair2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    Total
    
    
    Value(dollars in thousands)LiabilitiesFixed rate:Debt
    
    $
    12,739
    
    
    $
    13,733
    
    
    $
    142,240
    
    
    $
    274,535
    
    
    $
    303,030
    
    
    $
    84,868
    
    
    $
    831,145
    
    
    $
    887,575Average interest
rate
    
    
    7.98
    %
    
    
    7.98
    %
    
    
    7.26
    %
    
    
    8.70
    %
    
    
    8.49
    %
    
    
    6.53
    %
    
    
    8.13
    %Floating rate:Debt
    
    
    58,597
    
    
    
    265,500
    
    
    
    
    
    
    
    
    
    
    
    215,000
    
    
    
    
    
    
    
    539,097
    
    
    
    539,097Average interest
rate(a)
    
    
    7.32
    %
    
    
    6.14
    %
    
    
    
    
    
    
    
    
    
    
    7.10
    %
    
    
    
    
    
    
    6.65
    %Total debt
    
    $
    71,336
    
    
    $
    279,233
    
    
    $
    142,240
    
    
    $
    274,535
    
    
    $
    518,030
    
    
    $
    84,868
    
    
    $
    1,370,242Average interest
rate
    
    
    7.44
    %
    
    
    6.23
    %
    
    
    7.26
    %
    
    
    8.70
    %
    
    
    7.91
    %
    
    
    6.53
    %
    
    
    7.55
    %Net discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,089
    )Total debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,369,153
 
 (a)
    
    The average floating interest rate represents the implied forward rates in the yield
curve at December 31, 2006.  53




---



##### 



Item 8. Financial Statements and Supplementary Data
 FELCOR LODGING TRUST INCORPORATED
 INDEX TO FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm
    
    
    55Consolidated Balance Sheets  December 31, 2007 and 2006
    
    
    56Consolidated Statements of Operations for the years ended
December 31, 2007, 2006 and 2005
    
    
    57Consolidated Statements of Comprehensive Income (Loss) for the years ended
December 31, 2007, 2006 and 2005
    
    
    58Consolidated Statements of Stockholders Equity for the years ended
December 31, 2007, 2006 and 2005
    
    
    59Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006 and 2005
    
    
    60Notes to Consolidated Financial Statements
    
    
    61Schedule III  Real Estate and Accumulated Depreciation as of December 31, 2007
    
    
    90
 54




---



##### 



Report of Independent Registered Public Accounting Firm
      
 55




---



##### 



FELCOR LODGING TRUST INCORPORATED
 CONSOLIDATED BALANCE SHEETS
December 31, 2007 and 2006
(in thousands)
 2007
    
    
    2006ASSETSInvestment in hotels, net of accumulated depreciation of $694,464
in 2007 and $612,286 in 2006
    
    $
    2,400,057
    
    
    $
    2,044,285Investment in unconsolidated entities
    
    
    127,273
    
    
    
    111,716Hotels held for sale
    
    
    
    
    
    
    133,801Cash and cash equivalents
    
    
    57,609
    
    
    
    124,179Restricted cash
    
    
    14,846
    
    
    
    22,753Accounts receivable, net of allowance for doubtful accounts of $307
in 2007 and $962 in 2006
    
    
    37,871
    
    
    
    33,395Deferred expenses, net of accumulated amortization of $10,820
in 2007 and $8,841 in 2006
    
    
    8,149
    
    
    
    9,480Condominium development project
    
    
    1,913
    
    
    
    70,661Other assets
    
    
    36,117
    
    
    
    32,979Total assets
    
    $
    2,683,835
    
    
    $
    2,583,249LIABILITIES AND STOCKHOLDERS EQUITYDebt, net of discount of $2,082 in 2007 and $1,089 in 2006
    
    $
    1,475,607
    
    
    $
    1,369,153Distributions payable
    
    
    30,493
    
    
    
    24,078Accrued expenses and other liabilities
    
    
    134,159
    
    
    
    139,277Total liabilities
    
    
    1,640,259
    
    
    
    1,532,508Commitments and contingenciesMinority interest in FelCor LP,1,354 and 1,355 units issued and
outstanding at December 31, 2007 and 2006, respectively
    
    
    11,398
    
    
    
    11,638Minority interest in other partnerships
    
    
    25,264
    
    
    
    28,172Stockholders 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, 2007 and 2006
    
    
    309,362
    
    
    
    309,362Series C Cumulative Redeemable Preferred Stock, 68 shares,
liquidation value of $169,950, issued and outstanding at
December 31, 2007 and 2006
    
    
    169,412
    
    
    
    169,412Common stock, $.01 par value, 200,000 shares authorized and 69,413
and 69,438 shares issued, including shares in treasury, at
December 31, 2007 and 2006, respectively
    
    
    694
    
    
    
    694Additional paid-in capital
    
    
    2,062,893
    
    
    
    2,066,694Accumulated other comprehensive income
    
    
    27,450
    
    
    
    15,839Accumulated deficit
    
    
    (1,434,393
    )
    
    
    (1,409,790
    )Less: Common stock in treasury, at cost, of 6,705 and 7,386 shares at
December 31, 2007 and December 31, 2006, respectively
    
    
    (128,504
    )
    
    
    (141,280
    )Total stockholders equity
    
    
    1,006,914
    
    
    
    1,010,931Total liabilities and stockholders equity
    
    $
    2,683,835
    
    
    $
    2,583,249
  56




---



##### 



FELCOR LODGING TRUST INCORPORATED
 CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2007, 2006 and 2005
(in thousands, except per share data)
 2007
    
    
    2006
    
    
    2005Revenues:Hotel operating revenue
    
    $
    1,018,795
    
    
    $
    990,959
    
    
    $
    913,149Other revenue
    
    
    3,089
    
    
    
    79
    
    
    
    1,506Total revenues
    
    
    1,021,884
    
    
    
    991,038
    
    
    
    914,655Expenses:Hotel departmental expenses
    
    
    329,436
    
    
    
    319,731
    
    
    
    303,454Other property operating costs
    
    
    275,217
    
    
    
    270,301
    
    
    
    255,626Management and franchise fees
    
    
    53,508
    
    
    
    51,237
    
    
    
    45,215Taxes, insurance and lease expense
    
    
    121,259
    
    
    
    112,052
    
    
    
    104,852Abandoned projects
    
    
    22
    
    
    
    33
    
    
    
    265Corporate expenses
    
    
    20,718
    
    
    
    23,308
    
    
    
    19,025Depreciation
    
    
    110,751
    
    
    
    94,579
    
    
    
    84,448Other expenses
    
    
    2,803
    
    
    
    
    
    
    
    Total operating expenses
    
    
    913,714
    
    
    
    871,241
    
    
    
    812,885Operating income
    
    
    108,170
    
    
    
    119,797
    
    
    
    101,770Interest expense, net
    
    
    (92,489
    )
    
    
    (110,867
    )
    
    
    (121,668
    )Hurricane loss
    
    
    
    
    
    
    
    
    
    
    (6,481
    )Charge-off of deferred financing costs
    
    
    
    
    
    
    (3,562
    )
    
    
    (1,448
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    (12,471
    )
    
    
    (4,037
    )Gain on swap termination
    
    
    
    
    
    
    1,715
    
    
    
    Income (loss) before equity in income of unconsolidated
entities, minority interests and gain on sale of assets
    
    
    15,681
    
    
    
    (5,388
    )
    
    
    (31,864
    )Equity in income from unconsolidated entities
    
    
    20,357
    
    
    
    11,537
    
    
    
    10,169Gain (loss) on sale of other assets
    
    
    
    
    
    
    (92
    )
    
    
    469Gain on sale of condominiums
    
    
    18,622
    
    
    
    
    
    
    
    Minority interests
    
    
    1,033
    
    
    
    2,508
    
    
    
    4,310Income (loss) from continuing operations
    
    
    55,693
    
    
    
    8,565
    
    
    
    (16,916
    )Discontinued operations
    
    
    33,346
    
    
    
    42,480
    
    
    
    (234,699
    )Net income (loss)
    
    
    89,039
    
    
    
    51,045
    
    
    
    (251,615
    )Preferred dividends
    
    
    (38,713
    )
    
    
    (38,713
    )
    
    
    (39,408
    )Issuance costs of redeemed preferred stock
    
    
    
    
    
    
    
    
    
    
    (6,522
    )Net income (loss) applicable to common stockholders
    
    $
    50,326
    
    
    $
    12,332
    
    
    $
    (297,545
    )Income (loss) per common share data:Basic per common share data:Income (loss) from continuing operations
    
    $
    0.28
    
    
    $
    (0.50
    )
    
    $
    (1.06
    )Net income (loss)
    
    $
    0.82
    
    
    $
    0.20
    
    
    
    (5.01
    )Basic weighted average common shares outstanding
    
    
    61,600
    
    
    
    60,734
    
    
    
    59,436Diluted per common share data:Income (loss) from continuing operations
    
    $
    0.27
    
    
    $
    (0.50
    )
    
    $
    (1.06
    )Net income (loss)
    
    $
    0.81
    
    
    $
    0.20
    
    
    
    (5.01
    )Diluted weighted average common shares outstanding
    
    
    61,897
    
    
    
    60,734
    
    
    
    59,436Cash dividends declared on common stock
    
    $
    1.20
    
    
    $
    0.80
    
    
    $
    0.15
  57




---



##### 



FELCOR LODGING TRUST INCORPORATED
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the years ended December 31, 2007, 2006 and 2005
(in thousands)
 2007
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    89,039
    
    
    $
    51,045
    
    
    $
    (251,615
    )Unrealized holding gains (loss) from interest rate swaps
    
    
    
    
    
    
    (507
    )
    
    
    2,074Realized gain from interest rate swaps
    
    
    
    
    
    
    (1,715
    )
    
    
    Foreign currency translation adjustment
    
    
    11,611
    
    
    
    (1,541
    )
    
    
    1,748Comprehensive income (loss)
    
    $
    100,650
    
    
    $
    47,282
    
    
    $
    (247,793
    )
  58




---



##### 



FELCOR LODGING TRUST INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
For the years ended December 31, 2007, 2006, and 2005
(in thousands)
 Preferred Stock
    
    
    Common Stock
    
    
    
    
    
    
    AccumulatedNumber
    
    
    
    
    
    
    Number
    
    
    
    
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    Totalof
    
    
    
    
    
    
    of
    
    
    
    
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Treasury
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Income
    
    
    Deficit
    
    
    Stock
    
    
    EquityBalance 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
    )
    
    
    1,031,793Foreign exchange translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,541
    )
    
    
    
    
    
    
    
    
    
    
    (1,541
    )Issuance of stock awards
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    (6,371
    )
    
    
    
    
    
    
    
    
    
    
    6,933
    
    
    
    562Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (482
    )
    
    
    
    
    
    
    
    
    
    
    2,670
    
    
    
    2,188Amortization of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,169
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,169Forfeiture of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    579
    
    
    
    
    
    
    
    
    
    
    
    (1,684
    )
    
    
    (1,105
    )Common stock exchanged for treasury
shares
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (357
    )
    
    
    
    
    
    
    
    
    
    
    357
    
    
    
    Unrealized loss on hedging transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (507
    )
    
    
    
    
    
    
    
    
    
    
    (507
    )Realized gain on hedging transaction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,715
    )
    
    
    
    
    
    
    
    
    
    
    (1,715
    )Conversion of operating partnership
units into common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,870
    )
    
    
    
    
    
    
    
    
    
    
    26,870
    
    
    
    Allocation from minority units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,157
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,157Dividends declared:$0.80 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49,402
    )
    
    
    
    
    
    
    (49,402
    )$1.95 per Series A preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,117
    )
    
    
    
    
    
    
    (25,117
    )$2.00 per Series C depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,596
    )
    
    
    
    
    
    
    (13,596
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,045
    
    
    
    
    
    
    
    51,045Balance at December 31, 2006
    
    
    12,948
    
    
    
    478,774
    
    
    
    69,438
    
    
    
    694
    
    
    
    2,066,694
    
    
    
    15,839
    
    
    
    (1,409,790
    )
    
    
    (141,280
    )
    
    
    1,010,931Foreign exchange translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,611
    
    
    
    
    
    
    
    
    
    
    
    11,611Issuance of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,850
    )
    
    
    
    
    
    
    
    
    
    
    9,259
    
    
    
    409Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    5,569
    
    
    
    6,300Amortization of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,294
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,294Forfeiture of stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684
    
    
    
    
    
    
    
    
    
    
    
    (2,564
    )
    
    
    (1,880
    )Common stock exchanged for treasury
shares
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    (488
    )
    
    
    
    
    
    
    
    
    
    
    488
    
    
    
    Conversion of operating partnership
units into common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    Allocation from minority units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (148
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (148
    )Dividends declared:$1.20 per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (74,930
    )
    
    
    
    
    
    
    (74,930
    )$1.95 per Series A preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,116
    )
    
    
    
    
    
    
    (25,116
    )$2.00 per Series C depositary
preferred share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,596
    )
    
    
    
    
    
    
    (13,596
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,039
    
    
    
    
    
    
    
    89,039Balance at December 31, 2007
    
    
    12,948
    
    
    $
    478,774
    
    
    
    69,413
    
    
    $
    694
    
    
    $
    2,062,893
    
    
    $
    27,450
    
    
    $
    (1,434,393
    )
    
    $
    (128,504
    )
    
    $
    1,006,914
  59




---



##### 



FELCOR LODGING TRUST INCORPORATED
 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2007, 2006 and 2005
(in thousands)
 2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net income (loss)
    
    $
    89,039
    
    
    $
    51,045
    
    
    $
    (251,615
    )Adjustments to reconcile net income (loss) to net cash provided by operating
activities:Depreciation
    
    
    110,765
    
    
    
    110,274
    
    
    
    122,535Gain on sale of assets
    
    
    (47,195
    )
    
    
    (48,802
    )
    
    
    (12,522
    )Amortization of deferred financing fees and debt discount
    
    
    2,663
    
    
    
    4,456
    
    
    
    4,566Amortization of unearned officers and directors compensation
    
    
    4,239
    
    
    
    5,080
    
    
    
    2,904Equity in income from unconsolidated entities
    
    
    (20,357
    )
    
    
    (11,537
    )
    
    
    (10,169
    )Distributions of income from unconsolidated entities
    
    
    947
    
    
    
    3,632
    
    
    
    1,062Charges related to early debt extinguishment
    
    
    901
    
    
    
    17,344
    
    
    
    11,300Impairment loss hotels
    
    
    
    
    
    
    16,474
    
    
    
    266,751Minority interests
    
    
    785
    
    
    
    (789
    )
    
    
    (23,295
    )Changes in assets and liabilities:Accounts receivable
    
    
    (19
    )
    
    
    12,571
    
    
    
    (6,178
    )Restricted cash-operations
    
    
    3,787
    
    
    
    (2,687
    )
    
    
    (6,941
    )Other assets
    
    
    6,564
    
    
    
    (9,076
    )
    
    
    (6,057
    )Accrued expenses and other liabilities
    
    
    (14,782
    )
    
    
    (285
    )
    
    
    19,141Net cash flow provided by operating activities
    
    
    137,337
    
    
    
    147,700
    
    
    
    111,482Cash flows provided by (used in) investing activities:Acquisition of hotels
    
    
    (50,424
    )
    
    
    
    
    
    
    Improvements and additions to hotels
    
    
    (227,518
    )
    
    
    (168,525
    )
    
    
    (111,664
    )Additions to condominium project
    
    
    (8,299
    )
    
    
    (51,200
    )
    
    
    (11,546
    )Acquisition of joint venture
    
    
    
    
    
    
    
    
    
    
    (1,197
    )Cash from consolidation of venture
    
    
    
    
    
    
    
    
    
    
    3,204Proceeds from sale of hotels
    
    
    165,107
    
    
    
    346,332
    
    
    
    73,502Proceeds from sale of condominiums
    
    
    20,669
    
    
    
    
    
    
    
    Proceeds received from property damage insurance
    
    
    2,034
    
    
    
    7,535
    
    
    
    3,131Purchase of investment securities
    
    
    (7,503
    )
    
    
    
    
    
    
    Decrease in restricted cash-investing
    
    
    7,334
    
    
    
    1,008
    
    
    
    10,804Cash distributions from unconsolidated entities
    
    
    8,812
    
    
    
    5,700
    
    
    
    6,578Capital contributions to unconsolidated entities
    
    
    (4,650
    )
    
    
    (250
    )
    
    
    (1,350
    )Net cash flow provided by (used in) investing activities
    
    
    (94,438
    )
    
    
    140,600
    
    
    
    (28,538
    )Cash flows provided by (used in) financing activities:Proceeds from borrowings
    
    
    25,492
    
    
    
    540,494
    
    
    
    233,911Repayment of borrowings
    
    
    (30,312
    )
    
    
    (716,006
    )
    
    
    (292,990
    )Payment of debt issuance costs
    
    
    (1,187
    )
    
    
    (3,985
    )
    
    
    (659
    )Decrease in restricted cash-financing
    
    
    
    
    
    
    2,825
    
    
    
    4,401Net proceeds from sale of preferred stock
    
    
    
    
    
    
    
    
    
    
    164,147Redemption of preferred stock
    
    
    
    
    
    
    
    
    
    
    (169,395
    )Exercise of stock options
    
    
    6,280
    
    
    
    2,188
    
    
    
    Distributions paid to other partnerships minority holders
    
    
    (5,030
    )
    
    
    (13,167
    )
    
    
    Contribution from minority interest holders
    
    
    2,431
    
    
    
    2,519
    
    
    
    2,200Distributions paid to FelCor LP limited partners
    
    
    (1,481
    )
    
    
    (878
    )
    
    
    (414
    )Distributions paid to preferred stockholders
    
    
    (38,712
    )
    
    
    (38,713
    )
    
    
    (39,905
    )Distributions paid to common stockholders
    
    
    (68,599
    )
    
    
    (33,951
    )
    
    
    (9,032
    )Net cash flow used in financing activities
    
    
    (111,118
    )
    
    
    (258,674
    )
    
    
    (107,736
    )Effect of exchange rate changes on cash
    
    
    1,649
    
    
    
    (11
    )
    
    
    46Net change in cash and cash equivalents
    
    
    (66,570
    )
    
    
    29,615
    
    
    
    (24,746
    )Cash and cash equivalents at beginning of periods
    
    
    124,179
    
    
    
    94,564
    
    
    
    119,310Cash and cash equivalents at end of periods
    
    $
    57,609
    
    
    $
    124,179
    
    
    $
    94,564Supplemental cash flow information  Interest paid
    
    $
    101,657
    
    
    $
    118,502
    
    
    $
    132,091
  60




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization
       Brand
    
    Hotels
    
    RoomsEmbassy Suites Hotels
    
    
    47
    
    
    
    12,129Holiday Inn
    
    
    17
    
    
    
    6,305Sheraton and Sheraton Suites
    
    
    8
    
    
    
    2,681Doubletree and Doubletree Guest Suites
    
    
    7
    
    
    
    1,471Hilton and Hilton Suites
    
    
    2
    
    
    
    559Renaissance
    
    
    2
    
    
    
    921Other brands(a)
    
    
    2
    
    
    
    939Total hotels
    
    
    85
 
 (a)
    
    Includes Hotel 480 Union Square and Westin.   61




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization  (continued)
  2. Summary of Significant Accounting Policies
 Principles of Consolidation
 Use of Estimates
 Investment in Hotels
   Acquisition of Hotels Business Combinations
 62




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Investment in Unconsolidated Entities
 Hotels Held for Sale 
  Cash and Cash Equivalents
  Restricted Cash
 Deferred Expenses
 Other Assets 
 63




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Revenue Recognition
   Foreign Currency Translation
 Capitalized Cost
 Net Income (Loss) Per Common Share
  64




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Stock Compensation 3⁄4
  2005Loss from continuing operations, as reported
    
    $
    (16,916
    )Add stock based compensation included in the net loss, as reported
    
    
    2,904Less 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
    )Loss from continuing operations, pro forma
    
    $
    (16,926
    )Basic and diluted net loss from continuing operations per common share:As reported
    
    $
    (1.06
    )Pro forma
    
    $
    (1.06
    )
  Derivatives 3⁄4
 Segment Information 3⁄4
 Distributions and Dividends
 65




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2. Summary of Significant Accounting Policies  (continued)
 Minority Interests
 Income Taxes
 Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 Accounting for Income Taxes
 3. Investment in Hotels
  2007
    
    
    2006Building and improvements
    
    $
    2,307,726
    
    
    $
    2,058,563Furniture, fixtures and equipment
    
    
    502,348
    
    
    
    308,838Land
    
    
    235,058
    
    
    
    203,791Construction in progress
    
    
    49,389
    
    
    
    85,3793,094,521
    
    
    
    2,656,571Accumulated depreciation
    
    
    (694,464
    )
    
    
    (612,286
    )$
    2,400,057
    
    
    $
    2,044,285
   66




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. Acquisitions of Hotels
  AssetsInvestment in hotels (a)
    
    $
    220,583Cash
    
    
    2,228Restricted cash
    
    
    3,707Accounts receivable
    
    
    4,267Other assets
    
    
    6,009Total assets acquired
    
    
    236,794LiabilitiesDebt, net of a $1,258 discount
    
    
    175,967Accrued expenses and other liabilities
    
    
    8,175Total liabilities assumed
    
    
    184,142Net assets acquired
    
    
    52,652Net of cash
    
    $
    50,424
 
 (a)
    
    Investment in hotels was allocated to land ($30.9 million), building and
improvements ($174.3 million) and furniture, fixtures, and equipment ($15.3 million).  Year EndedDecember 31,(unaudited)2007
    
    2006Total revenues
    
    $
    1,115,482
    
    
    $
    1,085,409Net income
    
    
    81,995
    
    
    
    43,300Earnings per share  basic
    
    
    0.70
    
    
    
    0.08Earnings per share  diluted
    
    
    0.70
    
    
    
    0.08
 5. Impairment Charges
  67




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 5. Impairment Charges  (continued)
        6. Discontinued Operations
  68




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. Discontinued Operations  (continued)
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Hotel operating revenue
    
    $
    26,522
    
    
    $
    204,494
    
    
    $
    343,492Operating expenses
    
    
    (18,430
    )
    
    
    (200,958
    )
    
    
    (593,211
    )Operating income (loss)
    
    
    8,092
    
    
    
    3,536
    
    
    
    (249,719
    )Direct interest costs, net
    
    
    (14
    )
    
    
    (1,206
    )
    
    
    (10,203
    )Loss on the early extinguishment of debt
    
    
    (902
    )
    
    
    (1,311
    )
    
    
    (5,815
    )Gain on sale, net of tax
    
    
    27,988
    
    
    
    43,180
    
    
    
    12,053Minority interest
    
    
    (1,818
    )
    
    
    (1,719
    )
    
    
    18,985Income (loss) from discontinued operations
    
    $
    33,346
    
    
    $
    42,480
    
    
    $
    (234,699
    )
     7. Condominium Project
  8. Investment in Unconsolidated Entities
  69




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 8. Investment in Unconsolidated Entities  (continued)
  December 31,2007
    
    2006Balance sheet information:Investment in hotels, net of accumulated depreciation
    
    $
    288,066
    
    
    $
    260,628Total assets
    
    $
    319,295
    
    
    $
    297,712Debt
    
    $
    188,356
    
    
    $
    197,462Total liabilities
    
    $
    196,382
    
    
    $
    203,659Equity
    
    $
    122,913
    
    
    $
    94,053
   2007
    
    
    2006
    
    
    2005Total revenues
    
    $
    103,801
    
    
    $
    83,766
    
    
    $
    75,396Net income
    
    $
    38,908
    (a)
    
    $
    26,764
    
    
    $
    21,801Net income attributable to FelCor
    
    $
    19,173
    
    
    $
    13,382
    
    
    $
    11,348Preferred return
    
    
    
    
    
    
    
    
    
    
    516Additional gain on sale related to basis difference
    
    
    3,336
    (a)
    
    
    
    
    
    
    Tax related to sale of asset by venture
    
    
    (310
    )              (b)
    
    
    
    
    
    
    Depreciation of cost in excess of book value
    
    
    (1,842
    )
    
    
    (1,845
    )
    
    
    (1,695
    )Equity in income from unconsolidated entities
    
    $
    20,357
    
    
    $
    11,537
    
    
    $
    10,169
 
 (a)
    
    In the first quarter of 2007, a 50% owned joint venture entity sold its Embassy Suites
Hotel in Covina, California. The sale of this hotel resulted in a gain of $15.6 million
for this venture. Our basis in this unconsolidated hotel was lower than the ventures
basis, resulting in an additional gain on sale.(b)
    
    In the third quarter of 2007, a 50% owned joint venture entity sold its Hampton Inn in
Hays, Kansas for an insignificant book gain. This sale caused FelCor to incur a
$0.3 million tax obligation.  2007
    
    
    2006Hotel related investments
    
    $
    52,491
    
    
    $
    38,284Cost in excess of book value of hotel investments
    
    
    62,746
    
    
    
    61,253Land and condominium investments
    
    
    12,036
    
    
    
    12,179$
    127,273
    
    
    $
    111,716
  2007
    
    
    2006
    
    
    2005Hotel related investments
    
    $
    20,500
    
    
    $
    11,568
    
    
    $
    9,811Other investments
    
    
    (143
    )
    
    
    (31
    )
    
    
    358Equity in income from unconsolidated entities
    
    $
    20,357
    
    
    $
    11,537
    
    
    $
    10,169
 70




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 8. Investment in Unconsolidated Entities  (continued)
  9. Debt
  Balance OutstandingEncumbered
    
    
    Interest Rate at
    
    
    Maturity
    
    
    December 31,Hotels
    
    
    December 31, 2007
    
    
    Date
    
    
    2007
    
    
    2006Line of credit(a)
    
    none
    
    
    L + 0.80
    
    
    August 2011
    
    $
    
    
    
    $
    Senior term notes
    
    none
    
    
    8.50(b)
    
    
    June 2011
    
    
    299,163
    
    
    
    298,911Senior term notes
    
    none
    
    
    L + 1.875
    
    
    December 2011
    
    
    215,000
    
    
    
    215,000Other
    
    none
    
    
    L + 0.40
    
    
    March 2008
    
    
    8,350
    
    
    
    Total line of credit
and senior debt(c)
    
    
    
    
    
    
    7.65
    
    
    
    
    
    
    
    522,513
    
    
    
    513,911Mortgage debt
    
    12 hotels
    
    
    L + 0.93(d)
    
    
    November 2008(e)
    
    
    250,000
    
    
    
    250,000Mortgage debt
    
    7 hotels
    
    
    6.57
    
    
    June 2009-2014
    
    
    89,087
    
    
    
    97,553Mortgage debt
    
    7 hotels
    
    
    7.32
    
    
    March 2009
    
    
    120,827
    
    
    
    124,263Mortgage debt
    
    8 hotels
    
    
    8.70
    
    
    May 2010
    
    
    165,981
    
    
    
    169,438Mortgage debt
    
    6 hotels
    
    
    8.73
    
    
    May 2010
    
    
    119,568
    
    
    
    122,578Mortgage debt
    
    2 hotels
    
    
    L + 1.55(f)
    
    
    May 2009(g)
    
    
    175,980
    
    
    
    Mortgage debt
    
    1 hotel
    
    
    L + 2.85
    
    
    August 2008
    
    
    15,500
    
    
    
    15,500Mortgage debt
    
    1 hotel
    
    
    5.81
    
    
    July 2016
    
    
    12,509
    
    
    
    12,861Other
    
    1 hotel
    
    
    9.17
    
    
    August 2011
    
    
    3,642
    
    
    
    4,452Construction loan(h)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,597Total mortgage debt(c)
    
    45 hotels
    
    
    6.99
    
    
    
    
    
    
    
    953,094
    
    
    
    855,242Total
    
    
    
    
    
    
    7.22%
    
    
    
    
    
    
    $
    1,475,607
    
    
    $
    1,369,153
 
 (a)
    
    We have a borrowing capacity of $250 million on our line of credit. The interest rate on
this line can range from 80 to 150 basis points over LIBOR, based on our leverage ratio as
defined in our line of credit agreement.(b)
    
    The interest rate on these senior notes will increase to 9.0% if the credit rating on our
senior debt is downgraded by Moodys to B1 and Standard & Poors rating remains below BB-.(c)
    
    Interest rates are calculated based on the weighted average debt outstanding at
December 31, 2007.(d)
    
    We have purchased an interest rate cap for this notional amount with a cap rate of 7.8%
that expires in November 2008.(e)
    
    This loan has three one-year extension options that permit the maturity to be extended to
2011, at our option.(f)
    
    We have purchased interest rate caps for $177 million aggregate notional amounts with cap
rates of 6.25% which expire in May 2009.(g)
    
    These loans have three one-year extension options that permit the maturity to be extended
to 2012, at our option.(h)
    
    In the second quarter of 2007, we repaid in full a recourse construction loan facility for
the development of a 184-unit condominium project in Myrtle Beach, South Carolina. 71




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 9. Debt  (continued)
      5
  72




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 9. Debt  (continued)
         73




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 9. Debt  (continued)
 
    Year2008
    
    $
    287,583
    (a)2009
    
    
    319,465
    (b)2010
    
    
    274,3762011
    
    
    518,0302012
    
    
    2,4152013 and thereafter
    
    
    75,8201,477,689Discount accretion over term
    
    
    (2,082
    )$
    1,475,607
 
 (a)
    
    Includes $250 million of mortgage debt that has three one-year
extension options.(b)
    
    Includes $176 million of mortgage debt that has three one-year
extension options. 10. Derivatives
  74




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 10. Derivatives  (continued)
       75




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 11. Fair Value of Financial Instruments
   12. Income Taxes
   76




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. Income Taxes  (continued)
 Reconciliation between TRSs GAAP net loss and taxable loss:
  2007
    
    
    2006
    
    
    2005GAAP net income (loss)
    
    $
    89,039
    
    
    $
    51,045
    
    
    $
    (251,615
    )GAAP net income from REIT operations
    
    
    (75,688
    )
    
    
    (54,894
    )
    
    
    (37,237
    )GAAP net income (loss) of taxable subsidiaries
    
    
    13,351
    
    
    
    (3,849
    )
    
    
    (288,852
    )Impairment loss not deductible for tax
    
    
    
    
    
    
    7,206
    
    
    
    231,605Tax gain (loss) in excess of book gains on sale of hotels
    
    
    2,928
    
    
    
    116,308
    
    
    
    (39,842
    )Depreciation and amortization(a)
    
    
    (2,410
    )
    
    
    (3,379
    )
    
    
    (1,910
    )Employee benefits not deductible for tax
    
    
    (5,107
    )
    
    
    (1,537
    )
    
    
    1,708Other book/tax differences
    
    
    2,514
    
    
    
    (1,653
    )
    
    
    4,779Tax gain (loss) of taxable subsidiaries
    
    $
    11,276
    
    
    $
    113,096
    
    
    $
    (92,512
    )
 
 (a)
    
    The changes in book/tax differences in depreciation and amortization
principally result from book and tax basis differences, differences in depreciable
lives and accelerated depreciation methods. Summary of TRSs net deferred tax asset:
  2007
    
    
    2006Accumulated net operating losses of our TRS
    
    $
    115,565
    
    
    $
    119,850Tax property basis in excess of book
    
    
    444
    
    
    
    1,128Accrued employee benefits not deductible for tax
    
    
    7,170
    
    
    
    9,111Bad debt allowance not deductible for tax
    
    
    117
    
    
    
    367Gross deferred tax assets
    
    
    123,296
    
    
    
    130,456Valuation allowance
    
    
    (123,296
    )
    
    
    (130,456
    )Deferred tax asset after valuation allowance
    
    $
    
    
    
    $
    
  77




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. Income Taxes  (continued)
 Reconciliation between REIT GAAP net loss and taxable income loss:
  2007
    
    
    2006
    
    
    2005GAAP net income (loss) from REIT operations
    
    $
    75,688
    
    
    $
    54,894
    
    
    $
    37,237Book/tax differences, net:Depreciation and amortization(a)
    
    
    (9,246
    )
    
    
    (2,995
    )
    
    
    4,797Minority interests
    
    
    (339
    )
    
    
    (1,444
    )
    
    
    (24,204
    )Tax loss in excess of book gains on sale of hotels
    
    
    427
    
    
    
    (19,869
    )
    
    
    (21,547
    )Impairment loss not deductible for tax
    
    
    
    
    
    
    9,268
    
    
    
    35,146Other
    
    
    (618
    )
    
    
    (445
    )
    
    
    4,045Taxable income subject to distribution requirement(b)
    
    $
    65,912
    
    
    $
    39,409
    
    
    $
    35,474
 
 (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%.  78




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. Income Taxes  (continued)
 Characterization of distributions:
  2007
    
    
    2006
    
    
    2005Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Common StockOrdinary income
    
    $
    0.860
    
    
    
    71.63
    
    
    $
    0.188
    
    
    
    23.45
    
    
    $
    0.028
    
    
    
    18.76Return of capital
    
    
    0.340
    
    
    
    28.37
    
    
    
    0.612
    
    
    
    76.55
    
    
    
    0.122
    
    
    
    81.24$
    1.200
    
    
    
    100.00
    
    
    $
    0.800
    
    
    
    100.00
    
    
    $
    0.150
    
    
    
    100.00Preferred Stock  Series AOrdinary income
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    1.95
    
    
    
    100.00Return of capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    1.95
    
    
    
    100.00
    
    
    $
    1.95
    
    
    
    100.00Preferred Stock  Series BOrdinary income
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1.125
    
    
    
    100.00Return of capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1.125
    
    
    
    100.00Preferred Stock  Series COrdinary income
    
    $
    2.00
    
    
    
    100.00
    
    
    $
    2.00
    
    
    
    100.00
    
    
    $
    1.633
    
    
    
    100.00Return of capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2.00
    
    
    
    100.00
    
    
    $
    2.00
    
    
    
    100.00
    
    
    $
    1.633
    
    
    
    100.00
 13. Capital Stock
  Preferred Stock
   79




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 13. Capital Stock  (continued)
   FelCor LP Units
  14. Hotel Operating Revenue, Departmental Expenses, and Other Property Operating Costs
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Room revenue
    
    $
    830,979
    
    
    $
    809,466
    
    
    $
    742,882Food and beverage revenue
    
    
    136,793
    
    
    
    129,200
    
    
    
    121,836Other operating departments
    
    
    51,023
    
    
    
    52,293
    
    
    
    48,431Total hotel operating revenues
    
    $
    1,018,795
    
    
    $
    990,959
    
    
    $
    913,149
   80




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 14.
    
    Hotel Operating Revenue, Departmental Expenses, and Other Property Operating Costs 
(continued)
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Room
    
    $
    204,426
    
    
    $
    199,283
    
    
    $
    187,872Food and beverage
    
    
    104,086
    
    
    
    97,012
    
    
    
    93,136Other operating departments
    
    
    20,924
    
    
    
    23,436
    
    
    
    22,446Total hotel departmental expenses
    
    $
    329,436
    
    
    $
    319,731
    
    
    $
    303,454
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Hotel general and administrative expense
    
    $
    86,884
    
    
    $
    87,451
    
    
    $
    82,607Marketing
    
    
    84,286
    
    
    
    81,113
    
    
    
    76,151Repair and maintenance
    
    
    55,045
    
    
    
    52,710
    
    
    
    50,011Utilities
    
    
    49,002
    
    
    
    49,027
    
    
    
    46,857Total other property operating costs
    
    $
    275,217
    
    
    $
    270,301
    
    
    $
    255,626
  15. Taxes, Insurance and Lease Expense
  Year Ended December 31,2007
    
    
    2006
    
    
    2005Operating lease expense (a)
    
    $
    70,695
    
    
    $
    69,221
    
    
    $
    62,176Real estate and other taxes
    
    
    34,652
    
    
    
    32,790
    
    
    
    32,175Property, general liability insurance and other
    
    
    15,912
    
    
    
    10,041
    
    
    
    10,501Total taxes, insurance and lease expense
    
    $
    121,259
    
    
    $
    112,052
    
    
    $
    104,852
 
 (a)
    
    Includes hotel lease expense of $61.7 million, $61.1 million, $54.7 million,
respectively, associated with 13 hotels in 2007, 2006 and 2005 owned by unconsolidated
entities and leased to our consolidated lessees. Included in lease expense is $37.0
million, $36.1 million and $28.4 million in percentage rent for the year ended December
31, 2007, 2006 and 2005, respectively. 81




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 16. Land Leases and Hotel Rent
  Year2008
    
    $
    35,0852009
    
    
    33,1672010
    
    
    33,1072011
    
    
    32,3372012
    
    
    30,5072013 and thereafter
    
    
    228,775$
    392,978
 82




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 17. Earnings Per Share
  2007
    
    
    2006
    
    
    2005Numerator:Income (loss) from continuing operations
    
    $
    55,693
    
    
    $
    8,565
    
    
    $
    (16,916
    )Less: Preferred dividends
    
    
    (38,713
    )
    
    
    (38,713
    )
    
    
    (39,408
    )Issuance costs of redeemed preferred stock
    
    
    
    
    
    
    
    
    
    
    (6,522
    )Income (loss) from continuing operations applicable to
common stockholders
    
    
    16,980
    
    
    
    (30,148
    )
    
    
    (62,846
    )Discontinued operations
    
    
    33,346
    
    
    
    42,480
    
    
    
    (234,699
    )Net income (loss) applicable to common stockholders
    
    $
    50,326
    
    
    $
    12,332
    
    
    $
    (297,545
    )Denominator:Denominator for basic earnings (loss) per share
    
    
    61,600
    
    
    
    60,734
    
    
    
    59,436Denominator for diluted earnings per share
    
    
    61,897
    
    
    
    60,734
    
    
    
    59,436Earnings (loss) per share data:Basic:Income (loss) from continuing operations
    
    $
    0.28
    
    
    $
    (0.50
    )
    
    $
    (1.06
    )Discontinued operations
    
    $
    0.54
    
    
    $
    0.70
    
    
    $
    (3.95
    )Net income (loss)
    
    $
    0.82
    
    
    $
    0.20
    
    
    $
    (5.01
    )Diluted:Income (loss) from continuing operations
    
    $
    0.27
    
    
    $
    (0.50
    )
    
    $
    (1.06
    )Discontinued operations
    
    $
    0.54
    
    
    $
    0.70
    
    
    $
    (3.95
    )Net income (loss)
    
    $
    0.81
    
    
    $
    0.20
    
    
    
    (5.01
    )
  2007
    
    2006
    
    2005Restricted shares granted but not vested
    
    
    
    
    
    
    327
    
    
    
    648Series A convertible preferred shares
    
    
    9,985
    
    
    
    9,985
    
    
    
    9,985
  18. Commitments, Contingencies and Related Party Transactions
  83




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 18. Commitments, Contingencies and Related Party Transactions  (continued)
  .
   19. Supplemental Cash Flow Disclosure
    Year Ended December 31,2007
    
    
    2006
    
    
    2005Depreciation from continuing operations
    
    $
    110,751
    
    
    $
    94,579
    
    
    $
    84,448Depreciation from discontinued operations
    
    
    14
    
    
    
    15,695
    
    
    
    38,087Total depreciation expense
    
    $
    110,765
    
    
    $
    110,274
    
    
    $
    122,535
 84




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 19. Supplemental Cash Flow Disclosure  (continued)
       20. Stock Based Compensation Plans
  Stock Options
  2007
    
    2006
    
    2005Weighted
    
    
    
    
    
    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
    
    
    598,366
    
    
    $
    22.62
    
    
    
    1,465,257
    
    
    $
    23.41
    
    
    
    1,478,760
    
    
    $
    24.72Forfeited
    
    
    (147,639
    )
    
    $
    26.11
    
    
    
    (726,891
    )
    
    $
    25.56
    
    
    
    (13,503
    )
    
    $
    22.30Exercised
    
    
    (289,371
    )
    
    $
    21.68
    
    
    
    (140,000
    )
    
    $
    15.63
    
    
    
    
    
    
    
    Outstanding at end of year
    
    
    161,356
    
    
    $
    21.11
    
    
    
    598,366
    
    
    $
    22.62
    
    
    
    1,465,257
    
    
    $
    23.41Exercisable at end of year
    
    
    161,356
    
    
    $
    21.11
    
    
    
    598,366
    
    
    $
    22.62
    
    
    
    1,455,257
    
    
    $
    23.46
 Options Exercisable and OutstandingNumber
    
    Wgtd. Avg.Range of
    
    Outstanding at
    
    Life
    
    Wgtd Avg.Exercise Prices
    
    12/31/07
    
    Remaining
    
    Exercise Price$15.62 to $22.13
    
    
    161,356
    
    
    
    0.99
    
    
    $
    21.11
 85




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 20. Stock Based Compensation Plans  (continued)
  Restricted Stock
  2007
    
    2006
    
    2005Weighted
    
    
    
    
    
    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
    
    
    1,880,129
    
    
    $
    14.56
    
    
    
    1,549,206
    
    
    $
    13.35
    
    
    
    1,187,606
    
    
    $
    17.54Granted(a):With immediate vesting(b)
    
    
    24,100
    
    
    $
    23.61
    
    
    
    28,500
    
    
    $
    19.78
    
    
    
    22,300
    
    
    $
    13.73With 4-year pro rata vesting
    
    
    454,600
    
    
    $
    20.87
    
    
    
    293,800
    
    
    $
    18.71
    
    
    
    319,300
    
    
    $
    12.52With 5-year pro rata vesting
    
    
    5,000
    
    
    $
    21.66
    
    
    
    60,000
    
    
    $
    21.64
    
    
    
    20,000
    
    
    $
    13.85Forfeited
    
    
    (34,599
    )
    
    $
    17.80
    
    
    
    (51,377
    )
    
    $
    13.23
    
    
    
    
    
    
    
    Outstanding at end of year
    
    
    2,329,230
    
    
    $
    15.85
    
    
    
    1,880,129
    
    
    $
    14.56
    
    
    
    1,549,206
    
    
    $
    13.35Vested at end of year
    
    
    1,283,724
    
    
    $
    17.07
    
    
    
    1,108,866
    
    
    $
    17.30
    
    
    
    795,738
    
    
    $
    18.49
 
 (a)
    
    All shares granted are issued out of treasury except for 19,200 and 5,200 of
the restricted shares issued to directors during the years ended December 31, 2006 and
2005, respectively.(b)
    
    Shares awarded to directors.  21. Employee Benefits
   86




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 22. Segment Information
   Revenue
    
    
    Investment in Hotel Assets2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005California
    
    $
    208,495
    
    
    $
    195,056
    
    
    $
    178,688
    
    
    $
    547,451
    
    
    $
    413,899
    
    
    $
    517,250Texas
    
    
    114,802
    
    
    
    110,384
    
    
    
    98,870
    
    
    
    226,724
    
    
    
    207,921
    
    
    
    363,221Florida
    
    
    154,939
    
    
    
    150,339
    
    
    
    136,882
    
    
    
    505,480
    
    
    
    344,812
    
    
    
    370,863Georgia
    
    
    59,198
    
    
    
    58,745
    
    
    
    54,993
    
    
    
    126,896
    
    
    
    122,227
    
    
    
    208,665Other states
    
    
    452,730
    
    
    
    447,081
    
    
    
    418,445
    
    
    
    928,378
    
    
    
    905,352
    
    
    
    1,072,222Canada
    
    
    31,720
    
    
    
    29,433
    
    
    
    26,777
    
    
    
    65,128
    
    
    
    50,074
    
    
    
    52,158Total
    
    $
    1,021,884
    
    
    $
    991,038
    
    
    $
    914,655
    
    
    $
    2,400,057
    
    
    $
    2,044,285
    
    
    $
    2,584,379
 23. Recently Issued Statements of Financial Accounting Standards
   87




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 23. Recently Issued Statements of Financial Accounting Standards  (continued)
   24. Quarterly Operating Results (unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    Fourth2007
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTotal revenues
    
    $
    248,672
    
    
    $
    266,244
    
    
    $
    258,462
    
    
    $
    248,506Net income (loss) from continuing operations
    
    $
    20,855
    
    
    $
    29,384
    
    
    $
    8,199
    
    
    $
    (2,745
    )Discontinued operations
    
    $
    8,307
    
    
    $
    25,792
    
    
    $
    (206
    )
    
    $
    (547
    )Net income (loss)
    
    $
    29,162
    
    
    $
    55,176
    
    
    $
    7,993
    
    
    $
    (3,292
    )Net income (loss) applicable to common stockholders
    
    $
    19,484
    
    
    $
    45,498
    
    
    $
    (1,685
    )
    
    $
    (12,971
    )Comprehensive income
    
    $
    29,495
    
    
    $
    62,022
    
    
    $
    12,872
    
    
    $
    (3,739
    )Basic and diluted per common share data:Net income (loss) from continuing operations
    
    $
    0.18
    
    
    $
    0.32
    
    
    $
    (0.02
    )
    
    $
    (0.20
    )Discontinued operations
    
    $
    0.14
    
    
    $
    0.41
    
    
    $
    (0.01
    )
    
    $
    (0.01
    )Net income (loss)
    
    $
    0.32
    
    
    $
    0.73
    
    
    $
    (0.03
    )
    
    $
    (0.21
    )Basic weighted average common shares outstanding
    
    
    61,374
    
    
    
    61,587
    
    
    
    61,652
    
    
    
    61,649Diluted weighted average common shares outstanding
    
    
    61,762
    
    
    
    62,032
    
    
    
    61,652
    
    
    
    61,649
 88




---



##### 



FELCOR LODGING TRUST INCORPORATED
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 24. Quarterly Operating Results (unaudited)  (continued)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2006
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTotal revenues
    
    $
    251,407
    
    
    $
    259,264
    
    
    $
    247,464
    
    
    $
    232,902Net income (loss) from continuing operations
    
    $
    6,920
    
    
    $
    12,534
    
    
    $
    4,272
    
    
    $
    (15,044
    )Discontinued operations
    
    $
    2,932
    
    
    $
    (2,389
    )
    
    $
    15,790
    
    
    $
    26,030Net income
    
    $
    9,852
    
    
    $
    10,145
    
    
    $
    20,062
    
    
    $
    10,986Net income applicable to common stockholders
    
    $
    174
    
    
    $
    467
    
    
    $
    10,397
    
    
    $
    1,295Comprehensive income
    
    $
    9,560
    
    
    $
    12,305
    
    
    $
    19,266
    
    
    $
    6,151Basic and diluted per common share data:Net income (loss) from continuing operations
    
    $
    (0.05
    )
    
    $
    0.05
    
    
    $
    (0.09
    )
    
    $
    (0.40
    )Discontinued operations
    
    $
    0.05
    
    
    $
    (0.04
    )
    
    $
    0.26
    
    
    $
    0.42Net income
    
    $
    
    
    
    $
    0.01
    
    
    $
    0.17
    
    
    $
    0.02Basic weighted average common shares outstanding
    
    
    59,660
    
    
    
    60,355
    
    
    
    61,148
    
    
    
    61,268Diluted weighted average common shares outstanding
    
    
    59,660
    
    
    
    60,626
    
    
    
    61,148
    
    
    
    61,268
 89




---



##### 



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation
as of December 31, 2007
(in thousands)
  Cost CapitalizedSubsequent to
    
    Gross Amounts at WhichInitial Cost
    
    Acquisition
    
    Carried at Close of Period
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    Life UponBuilding
    
    
    
    
    
    Building
    
    
    
    
    
    Building
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    and
    
    
    
    
    
    and
    
    
    
    
    
    Buildings &
    
    Year
    
    Date
    
    DepreciationLocation
    
    Encumbrances
    
    Land
    
    Improvements
    
    Land
    
    Improvements
    
    Land
    
    Improvements
    
    Total
    
    Improvements
    
    Opened
    
    Acquired
    
    is ComputedBirmingham, AL (1)
    
    $
    15,224
    
    
    $
    2,843
    
    
    $
    29,286
    
    
    $
    0
    
    
    $
    2,944
    
    
    $
    2,843
    
    
    $
    32,230
    
    
    $
    35,073
    
    
    $
    8,979
    
    
    
    1987
    
    
    1/3/1996
    
    15 - 40 YrsPhoenix  Biltmore, AZ (1)
    
    
    20,059
    
    
    
    4,694
    
    
    
    38,998
    
    
    
    0
    
    
    
    2,598
    
    
    
    4,694
    
    
    
    41,596
    
    
    
    46,290
    
    
    
    12,022
    
    
    
    1985
    
    
    1/3/1996
    
    15 - 40 YrsPhoenix Crescent Hotel, AZ (2)
    
    
    23,394
    
    
    
    3,608
    
    
    
    29,583
    
    
    
    0
    
    
    
    1,672
    
    
    
    3,608
    
    
    
    31,255
    
    
    
    34,863
    
    
    
    8,091
    
    
    
    1986
    
    
    6/30/1997
    
    15 - 40 YrsPhoenix Tempe, AZ (1)
    
    
    22,944
    
    
    
    3,951
    
    
    
    34,371
    
    
    
    0
    
    
    
    1,837
    
    
    
    3,951
    
    
    
    36,208
    
    
    
    40,159
    
    
    
    8,566
    
    
    
    1986
    
    
    5/4/1998
    
    15 - 40 YrsDana Point  Doheny Beach, CA (3)
    
    
    0
    
    
    
    1,787
    
    
    
    15,545
    
    
    
    0
    
    
    
    2,267
    
    
    
    1,787
    
    
    
    17,812
    
    
    
    19,599
    
    
    
    4,639
    
    
    
    1992
    
    
    2/21/1997
    
    15 - 40 YrsIndian Wells  Esmeralda, CA (4)
    
    
    87,357
    
    
    
    30,948
    
    
    
    73,507
    
    
    
    0
    
    
    
    0
    
    
    
    30,948
    
    
    
    73,507
    
    
    
    104,455
    
    
    
    0
    
    
    
    1989
    
    
    12/16/2007
    
    15 - 40 YrsLos Angeles  Anaheim (Located near Disneyland Park), CA
(1)
    
    
    23,595
    
    
    
    2,548
    
    
    
    14,832
    
    
    
    0
    
    
    
    1,608
    
    
    
    2,548
    
    
    
    16,440
    
    
    
    18,988
    
    
    
    4,719
    
    
    
    1987
    
    
    1/3/1996
    
    15 - 40 YrsLos Angeles International Airport  South, CA (1)
    
    
    0
    
    
    
    2,660
    
    
    
    17,997
    
    
    
    0
    
    
    
    1,458
    
    
    
    2,660
    
    
    
    19,455
    
    
    
    22,115
    
    
    
    6,209
    
    
    
    1985
    
    
    3/27/1996
    
    15 - 40 YrsMilpitas  Silicon Valley, CA (1)
    
    
    26,219
    
    
    
    4,021
    
    
    
    23,677
    
    
    
    0
    
    
    
    2,900
    
    
    
    4,021
    
    
    
    26,577
    
    
    
    30,598
    
    
    
    7,534
    
    
    
    1987
    
    
    1/3/1996
    
    15 - 40 YrsNapa Valley, CA (1)
    
    
    13,774
    
    
    
    3,287
    
    
    
    14,205
    
    
    
    0
    
    
    
    1,882
    
    
    
    3,287
    
    
    
    16,087
    
    
    
    19,374
    
    
    
    4,532
    
    
    
    1985
    
    
    5/8/1996
    
    15 - 40 YrsOxnard  Mandalay Beach Resort & Conference Center, CA (1)
    
    
    0
    
    
    
    2,930
    
    
    
    22,125
    
    
    
    0
    
    
    
    4,499
    
    
    
    2,930
    
    
    
    26,624
    
    
    
    29,554
    
    
    
    7,254
    
    
    
    1986
    
    
    5/8/1996
    
    15 - 40 YrsSan Diego  On the Bay, CA (5)
    
    
    0
    
    
    
    0
    
    
    
    68,229
    
    
    
    0
    
    
    
    5,102
    
    
    
    0
    
    
    
    73,331
    
    
    
    73,331
    
    
    
    19,609
    
    
    
    1965
    
    
    7/28/1998
    
    15 - 40 YrsSan Francisco  Airport  Burlingame, CA (1)
    
    
    0
    
    
    
    0
    
    
    
    39,929
    
    
    
    0
    
    
    
    1,663
    
    
    
    0
    
    
    
    41,592
    
    
    
    41,592
    
    
    
    12,187
    
    
    
    1986
    
    
    11/6/1995
    
    15 - 40 YrsSan Francisco  Airport  South San Francisco, CA (1)
    
    
    23,454
    
    
    
    3,418
    
    
    
    31,737
    
    
    
    0
    
    
    
    3,229
    
    
    
    3,418
    
    
    
    34,966
    
    
    
    38,384
    
    
    
    9,915
    
    
    
    1988
    
    
    1/3/1996
    
    15 - 40 YrsSan Francisco  Fishermans Wharf, CA (5)
    
    
    0
    
    
    
    0
    
    
    
    61,883
    
    
    
    0
    
    
    
    1,886
    
    
    
    0
    
    
    
    63,769
    
    
    
    63,769
    
    
    
    24,334
    
    
    
    1970
    
    
    7/28/1998
    
    15 - 40 YrsSan Francisco  Union Square, CA (6)
    
    
    0
    
    
    
    8,466
    
    
    
    73,684
    
    
    
    (434
    )
    
    
    4,384
    
    
    
    8,032
    
    
    
    78,068
    
    
    
    86,100
    
    
    
    18,380
    
    
    
    1970
    
    
    7/28/1998
    
    15 - 40 YrsSanta Barbara, CA (5)
    
    
    0
    
    
    
    1,683
    
    
    
    14,647
    
    
    
    4
    
    
    
    1,345
    
    
    
    1,687
    
    
    
    15,992
    
    
    
    17,679
    
    
    
    3,567
    
    
    
    1969
    
    
    7/28/1998
    
    15 - 40 YrsSanta Monica, CA (5)
    
    
    0
    
    
    
    10,200
    
    
    
    16,580
    
    
    
    0
    
    
    
    232
    
    
    
    10,200
    
    
    
    16,812
    
    
    
    27,012
    
    
    
    1,616
    
    
    
    1967
    
    
    3/11/2004
    
    15 - 40 YrsToronto  Airport, Canada (5)
    
    
    0
    
    
    
    0
    
    
    
    21,041
    
    
    
    0
    
    
    
    17,355
    
    
    
    0
    
    
    
    38,396
    
    
    
    38,396
    
    
    
    9,806
    
    
    
    1970
    
    
    7/28/1998
    
    15 - 40 YrsToronto  Yorkdale, Canada (5)
    
    
    0
    
    
    
    1,566
    
    
    
    13,633
    
    
    
    823
    
    
    
    14,814
    
    
    
    2,389
    
    
    
    28,447
    
    
    
    30,836
    
    
    
    7,837
    
    
    
    1970
    
    
    7/28/1998
    
    15 - 40 YrsWilmington, DE (7)
    
    
    10,326
    
    
    
    1,379
    
    
    
    12,487
    
    
    
    0
    
    
    
    10,871
    
    
    
    1,379
    
    
    
    23,358
    
    
    
    24,737
    
    
    
    5,462
    
    
    
    1972
    
    
    3/20/1998
    
    15 - 40 YrsBoca Raton, FL (1)
    
    
    5,163
    
    
    
    1,868
    
    
    
    16,253
    
    
    
    0
    
    
    
    1,947
    
    
    
    1,868
    
    
    
    18,200
    
    
    
    20,068
    
    
    
    5,046
    
    
    
    1989
    
    
    2/28/1996
    
    15 - 40 YrsCocoa Beach  Oceanfront, FL (5)
    
    
    0
    
    
    
    2,285
    
    
    
    19,892
    
    
    
    7
    
    
    
    13,504
    
    
    
    2,292
    
    
    
    33,396
    
    
    
    35,688
    
    
    
    9,381
    
    
    
    1960
    
    
    7/28/1998
    
    15 - 40 YrsDeerfield Beach, FL (1)
    
    
    28,420
    
    
    
    4,523
    
    
    
    29,443
    
    
    
    68
    
    
    
    3,652
    
    
    
    4,591
    
    
    
    33,095
    
    
    
    37,686
    
    
    
    9,193
    
    
    
    1987
    
    
    1/3/1996
    
    15 - 40 YrsFt. Lauderdale  17th Street, FL (1)
    
    
    20,178
    
    
    
    5,329
    
    
    
    47,850
    
    
    
    (163
    )
    
    
    3,468
    
    
    
    5,166
    
    
    
    51,318
    
    
    
    56,484
    
    
    
    14,958
    
    
    
    1986
    
    
    1/3/1996
    
    15 - 40 YrsFt. Lauderdale (Cypress Creek), FL (8)
    
    
    11,264
    
    
    
    3,009
    
    
    
    26,177
    
    
    
    0
    
    
    
    1,942
    
    
    
    3,009
    
    
    
    28,119
    
    
    
    31,128
    
    
    
    6,721
    
    
    
    1986
    
    
    5/4/1998
    
    15 - 40 YrsJacksonville  Baymeadows, FL (1)
    
    
    23,590
    
    
    
    1,130
    
    
    
    9,608
    
    
    
    0
    
    
    
    7,518
    
    
    
    1,130
    
    
    
    17,126
    
    
    
    18,256
    
    
    
    4,847
    
    
    
    1986
    
    
    7/28/1994
    
    15 - 40 YrsMiami International Airport, FL (1)
    
    
    16,312
    
    
    
    4,135
    
    
    
    24,950
    
    
    
    0
    
    
    
    3,670
    
    
    
    4,135
    
    
    
    28,620
    
    
    
    32,755
    
    
    
    7,850
    
    
    
    1983
    
    
    7/28/1998
    
    15 - 40 YrsOrlando  International Airport, FL (5)
    
    
    9,198
    
    
    
    2,549
    
    
    
    22,188
    
    
    
    6
    
    
    
    2,841
    
    
    
    2,555
    
    
    
    25,029
    
    
    
    27,584
    
    
    
    6,034
    
    
    
    1984
    
    
    7/28/1998
    
    15 - 40 YrsOrlando  International Drive  Resort, FL (5)
    
    
    0
    
    
    
    5,108
    
    
    
    44,460
    
    
    
    13
    
    
    
    10,036
    
    
    
    5,121
    
    
    
    54,496
    
    
    
    59,617
    
    
    
    13,724
    
    
    
    1972
    
    
    7/28/1998
    
    15 - 40 YrsOrlando International Drive/Convention Center, FL (1)
    
    
    22,843
    
    
    
    1,632
    
    
    
    13,870
    
    
    
    0
    
    
    
    2,739
    
    
    
    1,632
    
    
    
    16,609
    
    
    
    18,241
    
    
    
    5,203
    
    
    
    1985
    
    
    7/28/1994
    
    15 - 40 YrsOrlando (North), FL (1)
    
    
    0
    
    
    
    1,673
    
    
    
    14,218
    
    
    
    (18
    )
    
    
    8,070
    
    
    
    1,655
    
    
    
    22,288
    
    
    
    23,943
    
    
    
    6,797
    
    
    
    1985
    
    
    7/28/1994
    
    15 - 40 YrsOrlando  Walt Disney World Resort, FL (3)
    
    
    0
    
    
    
    0
    
    
    
    28,092
    
    
    
    0
    
    
    
    1,101
    
    
    
    0
    
    
    
    29,193
    
    
    
    29,193
    
    
    
    7,093
    
    
    
    1987
    
    
    7/28/1997
    
    15 - 40 YrsSt. Petersburg  Vinoy, FL (4)
    
    
    88,623
    
    
    
    0
    
    
    
    100,823
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    100,823
    
    
    
    100,823
    
    
    
    0
    
    
    
    1925
    
    
    12/16/07
    
    15 - 40 YrsTampa  On Tampa Bay, FL (3)
    
    
    12,950
    
    
    
    2,142
    
    
    
    18,639
    
    
    
    1
    
    
    
    2,522
    
    
    
    2,143
    
    
    
    21,161
    
    
    
    23,304
    
    
    
    5,496
    
    
    
    1986
    
    
    7/28/1997
    
    15 - 40 Yrs
 90




---



##### 



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2007
(in thousands)
  Cost CapitalizedSubsequent to
    
    Gross Amounts at WhichInitial Cost
    
    Acquisition
    
    Carried at Close of Period
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    Life UponBuilding
    
    
    
    
    
    Building
    
    
    
    
    
    Building
    
    
    
    
    
    Depreciation
    
    
    
    
    
    
    
    Whichand
    
    
    
    
    
    and
    
    
    
    
    
    and
    
    
    
    
    
    Buildings &
    
    Year
    
    Date
    
    DepreciationLocation
    
    Encumbrances
    
    Land
    
    Improvements
    
    Land
    
    Improvements
    
    Land
    
    Improvements
    
    Total
    
    Improvements
    
    Opened
    
    Acquired
    
    is ComputedAtlanta  Airport, GA (1)
    
    
    12,673
    
    
    
    2,568
    
    
    
    22,342
    
    
    
    0
    
    
    
    2,236
    
    
    
    2,568
    
    
    
    24,578
    
    
    
    27,146
    
    
    
    5,690
    
    
    
    1989
    
    
    5/4/1998
    
    15 - 40 YrsAtlanta  Buckhead, GA (1)
    
    
    34,153
    
    
    
    7,303
    
    
    
    38,996
    
    
    
    (300
    )
    
    
    1,936
    
    
    
    7,003
    
    
    
    40,932
    
    
    
    47,935
    
    
    
    11,294
    
    
    
    1988
    
    
    10/17/1996
    
    15 - 40 YrsAtlanta  Galleria, GA (8)
    
    
    15,596
    
    
    
    5,052
    
    
    
    28,507
    
    
    
    0
    
    
    
    1,808
    
    
    
    5,052
    
    
    
    30,315
    
    
    
    35,367
    
    
    
    7,842
    
    
    
    1990
    
    
    6/30/1997
    
    15 - 40 YrsAtlanta  Gateway-Atlanta Airport, GA (2)
    
    
    0
    
    
    
    5,113
    
    
    
    22,857
    
    
    
    0
    
    
    
    1,264
    
    
    
    5,113
    
    
    
    24,121
    
    
    
    29,234
    
    
    
    6,096
    
    
    
    1986
    
    
    6/30/1997
    
    15 - 40 YrsChicago  Northshore/Deerfield (Northbrook), IL (1)
    
    
    14,800
    
    
    
    2,305
    
    
    
    20,054
    
    
    
    0
    
    
    
    1,648
    
    
    
    2,305
    
    
    
    21,702
    
    
    
    24,007
    
    
    
    5,984
    
    
    
    1987
    
    
    6/20/1996
    
    15 - 40 YrsChicago OHare Airport, IL (2)
    
    
    21,661
    
    
    
    8,178
    
    
    
    37,043
    
    
    
    0
    
    
    
    3,246
    
    
    
    8,178
    
    
    
    40,289
    
    
    
    48,467
    
    
    
    10,204
    
    
    
    1994
    
    
    6/30/1997
    
    15 - 40 YrsIndianapolis North, IN (1)
    
    
    12,509
    
    
    
    5,125
    
    
    
    13,821
    
    
    
    0
    
    
    
    3,789
    
    
    
    5,125
    
    
    
    17,610
    
    
    
    22,735
    
    
    
    7,283
    
    
    
    1986
    
    
    8/1/1996
    
    15 - 40 YrsLexington  Lexington Green, KY (9)
    
    
    17,721
    
    
    
    1,955
    
    
    
    13,604
    
    
    
    0
    
    
    
    472
    
    
    
    1,955
    
    
    
    14,076
    
    
    
    16,031
    
    
    
    4,116
    
    
    
    1987
    
    
    1/10/1996
    
    15 - 40 YrsBaton Rouge, LA (1)
    
    
    9,787
    
    
    
    2,350
    
    
    
    19,092
    
    
    
    1
    
    
    
    1,900
    
    
    
    2,351
    
    
    
    20,992
    
    
    
    23,343
    
    
    
    5,997
    
    
    
    1985
    
    
    1/3/1996
    
    15 - 40 YrsNew Orleans, LA (1)
    
    
    29,153
    
    
    
    3,647
    
    
    
    31,993
    
    
    
    0
    
    
    
    9,458
    
    
    
    3,647
    
    
    
    41,451
    
    
    
    45,098
    
    
    
    13,364
    
    
    
    1984
    
    
    12/1/1994
    
    15 - 40 YrsNew Orleans  French Quarter, LA (5)
    
    
    0
    
    
    
    0
    
    
    
    50,732
    
    
    
    14
    
    
    
    8,518
    
    
    
    14
    
    
    
    59,250
    
    
    
    59,264
    
    
    
    13,858
    
    
    
    1969
    
    
    7/28/1998
    
    15 - 40 YrsBoston  Beacon Hill, MA (5)
    
    
    0
    
    
    
    0
    
    
    
    45,192
    
    
    
    0
    
    
    
    8,419
    
    
    
    0
    
    
    
    53,611
    
    
    
    53,611
    
    
    
    14,979
    
    
    
    1968
    
    
    7/28/1998
    
    15 - 40 YrsBoston  Marlborough, MA (1)
    
    
    18,304
    
    
    
    948
    
    
    
    8,143
    
    
    
    761
    
    
    
    14,019
    
    
    
    1,709
    
    
    
    22,162
    
    
    
    23,871
    
    
    
    5,983
    
    
    
    1988
    
    
    6/30/1995
    
    15 - 40 YrsBaltimore  BWI Airport, MD (1)
    
    
    22,642
    
    
    
    2,568
    
    
    
    22,433
    
    
    
    (2
    )
    
    
    2,534
    
    
    
    2,566
    
    
    
    24,967
    
    
    
    27,533
    
    
    
    6,602
    
    
    
    1987
    
    
    3/20/1997
    
    15 - 40 YrsMinneapolis  Airport, MN (1)
    
    
    19,332
    
    
    
    5,417
    
    
    
    36,508
    
    
    
    24
    
    
    
    1,904
    
    
    
    5,441
    
    
    
    38,412
    
    
    
    43,853
    
    
    
    11,132
    
    
    
    1986
    
    
    11/6/1995
    
    15 - 40 YrsMinneapolis  Bloomington, MN (1)
    
    
    18,350
    
    
    
    2,038
    
    
    
    17,731
    
    
    
    0
    
    
    
    1,320
    
    
    
    2,038
    
    
    
    19,051
    
    
    
    21,089
    
    
    
    5,051
    
    
    
    1980
    
    
    2/1/1997
    
    15 - 40 YrsSt Paul- Downtown, MN (1)
    
    
    3,642
    
    
    
    1,156
    
    
    
    17,315
    
    
    
    0
    
    
    
    1,159
    
    
    
    1,156
    
    
    
    18,474
    
    
    
    19,630
    
    
    
    5,308
    
    
    
    1983
    
    
    11/15/1995
    
    15 - 40 YrsCharlotte SouthPark, NC (3)
    
    
    0
    
    
    
    1,458
    
    
    
    12,681
    
    
    
    0
    
    
    
    2,548
    
    
    
    1,458
    
    
    
    15,229
    
    
    
    16,687
    
    
    
    2,251
    
    
    
    N/A
    
    
    7/12/2002
    
    15 - 40 YrsRaleigh, NC (3)
    
    
    17,290
    
    
    
    2,124
    
    
    
    18,476
    
    
    
    0
    
    
    
    2,015
    
    
    
    2,124
    
    
    
    20,491
    
    
    
    22,615
    
    
    
    5,166
    
    
    
    1987
    
    
    7/28/1997
    
    15 - 40 YrsPiscataway-Somerset, NJ (1)
    
    
    18,508
    
    
    
    1,755
    
    
    
    17,563
    
    
    
    0
    
    
    
    2,039
    
    
    
    1,755
    
    
    
    19,602
    
    
    
    21,357
    
    
    
    5,583
    
    
    
    1988
    
    
    1/10/1996
    
    15 - 40 YrsPhiladelphia Historic District, PA (5)
    
    
    0
    
    
    
    3,164
    
    
    
    27,535
    
    
    
    7
    
    
    
    8,924
    
    
    
    3,171
    
    
    
    36,459
    
    
    
    39,630
    
    
    
    9,183
    
    
    
    1972
    
    
    7/28/1998
    
    15 - 40 YrsPhiladelphia Society Hill, PA (2)
    
    
    29,459
    
    
    
    4,542
    
    
    
    45,121
    
    
    
    0
    
    
    
    3,970
    
    
    
    4,542
    
    
    
    49,091
    
    
    
    53,633
    
    
    
    12,297
    
    
    
    1986
    
    
    10/1/1997
    
    15 - 40 YrsPittsburgh at University Center (Oakland), PA (5)
    
    
    15,500
    
    
    
    0
    
    
    
    25,031
    
    
    
    0
    
    
    
    2,662
    
    
    
    0
    
    
    
    27,693
    
    
    
    27,693
    
    
    
    6,677
    
    
    
    1988
    
    
    11/1/1998
    
    15 - 40 YrsCharleston -Mills House (Historic Downtown), SC (5)
    
    
    25,538
    
    
    
    3,251
    
    
    
    28,295
    
    
    
    7
    
    
    
    4,420
    
    
    
    3,258
    
    
    
    32,715
    
    
    
    35,973
    
    
    
    6,862
    
    
    
    1982
    
    
    7/28/1998
    
    15 - 40 YrsMyrtle Beach  At Kingston Plantation, SC (1)
    
    
    0
    
    
    
    2,940
    
    
    
    24,988
    
    
    
    0
    
    
    
    2,715
    
    
    
    2,940
    
    
    
    27,703
    
    
    
    30,643
    
    
    
    7,442
    
    
    
    1987
    
    
    12/5/1996
    
    15 - 40 YrsMyrtle Beach Resort (10)
    
    
    0
    
    
    
    9,000
    
    
    
    19,844
    
    
    
    5
    
    
    
    15,164
    
    
    
    9,005
    
    
    
    35,008
    
    
    
    44,013
    
    
    
    7,246
    
    
    
    1974
    
    
    7/23/2002
    
    15 - 40 YrsNashville- Airport/Opryland Area, TN (1)
    
    
    0
    
    
    
    1,118
    
    
    
    9,506
    
    
    
    0
    
    
    
    1,105
    
    
    
    1,118
    
    
    
    10,611
    
    
    
    11,729
    
    
    
    4,028
    
    
    
    1985
    
    
    7/28/1994
    
    15 - 40 YrsNashville  Opryland/Airport (Briley Parkway), TN (5)
    
    
    0
    
    
    
    0
    
    
    
    27,734
    
    
    
    0
    
    
    
    3,067
    
    
    
    0
    
    
    
    30,801
    
    
    
    30,801
    
    
    
    8,777
    
    
    
    1981
    
    
    7/28/1998
    
    15 - 40 YrsAustin, TX (3)
    
    
    9,027
    
    
    
    2,508
    
    
    
    21,908
    
    
    
    0
    
    
    
    2,683
    
    
    
    2,508
    
    
    
    24,591
    
    
    
    27,099
    
    
    
    6,545
    
    
    
    1987
    
    
    3/20/1997
    
    15 - 40 YrsCorpus Christi, TX (1)
    
    
    4,766
    
    
    
    1,113
    
    
    
    9,618
    
    
    
    51
    
    
    
    4,258
    
    
    
    1,164
    
    
    
    13,876
    
    
    
    15,040
    
    
    
    3,662
    
    
    
    1984
    
    
    7/19/1995
    
    15 - 40 YrsDallas  DFW International Airport South, TX (1)
    
    
    19,302
    
    
    
    4,041
    
    
    
    35,156
    
    
    
    0
    
    
    
    1,075
    
    
    
    4,041
    
    
    
    36,231
    
    
    
    40,272
    
    
    
    8,642
    
    
    
    1985
    
    
    7/28/1998
    
    15 - 40 YrsDallas  Love Field, TX (1)
    
    
    16,500
    
    
    
    1,934
    
    
    
    16,674
    
    
    
    0
    
    
    
    2,990
    
    
    
    1,934
    
    
    
    19,664
    
    
    
    21,598
    
    
    
    5,553
    
    
    
    1986
    
    
    3/29/1995
    
    15 - 40 YrsDallas  Market Center, TX (1)
    
    
    0
    
    
    
    2,560
    
    
    
    23,751
    
    
    
    0
    
    
    
    2,114
    
    
    
    2,560
    
    
    
    25,865
    
    
    
    28,425
    
    
    
    6,450
    
    
    
    1980
    
    
    6/30/1997
    
    15 - 40 YrsDallas  Park Central, TX (11)
    
    
    0
    
    
    
    4,513
    
    
    
    43,125
    
    
    
    762
    
    
    
    6,083
    
    
    
    5,275
    
    
    
    49,208
    
    
    
    54,483
    
    
    
    12,503
    
    
    
    1983
    
    
    6/30/1997
    
    15 - 40 YrsHouston  Medical Center, TX (12)
    
    
    0
    
    
    
    0
    
    
    
    22,027
    
    
    
    5
    
    
    
    4,261
    
    
    
    5
    
    
    
    26,288
    
    
    
    26,293
    
    
    
    5,693
    
    
    
    1984
    
    
    7/28/1998
    
    15 - 40 YrsSan Antonio  International Airport, TX (5)
    
    
    23,800
    
    
    
    3,351
    
    
    
    29,168
    
    
    
    (185
    )
    
    
    3,663
    
    
    
    3,166
    
    
    
    32,831
    
    
    
    35,997
    
    
    
    7,834
    
    
    
    1981
    
    
    7/28/1998
    
    15 - 40 YrsBurlington Hotel & Conference Center, VT (2)
    
    
    18,195
    
    
    
    3,136
    
    
    
    27,283
    
    
    
    (2
    )
    
    
    2,498
    
    
    
    3,134
    
    
    
    29,781
    
    
    
    32,915
    
    
    
    7,176
    
    
    
    1967
    
    
    12/4/1997
    
    15 - 40 Yrs$
    953,095
    
    
    $
    233,603
    
    
    $
    2,016,286
    
    
    $
    1,455
    
    
    $
    291,440
    
    
    $
    235,058
    
    
    $
    2,307,726
    
    
    $
    2,542,784
    
    
    $
    567,954
 91




---



##### 



FELCOR LODGING TRUST INCORPORATED
Schedule III  Real Estate and Accumulated Depreciation  (continued)
as of December 31, 2007
(in thousands)
 
 (1)    Embassy Suites Hotel(2)    Sheraton(3)    Doubletree Guest Suites(4)    Renaissance Resort(5)    Holiday Inn(6)    Hotel 480 Union Square(7)    Doubletree(8)    Sheraton Suites(9)    Hilton Suites(10)  Hilton(11)  Westin(12)  Holiday Inn & Suites
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Reconciliation of Land and Buildings and ImprovementsBalance at beginning of period
    
    $
    2,262,354
    
    
    $
    3,331,708
    
    
    $
    3,513,950Additions during period:Acquisitions
    
    
    205,278
    
    
    
    
    
    
    
    18,949Improvements
    
    
    75,152
    
    
    
    18,434
    
    
    
    21,735Deductions during period:Sale of properties
    
    
    
    
    
    
    (812,222
    )
    
    
    (140,071
    )Hotels held for sale
    
    
    
    
    
    
    (275,566
    )
    
    
    Foreclosures
    
    
    
    
    
    
    
    
    
    
    (82,885
    )Balance at end of period
    
    $
    2,542,784
    
    
    $
    2,262,354
    
    
    $
    3,331,708Reconciliation of Accumulated DepreciationBalance at beginning of period
    
    $
    503,145
    
    
    $
    646,484
    
    
    $
    590,065Additions during period:Depreciation for the period
    
    
    64,809
    
    
    
    51,318
    
    
    
    79,231Deductions during period:Sale of properties
    
    
    
    
    
    
    (144,686
    )
    
    
    (22,812
    )Hotels held for sale
    
    
    
    
    
    
    (49,971
    )
    
    
    Balance at end of period
    
    $
    567,954
    
    
    $
    503,145
    
    
    $
    646,484
 92




---



##### 



Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
  Changes in Internal Control over Financial Reporting.
  Managements Report on Internal Control over Financial Reporting.
    Item 9B. Other Information
  93




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##### 



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
  94




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##### 



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
    
    
    Amended and Restated Bylaws of FelCor
Lodging Trust Incorporated (filed as
Exhibit 4.2 to FelCors Form 10-Q for the
quarter ended March 31, 2007, 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).
 95




---



##### 



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 dated April 6, 2005, and filed
on 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 dated
April 6, 2005, and filed on 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 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).4.8.1
    
    
    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).4.8.2
    
    
    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 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).4.8.3
    
    
    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 (filed as Exhibit 4.9.3 to
FelCors Annual Report on Form 10-K, for
the fiscal year ended December 31, 2005
(the 2005 Form 10-K) and incorporated
herein by reference).4.8.4
    
    
    Fourth Supplemental Indenture, dated as of
December 31, 2006, by and among FelCor LP,
FelCor, the Subsidiary Guarantors named
therein, the New Subsidiary Guarantor
named therein and U.S. Bank National
Association, as successor to SunTrust
Bank, as trustee (filed as Exhibit 4.8.4
to FelCors Annual Report on Form 10-K,
for the fiscal year ended December 31,
2006 (the 2006 Form 10-K) and
incorporated herein by reference).4.8.5*
    
    
    Fifth Supplemental Indenture, dated as of
August 16, 2007, by and among FelCor LP as
issuer, FelCor and the other Guarantors
named therein, FelCor Holdings Trust as
pledgor and U.S. Bank National
Association, as successor to SunTrust
Bank, as trustee.4.9
    
    
    Indenture dated October 31, 2006 by and
among FelCor LP, FelCor, certain
subsidiary guarantors named therein,
FelCor Holdings Trust, as pledgor, and
U.S. Bank National Association, as trustee
(filed as Exhibit 4.1 to FelCors Form 8-K
dated October 26, 2006, and filed on
November 1, 2006, and incorporated herein
by reference).4.9.1
    
    
    First Supplemental Indenture, dated as of
December 31, 2006, by and among FelCor LP,
FelCor, the Subsidiary Guarantors named
therein, the New Subsidiary Guarantor
named therein and U.S. Bank National
Association, as trustee (filed as Exhibit
4.9.1 to the 2006 Form 10-K and
incorporated herein by reference).4.9.2*
    
    
    Second Supplemental Indenture, dated as of
August 16, 2007, by and among FelCor LP as
issuer, FelCor and the other Guarantors
named therein, FelCor Holdings Trust as
pledgor and U.S. Bank National
Association, as trustee.
 96




---



##### 



ExhibitNumber
    
    Description of Exhibit10.1
    
    
    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).10.1.8
    
    
    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).10.2.1
    
    
    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).10.2.2
    
    
    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
(filed as Exhibit 10.2.2 to the 2005 Form
10-K and incorporated herein by
reference).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).
 97




---



##### 



ExhibitNumber
    
    Description of Exhibit10.3.2
    
    
    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
October 19, 2007, between the Company and
Richard A. Smith (filed as Exhibit 10.1 to
FelCors Form 10-Q for the quarter ended
September 30, 2007, and incorporated
herein by reference).10.8
    
    
    Form of 2007 Change in Control and
Severance Agreement between the Company
and each of Rick Smith, Andy Welch, Mike
DeNicola, Troy Pentecost, Jon Yellen and
Tom Corcoran (filed as Exhibit 10.1 to
FelCors current report on Form 8-K dated
October 23, 2007, and filed on October 26,
2007, and incorporated herein by
reference).10.9
    
    
    Savings and Investment Plan of FelCor
(filed as Exhibit 10.10 to the 2001 Form
10-K and incorporated herein by
reference).10.10
    
    
    Non-Qualified Deferred Compensation Plan,
as amended and restated effective January
1, 2005 (filed as Exhibit 10.11 to the
2006 Form 10-K and incorporated herein by
reference).10.11
    
    
    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).10.12
    
    
    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).10.13
    
    
    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).10.14
    
    
    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).10.15
    
    
    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).10.16
    
    
    Form of Employee Stock Grant Contract
under Restricted Stock and Stock Option
Plans of FelCor applicable to grants in
2005 and thereafter (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).10.17
    
    
    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).
 98




---



##### 



ExhibitNumber
    
    Description of Exhibit10.18
    
    
    Summary of 2007 Performance Criteria for
Annual Incentive Bonus Award Program
(filed as Exhibit 99.1 to FelCors Form
8-K, dated February 27, 2007, and filed on
March 5, 2007 and incorporated herein by
reference).10.19.1
    
    
    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).10.19.2
    
    
    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).10.20.1
    
    
    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).10.20.2
    
    
    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).10.20.3
    
    
    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).10.21.1
    
    
    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).10.21.2
    
    
    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 FelCor/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).
 99




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##### 



ExhibitNumber
    
    Description of Exhibit10.22.1
    
    
    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., 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).10.22.2
    
    
    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., 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).10.22.3
    
    
    Form of seven 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.,
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), 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).10.22.4
    
    
    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).10.23.1
    
    
    Amended and Restated Credit Agreement,
dated as of August 16, 2007, by and among
FelCor Lodging Trust Incorporated, FelCor
Lodging Limited Partnership, the lenders
party thereto, JPMorgan Chase Bank, N.A.,
as administrative agent and Citicorp North
America, Inc. as syndication agent, with
J.P. Morgan Securities, Inc. and Citigroup
Global Markets Inc. as joint bookrunners
and joint lead arrangers (filed as Exhibit
10.1 to FelCors current report on Form
8-K, dated August 16, 2007, and filed on
August 21, 2007 (the August 21 Form
8-K), and incorporated herein by
reference).10.23.2
    
    
    Amended and Restated Subsidiary Guaranty,
dated as of August 16, 2007, 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., FelCor Canada Co., FelCor
Omaha Hotel Company, L.L.C., FelCor TRS
Holdings, L.L.C., Myrtle Beach Hotels,
L.L.C., FelCor TRS Borrower I, L.P.,
FelCor TRS Borrower 4, L.L.C. and
FelCor/St.Paul Holdings, L.P. in favor of
JPMorgan Chase Bank, N.A., as
administrative agent (filed as Exhibit
10.2 to the August 21 Form 8-K and
incorporated herein by reference).10.24.1
    
    
    Pledge Agreement dated October 31, 2006 by
FelCor Holdings Trust in favor of JPMorgan
Chase Bank, N.A., as Collateral Agent
(filed as Exhibit 10.1 to FelCors Form
8-K dated October 26, 2006, and filed on
November 1, 2006, and incorporated herein
by reference).
 100




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##### 



ExhibitNumber
    
    Description of Exhibit10.24.2
    
    
    Collateral Agency Agreement dated October
31, 2006 by and among FelCor, FelCor LP,
JPMorgan Chase Bank, N.A., as Collateral
Agent and/or Administrative Agent, FelCor
Holdings Trust and U.S. Bank National
Association, as trustee under several
indentures (filed as Exhibit 10.2 to
FelCors Form 8-K dated October 26, 2006,
and filed on November 1, 2006, and
incorporated herein by reference).10.24.3
    
    
    Reaffirmation of Pledge Agreement dated
August 16, 2007 by FelCor Holdings Trust
in favor of JPMorgan Chase Bank, N.A., as
collateral agent (filed as Exhibit 10.3 to
the August 21 Form 8-K and incorporated
herein by reference).10.24.4
    
    
    Reaffirmation of Collateral Agency
Agreement dated August 16, 2007 by and
among FelCor Lodging Trust Incorporated,
FelCor Lodging Limited Partnership,
JPMorgan Chase Bank, N.A., as collateral
agent and/or administrative agent, FelCor
Holdings Trust and U.S. Bank National
Association, as trustee under the
indentures (filed as Exhibit 10.4 to the
August 21 Form 8-K and incorporated herein
by reference).10.25
    
    
    Registration Rights Agreement dated
October 31, 2006 by and among FelCor,
FelCor LP, Merrill Lynch & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated
(filed as Exhibit 4.4 to FelCors Form 8-K
dated October 26, 2006, and filed on
November 1, 2006, and incorporated herein
by reference).10.26
    
    
    Form of Indemnification Agreement (filed
as Exhibit 10.1 to FelCors Form 8-K dated
November 9, 2006, and filed on November
13, 2006, and incorporated herein by
reference).10.27.1
    
    
    Loan Agreement, dated as of November 10,
2006, by and among FelCor/JPM Hotels,
L.L.C. and DJONT/JPM Leasing, L.L.C., as
borrowers, and Bank of America, N.A., as
lender, relating to a $250 million loan
from lender to borrower (filed as Exhibit
10.35.1 to the 2006 Form 10-K and
incorporated herein by reference).10.27.1.1
    
    
    First Amendment to Loan Agreement and
Other Loan Documents, dated as of January
31, 2007, by and among FelCor/JPM Hotels,
L.L.C. and DJONT/JPM Leasing, L.L.C., as
borrowers, and Bank of America, N.A., as
lender (filed as Exhibit 10.35.1.1 to the
2006 Form 10-K and incorporated herein by
reference).10.27.2
    
    
    Form of Mortgage, Deed of Trust and
Security Agreement, each dated as of
November 10, 2006, from FelCor/JPM Hotels,
L.L.C. and DJONT/JPM Leasing, L.L.C., as
borrowers, in favor of Bank of America,
N.A., as lender, each covering a separate
hotel and securing the Mortgage Loan
(filed as Exhibit 10.35.2 to the 2006 Form
10-K and incorporated herein by
reference).10.27.3
    
    
    Form of Amended and Restated Promissory
Note, each dated as of January 31, 2007,
made by FelCor/JPM Hotels, L.L.C. and
DJONT/JPM Leasing, L.L.C. payable to the
order of either Bank of America, N.A. or
JPMorgan Chase Bank, N.A., as lender, in
the original aggregate principal amount of
$250 million (filed as Exhibit 10.35.3 to
the 2006 Form 10-K and incorporated herein
by reference).10.27.4
    
    
    Guaranty of Recourse Obligations of
Borrower, dated as of November 10, 2006,
made by FelCor LP in favor of Bank of
America, N.A (filed as Exhibit 10.35.4 to
the 2006 Form 10-K and incorporated herein
by reference).10.28.1*
    
    

Assumption
Agreement dated December 14,
2007 by Greenwich Capital Financial
Products, Inc., WSRH Indian Wells, L.L.C.,
FelCor Esmeralda (SPE), L.L.C. and FelCor
Esmeralda Leasing (SPE), L.L.C.10.28.2*
    
    
    Amended and Restated Loan Agreement dated
December 14, 2007 between FelCor Esmeralda
(SPE), L.L.C. and FelCor Esmeralda Leasing
(SPE), L.L.C., as borrowers, and Greenwich
Financial Products, Inc., as lender.
 101




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##### 



ExhibitNumber
    
    Description of Exhibit10.28.3*
    
    
    Amended and Restated Promissory Note dated
December 14, 2007, in the amount of
$87,975,000, made by FelCor Esmeralda
(SPE), L.L.C. and FelCor Esmeralda Leasing
(SPE), L.L.C., as borrower, in favor of
Greenwich Capital Financial Products,
Inc., as lender.10.28.4*
    
    
    Amended and Restated Deed of Trust,
Security Agreement and Fixture Filing
dated December 14, 2007 by FelCor
Esmeralda (SPE), L.L.C. and FelCor
Esmeralda Leasing (SPE), L.L.C., as
trustors, to First American Title
Insurance Company, as trustee, and
Greenwich Capital Financial Products,
Inc., as lender.10.29.1*
    
    

Assumption
Agreement dated December 14,
2007 by Greenwich Capital Financial
Products, Inc., WSRH VSP, L.P., FelCor St.
Pete (SPE), L.L.C. and FelCor St. Pete
Leasing (SPE), L.L.C.10.29.2*
    
    
    Second Amended and Restated Loan Agreement
dated December 14, 2007 between FelCor St.
Pete (SPE), L.L.C. and FelCor St. Pete
Leasing (SPE), L.L.C., as borrowers, and
Greenwich Financial Products, Inc., as
lender.10.29.3*
    
    
    Second Amended and Restated Promissory
Note dated December 14, 2007, in the
amount of $89,250,000, made by FelCor St.
Pete (SPE), L.L.C. and FelCor St. Pete
Leasing (SPE), L.L.C., as borrower, in
favor of Greenwich Capital Financial
Products, Inc., as lender.10.29.4*
    
    
    Second Amended and Restated Leasehold
Mortgage, Security Agreement and Fixture
Filing dated December 14, 2007 by FelCor
St. Pete (SPE), L.L.C. and FelCor St. Pete
Leasing (SPE), L.L.C., as borrower, and
Greenwich Capital Financial Products,
Inc., as lender.21*
    
    
    List of Subsidiaries of FelCor.23*
    
    
    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).
 
 *
    
    Filed herewith 102




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##### 



SIGNATURES
  FELCOR LODGING TRUST INCORPORATEDBy:
    
    /s/ Jonathan H. Yellen

Jonathan H. Yellen

Executive Vice President
   Date
    
    SignatureFebruary 29, 2008
    
    /s/ Richard A. SmithRichard A. Smith
President and Director (Chief Executive Officer)February 29, 2008
    
    /s/ Andrew J. WelchAndrew J. Welch
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)February 29, 2008
    
    /s/ Lester C. JohnsonLester C. Johnson
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)February 29, 2008
    
    /s/ Thomas J. Corcoran, Jr.Thomas J. Corcoran, Jr.
Chairman of the Board and DirectorFebruary 29, 2008
    
    /s/ Melinda J. BushMelinda J. Bush, DirectorFebruary 29 , 2008
    
    /s/ Robert F. CotterRobert F. Cotter, DirectorFebruary 29, 2008
    
    /s/ Richard S. EllwoodRichard S. Ellwood, DirectorFebruary 29, 2008
    
    /s/ Thomas C. HendrickThomas C. Hendrick, DirectorFebruary 29, 2008
    
    /s/ David C. KloeppelDavid C. Kloeppel, DirectorFebruary 29, 2008
    
    /s/ Charles A. Ledsinger, Jr.Charles A. Ledsinger, Jr., DirectorFebruary 29, 2008
    
    /s/ Robert H. Lutz, Jr.Robert H. Lutz, Jr., DirectorFebruary 29, 2008
    
    /s/ Robert A. MathewsonRobert A. Mathewson, Director
 103