<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                   FORM 10-K


                      Annual Report Pursuant to Section 13
                     of the Securities Exchange Act of 1934
                      For the Year Ended December 31, 1997

                             BRISTOL HOTEL COMPANY
                               14295 Midway Road
                              Dallas, Texas 75244
                                  972-391-3910

                          Commission File No. 1-14062

   Incorporated in Delaware                         IRS No. 75-2584227

          Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                                       Name of each exchange
         Title of each class                            on which registered
         -------------------                           ---------------------
<S>                                                   <C>
Common Stock, Par Value $.01 per share                New York Stock Exchange
</TABLE>

                                   ----------

    The Company (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
required and will not be contained in a definitive proxy statement incorporated
by reference in Part III of this Form 10-K.

    The aggregate market value of the voting stock held by non-affiliates of
the Company at March 6, 1998 was $309,762,521.  Such computation excludes
12,267,783 shares held by the Company's two largest shareholders, directors and
executive officers.  At March 6, 1998, there were 43,800,401 shares of Common
Stock outstanding.

    Document Incorporated by Reference: Portions of the Proxy Statement for the
1998 annual meeting of stockholders are incorporated by reference into Part III
hereof to the extent stated herein.  Except with respect to information
specifically incorporated by reference herein, the Proxy Statement is not
deemed to be filed as a part hereof.

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                                    PART I.



FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are forward-looking statements within the
meaning of the Private Litigation Reform Act of 1995 and as such may involve
known and unknown risks, uncertainties, and other factors which may cause the
actual results, performance or achievements of Bristol Hotel Company (the
"Company" or "Bristol") to be different from any future results, performance or
achievements expressed or implied by such forward-looking statements.  These
statements include, among others, statements regarding the intent, belief or
expectations of the Company and its directors and officers with respect to (i)
the ownership, management, and operation of hotels, including the integration
of hotels acquired by the Company, (ii) potential acquisitions or dispositions
of hotel properties, (iii) the policies of the Company regarding investments,
acquisitions, dispositions, financings and other matters, (iv) the lodging
industry and real estate markets in general, (v) the availability of debt and
equity financing, (vi) general economic conditions, and (vii) trends affecting
the Company's financial condition and results of operations.  Although the
Company believes the intent, belief or expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained.  The Company undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.


ITEMS 1 & 2.     BUSINESS AND PROPERTIES


GENERAL

The Company is one of the largest owner/operators of hotels in North America,
currently operating 101 hotels containing approximately 28,800 rooms, including
86 owned hotels.  The Company's properties are predominantly full-service
hotels that operate in the upscale and mid-priced with food and beverage
segments of the lodging industry under franchise agreements primarily with
Holiday Hospitality Corporation (formerly Holiday Inn Worldwide).  The Company
is the largest Holiday Inn franchisee in the world and also operates hotels
under franchise agreements with other national hotel chains, including Marriott
International, Inc. and Hampton Inn (a division of Promus Hotels, Inc.).  The
Company's hotels are located in 22 states, the District of Columbia and Canada,
with hotels clustered in major metropolitan areas with concentrations in the
South, East, Southwest and Pacific regions of the United States.

On March 24, 1998, the Company announced a proposed merger with FelCor Suite
Hotels, Inc. (See Merger.)

The Company was formed pursuant to the combination (the "Combination") of
Harvey Hotel Company, Ltd. and its affiliated businesses ("Harvey Hotel
Companies" or "Predecessor") and United Inns, Inc. ("United Inns"), which was
completed on January 31, 1995.  The Company was incorporated in Delaware in
November 1994 and completed its initial public offering (the "IPO") of
4,887,500 shares of its common stock ("Common Stock") in December 1995.
Concurrent with the IPO, the Company obtained a $120 million credit facility
(the "1995 Senior Credit Facility") and $70 million aggregate principal amount
of Senior Notes Due 2000 (the "Senior Notes").  The Company used proceeds from
the IPO, the 1995 Senior Credit Facility and the Senior Notes to refinance
certain of the Company's then-existing indebtedness and for general corporate
purposes.

The completion of the Combination resulted in the Company owning 34 hotels,
eight from Harvey Hotel Companies and 26 from United Inns (the "United Hotels").
In 1995, the Company purchased two additional hotels and by the end of 1996 the
Company had acquired one additional hotel and had substantially completed a
comprehensive redevelopment program that included extensive exterior and
interior reconstruction and renovations to 20 of the United Hotels, as well as
the strategic repositioning of the redeveloped hotels within





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<PAGE>   3
their local markets.  Collectively, the 37 hotels owned by the Company at
Plano January 1, 1996, which excludes the Holiday Inn Plano, are referred to as
the "Original Bristol Portfolio."  In 1997, the Company added 63 hotels to its
owned/operated portfolio when it completed the acquisition of 60 hotels from
Holiday Corporation (the "Holiday Inn Acquisition") and three additional hotels
comprising the 1997 Single Asset Purchases, as defined below.  (See
Acquisitions.)

The Company also completed several debt and equity transactions during 1997,
including the repayment of the 1995 Senior Credit Facility with proceeds
received from the $560 million credit facility entered into in connection with
the Holiday Inn Acquisition (the "New Credit Facility").  The New Credit
Facility was subsequently repaid, first with $108 million in net proceeds
received in May 1997 when the Company completed the issuance of 3,162,500
(pre-Stock Split) shares of its Common Stock (the "Offering") and then the
remaining $452 million was repaid with proceeds from the $600 million credit
facility obtained by the Company in October 1997 (the "Refinancing").  In
December 1997, the Company repaid $40 million of its $70 million Senior Notes.
In July 1997, the Company effected a three-for-two stock split in the form of a
stock dividend (the "Stock Split").  All per share data and the average common
and common equivalent shares outstanding have been adjusted to reflect the
Stock Split for all periods presented.

The Company's principal executive offices are located at 14295 Midway Road,
Dallas, Texas 75244, and its telephone number is (972) 391-3910.


ACQUISITIONS

On April 28, 1997, the Company acquired 45 full-service Holiday Inns and the
management of an additional 15 Holiday Inn properties, of which three are owned
by joint ventures in which the Company acquired a 50% interest (the owned,
managed and joint venture properties, collectively referred to as the "Holiday
Inn Assets") through the merger of Holiday Inns, Inc. with and into the
Company.  As consideration for the Holiday Inn Acquisition, the Company paid
$398 million in cash and issued 9,381,308 shares (pre-Stock Split) of its
Common Stock.  The acquisition has been accounted for as a purchase and the
results of operations of the Holiday Inn Assets have been included in the
consolidated financial statements since April 28, 1997.  The purchase price was
allocated to the assets acquired based upon their estimated fair market values.
The excess of the purchase price over the estimated fair market value of the
net assets acquired was recorded as goodwill.

During 1997, in addition to the Holiday Inn Assets, the Company acquired three
hotels through single asset purchases.  In January 1997, the Company acquired
the 378 room Allerton Hotel in  Chicago, Illinois for $35.0 million; in October
1997, the Company acquired the 318 room Holiday Inn - Westport in St. Louis,
Missouri for $18.0 million; and in December 1997, the Company acquired the 364
room Holiday Inn - Independence Mall in Philadelphia, Pennsylvania for $25.5
million.  Collectively, these hotels are referred to as the "1997 Single Asset
Purchases."

In December 1997, the Company acquired the remaining 50% partnership interest
in the joint venture which owns the 305 room Holiday Inn - San Jose North ("HI
- San Jose") in San Jose, California, resulting in full ownership of the hotel.
The Company had acquired its original 50% partnership interest in connection
with the Holiday Inn Acquisition.

On February 2, 1998, the Company announced a definitive agreement to acquire 20
Midwestern hotels with a total of 3,456 rooms (the "Omaha Acquisition").  Under
the transaction, the Company will acquire by merger Omaha Hotel, Inc. and will
purchase an individual hotel.  The total consideration for the Omaha
Acquisition  is as follows:  $19.1 million in cash, $40.9 million in assumed
debt and 1.43 million shares of newly issued Common Stock.  Consummation of the
Omaha Acquisition is subject to certain conditions, and there can be no
assurance that the Omaha Acquisition will be consummated if any such conditions
are not satisfied.

The hotels in the Omaha Acquisition consist of nine full-service Holiday Inns,
five Holiday Inn Express hotels,





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<PAGE>   4
five Hampton Inns and one Homewood Suites, with locations in Omaha, Nebraska;
Moline, Illinois; Davenport, Iowa; central Kansas and Midland/Odessa, Texas.
Seven of the nine full-service hotels have undergone major property improvement
plans over the past 24 months.  Of the five Holiday Inn Express hotels, one is
a new construction project set to open for business in mid-1998 and two others
are newly built hotels that opened in the past two years.

MERGER

On March 24, 1998, the Company announced a proposed merger with FelCor Suite
Hotels, Inc. ("FelCor"), which was unanimously approved by the boards of both
companies subject to final documentation.  FelCor will acquire the Company's
real estate holdings and associated debt in return for 31.7 million shares of
newly issued FelCor stock.  Prior to the merger, the Company will spin off, as a
taxable dividend, all of its non-real estate holdings into a newly formed public
company to be known as Bristol Hotels & Resorts, Inc. ("New Bristol").  New
Bristol will become one of FelCor's two major tenants, with long-term leases on
all of the Bristol hotels included in the merger.  New Bristol will continue to
be Holiday Hospitality's largest franchisee.  The existing Hotel Properties
Agreement will be terminated and New Bristol will commit to add 8,700 Holiday
branded rooms over the next five years.  New Bristol will aggressively pursue
lease and management of larger, full-service hotels which can be redeveloped and
repositioned.

Bass PLC, which owned 32% of the Company's common stock at December 31, 1997,
will reduce its ownership in New Bristol to 9.9% in order to ensure compliance
with REIT requirements.

The proposed merger is subject to shareholder approval and other customary
conditions. FelCor and New Bristol will be completely independent public
companies with no overlap in management or boards of directors. Both companies
will maintain their existing headquarter facilities in Dallas and no layoffs
are expected at either company. FelCor will continue to operate as a REIT. New
Bristol will operate as a C-corporation and will apply for listing on the New
York Stock Exchange.

Subsequent to closing, FelCor will fund the Redevelopment and Rebranding
Program as defined below. This merger is expected to close by the end of June
1998.

REDEVELOPMENT AND REBRANDING PROGRAM

In November 1997, the Company initiated a comprehensive redevelopment and
rebranding program (the "Redevelopment and Rebranding Program") which entails
exterior and interior reconstruction of and renovations to a substantial number
of the Holiday Inn Assets (the "HI Renovations") and the three hotels
comprising the 1997 Single Asset Purchases as well as the rebranding of certain
hotels operated under the Company's own brand names.  The Redevelopment and
Rebranding Program is expected to be substantially complete by the end of 1999.

The HI Renovations include 41 of the Holiday Inn Assets.  In addition to the
renovations, the Company expects to rebrand 17 of the 41 hotels primarily to
the Crowne Plaza or Crowne Plaza Suites brand.  The renovation and rebranding
of the 1997 Single Asset Purchases is expected to be completed in 1999 and
include the rebranding of the Allerton Hotel and the Holiday Inn - Westport to
the Crowne Plaza brand.  The Company believes the conversions to the Crowne
Plaza brands will enable the hotels to more effectively compete in the markets
in which they operate.

The Redevelopment and Rebranding Program also includes the renovation and
rebranding of seven hotels in the Original Bristol Portfolio that are or have
been operated as a Harvey Hotel brand, a Bristol Suites brand or a Harvey
Suites brand.  Six of these hotels have been or will be converted to the Crowne
Plaza or Crowne Plaza Suites brand, and one hotel is being converted to a
Holiday Inn and Suites.  The conversion of these seven Original Bristol Hotels
is in accordance with franchise agreements entered into in connection with the
Holiday Inn Acquisition as more fully discussed below.  (See Franchise
Agreements and Trademarks.)

EMPLOYEES

As of December 1997, the Company employed approximately 13,000 persons,
including 370 employees at the Company's corporate headquarters. An estimated
86% of those employed were compensated on an hourly basis.

Approximately 1,400 employees at 13 of the Company's hotels are represented by
a labor union. Management believes that its ongoing labor relations are good.

PROPERTIES

The following table sets forth certain information with respect to each of the
Company's hotels as of December 31, 1997:

<TABLE>
<CAPTION>
                                                                                                       NO. OF
                          HOTEL                                               LOCATION                 ROOMS
    <S>                                                              <C>                                <C>
    OWNED:

    Holiday Inn - Montgomery  . . . . . . . . . . . . . . . . . .    Montgomery, AL   . . . . . .       213
    Holiday Inn - Texarkana I-30 (1)  . . . . . . . . . . . . . .    Texarkana, AR  . . . . . . .       210
    Days Inn - Flagstaff  . . . . . . . . . . . . . . . . . . . .    Flagstaff, AZ  . . . . . . .       157
    Fairfield Inn - Downtown Scottsdale (1)   . . . . . . . . . .    Scottsdale, AZ   . . . . . .       218
    Holiday Inn - Santa Barbara   . . . . . . . . . . . . . . . .    Santa Barbara, CA  . . . . .       160
    Holiday Inn Select - Irvine/Orange County Airport (3)   . . .    Irvine, CA   . . . . . . . .       334
</TABLE>

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<PAGE>   5
<TABLE>
    <S>                                                              <C>                                <C>
    Holiday Inn Select - Pleasanton (2)   . . . . . . . . . . . .    Pleasanton, CA   . . . . . .       244
    Holiday Inn - San Diego on the Bay (1) (3)    . . . . . . . .    San Diego, CA  . . . . . . .       600
    Holiday Inn - San Jose North  . . . . . . . . . . . . . . . .    San Jose, CA   . . . . . . .       305
    Holiday Inn - San Francisco Financial District (1) (3)    . .    San Francisco, CA  . . . . .       565
    Holiday Inn - San Francisco Fisherman's Wharf (1)   . . . . .    San Francisco, CA  . . . . .       584
    Holiday Inn Select - San Francisco Union Square (2)   . . . .    San Francisco, CA  . . . . .       400
    Holiday Inn Express - Colorado Springs Central  . . . . . . .    Colorado Springs, CO   . . .       207
    Ramada Inn - Colorado Springs North   . . . . . . . . . . . .    Colorado Springs, CO   . . .       220
    Holiday Inn - Hartford Downtown (2)   . . . . . . . . . . . .    Hartford, CT   . . . . . . .       342
    Holiday Inn Select - Stamford (1)   . . . . . . . . . . . . .    Stamford, CT   . . . . . . .       383
    Holiday Inn - Cocoa Beach Oceanfront Resort   . . . . . . . .    Cocoa Beach, FL  . . . . . .       500
    Holiday Inn - Nikki Bird (1)  . . . . . . . . . . . . . . . .    Kissimmee, FL  . . . . . . .       529
    Holiday Inn Select - Miami International Airport (1) (2)  . .    Miami, FL  . . . . . . . . .       304
    Holiday Inn Select - Orlando International Airport  . . . . .    Orlando, FL  . . . . . . . .       288
    Holiday Inn - Orlando International Drive Resort  . . . . . .    Orlando, FL  . . . . . . . .       652
    Holiday Inn - Orlando North/Winter Park   . . . . . . . . . .    Orlando, FL  . . . . . . . .       200
    Holiday Inn - Near Busch Gardens(R) Tampa   . . . . . . . . .    Tampa, FL  . . . . . . . . .       395
    Courtyard by Marriott - Downtown Atlanta  . . . . . . . . . .    Atlanta, GA  . . . . . . . .       211
    Fairfield Inn - Downtown Atlanta  . . . . . . . . . . . . . .    Atlanta, GA  . . . . . . . .       242
    Holiday Inn - Atlanta Airport North   . . . . . . . . . . . .    Atlanta, GA  . . . . . . . .       493
    Harvey Hotel - Atlanta Powers Ferry (2)   . . . . . . . . . .    Atlanta, GA  . . . . . . . .       296
    Crowne Plaza - Atlanta Airport  . . . . . . . . . . . . . . .    Atlanta, GA  . . . . . . . .       378
    Holiday Inn Select - Atlanta Perimeter Dunwoody   . . . . . .    Atlanta, GA  . . . . . . . .       250
    Holiday Inn Express - Atlanta I-20 East   . . . . . . . . . .    Atlanta, GA  . . . . . . . .       167
    Holiday Inn Express - Atlanta Northeast   . . . . . . . . . .    Atlanta, GA  . . . . . . . .       199
    Holiday Inn - Atlanta South/Jonesboro   . . . . . . . . . . .    Atlanta, GA  . . . . . . . .       180
    Holiday Inn - Columbus Airport North (1)  . . . . . . . . . .    Columbus, GA   . . . . . . .       223
    Hampton Inn - Marietta  . . . . . . . . . . . . . . . . . . .    Marietta, GA   . . . . . . .       140
    Allerton Hotel - Chicago (3)  . . . . . . . . . . . . . . . .    Chicago, IL  . . . . . . . .       378
    Holiday Inn - New Orleans French Quarter (1)  . . . . . . . .    New Orleans, LA  . . . . . .       276
    Holiday Inn Select - Boston Government Center (1)(3)  . . . .    Boston, MA   . . . . . . . .       303
    Holiday Inn - Kansas City Northeast   . . . . . . . . . . . .    Kansas City, MO  . . . . . .       167
    Holiday Inn - Westport  . . . . . . . . . . . . . . . . . . .    St. Louis, MO  . . . . . . .       318
    Holiday Inn - Jackson Southwest   . . . . . . . . . . . . . .    Jackson, MS  . . . . . . . .       289
    Crowne Plaza - Downtown Jackson   . . . . . . . . . . . . . .    Jackson, MS  . . . . . . . .       354
    Hampton Inn - Jackson North   . . . . . . . . . . . . . . . .    Jackson, MS  . . . . . . . .       119
    Harvey Hotel & Suites - Jackson North   . . . . . . . . . . .    Jackson, MS  . . . . . . . .       224
    Whispering Woods Hotel and Conference Center  . . . . . . . .    Olive Branch, MS   . . . . .       181
    Holiday Inn - Albuquerque Mountainview  . . . . . . . . . . .    Albuquerque, NM  . . . . . .       360
    Holiday Inn Select - Philadelphia Center City (2)   . . . . .    Philadelphia, PA   . . . . .       445
    Holiday Inn - Independence Mall   . . . . . . . . . . . . . .    Philadelphia, PA   . . . . .       364
    The Mills House Hotel - Charleston Holiday Inn  . . . . . . .    Charleston, SC   . . . . . .       214
    Holiday Inn - Columbia Airport  . . . . . . . . . . . . . . .    Columbia, SC   . . . . . . .       148
    Holiday Inn Select - Greenville (Roper) (2)   . . . . . . . .    Greenville, SC   . . . . . .       208
    Holiday Inn - Spartanburg West  . . . . . . . . . . . . . . .    Spartanburg, SC  . . . . . .       224
    Holiday Inn - Chattanooga Southeast I-75  . . . . . . . . . .    Chattanooga, TN  . . . . . .       230
    Holiday Inn - Knoxville West (1)  . . . . . . . . . . . . . .    Knoxville, TN  . . . . . . .       242
    Holiday Inn Select - Nashville Opryland/Airport (1) (3)   . .    Nashville, TN  . . . . . . .       384
    Holiday Inn - Amarillo I-40 (1)   . . . . . . . . . . . . . .    Amarillo, TX   . . . . . . .       247
    Holiday Inn - Austin Town Lake  . . . . . . . . . . . . . . .    Austin, TX   . . . . . . . .       320
    Holiday Inn - Beaumont Midtown I-10   . . . . . . . . . . . .    Beaumont, TX   . . . . . . .       190
    Fairfield Inn - Dallas Regal Row  . . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       204
    Harvey Hotel - Dallas (1)   . . . . . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       313
    Harvey Hotel - Addison (2)  . . . . . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       429
</TABLE>





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<PAGE>   6
<TABLE>
    <S>                                                              <C>                                <C>
    Bristol Suites - Dallas (1) (2)   . . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       295
    Hampton - Downtown Dallas/West End  . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       311
    Harvey Hotel - Dallas Brookhollow (2)   . . . . . . . . . . .    Dallas, TX   . . . . . . . .       354
    Courtyard by Marriott - Houston Near The Galleria   . . . . .    Houston, TX  . . . . . . . .       209
    Fairfield Inn - Houston Near The Galleria   . . . . . . . . .    Houston, TX  . . . . . . . .       107
    Holiday Inn Select - Houston Near Greenway Plaza  . . . . . .    Houston, TX  . . . . . . . .       355
    Holiday Inn - Medical Center (2)  . . . . . . . . . . . . . .    Houston, TX  . . . . . . . .       297
    Fairfield Inn - Houston I-10 East   . . . . . . . . . . . . .    Houston, TX  . . . . . . . .       160
    Holiday Inn - Houston Intercontinental Airport  . . . . . . .    Houston, TX  . . . . . . . .       413
    Hampton Inn - Houston I-10 East   . . . . . . . . . . . . . .    Houston, TX  . . . . . . . .        90
    Holiday Inn Select - Houston I-10 West (3)  . . . . . . . . .    Houston, TX  . . . . . . . .       349
    Harvey Suites - Houston Medical Center (1)(4)   . . . . . . .    Houston, TX  . . . . . . . .       285
    Harvey Suites - DFW Airport   . . . . . . . . . . . . . . . .    Irving, TX     . . . . . . .       164
    Harvey Hotel - DFW Airport (1)  . . . . . . . . . . . . . . .    Irving, TX   . . . . . . . .       506
    Harvey Hotel - Plano  . . . . . . . . . . . . . . . . . . . .    Plano, TX  . . . . . . . . .       279
    Holiday Inn - Plano   . . . . . . . . . . . . . . . . . . . .    Plano, TX  . . . . . . . . .       161
    Holiday Inn - San Antonio Downtown (1)  . . . . . . . . . . .    San Antonio, TX  . . . . . .       314
    Holiday Inn Select - San Antonio International Airport  . . .    San Antonio, TX  . . . . . .       397
    Holiday Inn - Waco I-35   . . . . . . . . . . . . . . . . . .    Waco, TX   . . . . . . . . .       171
    Holiday Inn - Salt Lake City Airport  . . . . . . . . . . . .    Salt Lake City, UT   . . . .       190
    Holiday Inn - Cambridge   . . . . . . . . . . . . . . . . . .    Cambridge, Ontario   . . . .       139
    Holiday Inn Select - Toronto Airport  . . . . . . . . . . . .    Toronto, Ontario   . . . . .       444
    Holiday Inn - Kitchener Waterloo  . . . . . . . . . . . . . .    Kitchener, Ontario   . . . .       182
    Holiday Inn - Peterborough - Waterfront   . . . . . . . . . .    Peterborough, Ontario  . . .       154
    Holiday Inn - Sarnia  . . . . . . . . . . . . . . . . . . . .    Sarnia, Ontario  . . . . . .       151
    Holiday Inn - Toronto Yorkdale  . . . . . . . . . . . . . . .    Toronto, Ontario   . . . . .       370

    MANAGED:

    Holiday Inn - Hollywood   . . . . . . . . . . . . . . . . . .    Hollywood, CA  . . . . . . .       470
    Holiday Inn - City Center   . . . . . . . . . . . . . . . . .    Los Angeles, CA  . . . . . .       195
    Holiday Inn - Woodland Hills  . . . . . . . . . . . . . . . .    Woodland Hills, CA   . . . .       124
    Holiday Inn - San Francisco Civic Center  . . . . . . . . . .    San Francisco, CA  . . . . .       393
    Holiday Inn - Torrance  . . . . . . . . . . . . . . . . . . .    Torrance, CA   . . . . . . .       329
    Holiday Inn - South Bend University Area  . . . . . . . . . .    South Bend, IN   . . . . . .       229
    Holiday Inn - Lexington North   . . . . . . . . . . . . . . .    Lexington, KY  . . . . . . .       303
    Holiday Inn - Cincinnati North  . . . . . . . . . . . . . . .    Cincinnati, OH   . . . . . .       407
    Holiday Inn Select - Pittsburgh University Center   . . . . .    Pittsburgh, PA   . . . . . .       251
    Holiday Inn - Memphis East  . . . . . . . . . . . . . . . . .    Memphis, TN  . . . . . . . .       243
    Holiday Inn - Nashville Vanderbilt  . . . . . . . . . . . . .    Nashville, TN  . . . . . . .       300
    Bristol House   . . . . . . . . . . . . . . . . . . . . . . .    Dallas, TX   . . . . . . . .       127
    Holiday Inn - San Antonio Riverwalk   . . . . . . . . . . . .    San Antonio, TX  . . . . . .       313

    JOINT VENTURES:

    Holiday Inn - Washington D.C. Downtown  . . . . . . . . . . .    Washington, DC   . . . . . .       208
    Chateau LeMoyne - New Orleans Holiday Inn   . . . . . . . . .    New Orleans, LA  . . . . . .       171
</TABLE>

    NOTES:

      (1)  The Company leases the land for these hotels.

      (2)  These hotels will be converted to Crowne Plaza hotels during 1998.

      (3)  These hotels will be converted to Crowne Plaza hotels during 1999.

      (4)  This hotel will be converted to a Holiday Inn and Suites during 1998.





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<PAGE>   7
FRANCHISE AGREEMENTS AND TRADEMARKS

As of December 31, 1997, the Company had franchise agreements (collectively,
the "Franchise Agreements") with Holiday Inns Franchising, Inc., Hampton Inn (a
division of Promus Hotels, Inc.), Days Inn of America Franchising, Inc.,
Marriott International, Inc., and Ramada Franchise Systems, Inc.  Although the
terms of the Franchise Agreements differ, each requires the Company to pay a
monthly royalty fee based on gross revenues attributable to room rentals, plus
marketing and reservation contributions, which are also based on gross
revenues. The terms of the Franchise Agreements generally are between 10 and 20
years, with a substantial penalty for early termination by the Company.   The
Company anticipates no changes in the brands used for its hotels which would
require the payment of franchise termination fees.

Several of the franchise agreements with Holiday Inns Franchising, Inc. were
entered into in conjunction with the Holiday Inn Acquisition and the related
conversion of the majority of Bristol's own branded hotels to a Crowne Plaza or
other Holiday Inn brand.  The franchise fees payable under these conversion
agreements will be a phased-in percentage of 0% of room revenue in 1997, 1% in
1998, 3% in 1999 and 5% in 2000 and thereafter.  Seven of these hotels have
been or are expected to be converted by the end of 1998.  (See Redevelopment
and Rebranding Program.)

The Company obtained registration of the "Bristol" and "Bristol Suites"
trademarks on June 25, 1996, and July 2, 1996, respectively, with the United
States Patent and Trademark Office. The Company knows of approximately 15
lodging establishments located in the United States that use "Bristol" in their
trade names, but which have no existing or historical relationship with the
Company.  Some of these establishments are located in areas where the Company
has not previously used the Bristol name.  Accordingly, others may be able to
restrict the Company's use of the name in those markets.  The Company has not
registered or applied for any other trademarks in connection with any other
hotel brand names that the Company utilizes.


MANAGEMENT AGREEMENTS

The Company acquired 15 management agreements in the Holiday Inn Acquisition,
three of which were for joint ventures in which the Company purchased a 50%
interest.  The Company entered into one additional management agreement in the
fall of 1997 unrelated to the Holiday Inn Acquisition.  In December the Company
purchased the remaining 50% interest in one of the joint ventures resulting in
15 total management agreements.

In general, the management agreements have remaining terms that range from one
to 11 years (subject to extension or renewal), and are generally cancelable
under certain conditions.  The management agreements specify base fees, which
are generally based on percentages of gross revenues and, in certain cases,
also provide for incentive fees.  These management contracts may contain
provisions which allow the third party owner to terminate the contract for such
reasons as sale of the property, for cause or without cause.  Therefore, the
Company cannot guarantee that it will continue to manage these properties to
the contract expiration date.


COMPETITION

The Company competes primarily in the upscale and mid-priced with food and
beverage full-service segment of the lodging industry, as defined by Smith
Travel Research, a noted industry resource.  Hotel chains such as Marriott,
Hyatt and Embassy Suites are direct competitors of the Company; and in each
geographic market in which the Company's hotels are located, there are other
limited and full-service hotels that compete with the Company's hotels.  In
addition, the Company's food and beverage operations compete with local
free-standing restaurants and bars.  Some of the Company's competitors have
larger networks of locations and greater financial resources than the Company.
Competition in the United States lodging industry is generally based on
convenience of location, price, range of services and guest amenities offered,
plus the





                                       7
<PAGE>   8
quality of customer service and overall product.  Newer, recently constructed
hotels compete effectively against older hotels if the older hotels are not
refurbished on a regular basis.  While newer limited-service hotels do not
compete directly with the Company's larger full-service hotels, they do provide
alternatives for guests who do not need the amenities of a full-service hotel.


ITEM 3.  LEGAL PROCEEDINGS.

The Company is involved in various legal proceedings arising in the normal
course of business.  The Company believes that the ultimate outcome of such
proceedings will not have a material adverse effect on the results of
operations or financial condition of the Company; however, there can be no
assurance that this will be the case.


ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

During the fourth quarter of 1997, no matter was submitted to a vote of the
Company's security holders.


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
         RELATED SHAREHOLDER.

The Company's Common Stock is listed on the New York Stock Exchange ("NYSE")
under the symbol "BH."  The range of the high and low sales price of the
Company's Common Stock as reported on the NYSE Composite Tape for each of the
quarters during the years ended December 31, 1997 and 1996, as adjusted for the
Stock Split, is set forth below:

<TABLE>
<CAPTION>
                                       1997                1996
                                 -----------------   -----------------
                                  High       Low       High      Low
                                 -------   -------   -------   -------
<S>                              <C>       <C>       <C>       <C>
          First quarter ......   $29.667   $21.083   $19.083   $16.250
          Second quarter .....    28.917    24.083    21.667    18.250
          Third quarter ......    28.250    25.500    21.417    17.500
          Fourth quarter .....    29.750    23.937    21.167    16.667

</TABLE>

On March 6, 1998, the last reported sale price of the Common Stock on the NYSE
was $25.25.  On March 6, 1998, the Company had 66 stockholders of record.  The
Company believes the number of beneficial owners of its Common Stock to be
approximately 2,200.

The Company has not paid any cash dividends on its Common Stock and does not
anticipate that it will do so in the foreseeable future.  Instruments governing
certain of the Company's indebtedness prohibit the payment of dividends on the
Common Stock.





                                       8
<PAGE>   9
                                    PART II.


ITEM 6.  SELECTED FINANCIAL DATA.

The following table sets forth selected historical financial data for the
Company for the years ended December 31, 1997 and 1996, and the 11 months ended
December 31, 1995, and unaudited pro forma financial data for the years ended
December 31, 1997, 1996 and 1995, respectively.  The unaudited pro forma
financial data for the years ended December 31, 1997 and 1996 give effect to
the Holiday Inn Acquisition and the refinancing (the New Credit Facility) of
the indebtedness in connection with the Holiday Inn Acquisition (collectively
the "HI Pro Forma Transactions") as if these transactions had occurred on
January 1 of each period presented.  The unaudited pro forma financial data for
the Company for the year ended December 31, 1995, give effect to the
Combination, the 1995 Senior Credit Facility, the Senior Notes and the IPO as
if they had been consummated at the beginning of the period but do not give
effect to the Holiday Inn Acquisition.  The selected balance sheet data for the
Company is presented as of December 31, 1997, 1996 and 1995.

The pro forma financial information presented is not necessarily indicative of
what the actual financial position and results of operations of the Company
would have been as of and for the periods indicated, nor does it purport to
represent the Company's future financial position and results of operations.
The financial data set forth below are qualified in their entirety by, and
should be read in conjunction with, "Management's Discussion and Analysis of
Financial Information and Results of Operations" and the financial statements
and notes thereto included herein.





                                       9
<PAGE>   10
                             BRISTOL HOTEL COMPANY
          SELECTED HISTORICAL AND PRO FORMA (UNAUDITED) FINANCIAL DATA
                       (IN THOUSANDS, EXCEPT SHARE DATA)




<TABLE>
<CAPTION>
                                                      HISTORICAL
                                        ------------------------------------
                                                               ELEVEN MONTHS        PRO FORMA (UNAUDITED)
                                               YEAR ENDED          ENDED     -----------------------------------
                                              DECEMBER 31,      DECEMBER 31,       YEAR ENDED DECEMBER 31,
                                        ----------------------  ------------ -----------------------------------
                                          1997          1996        1995       1997        1996 (1)     1995 (2)
                                        ---------    ---------  ------------ ---------    ---------    ---------
<S>                                     <C>          <C>         <C>         <C>          <C>          <C>
OPERATING DATA:

REVENUE:
  Rooms .............................   $ 377,380    $ 149,794   $ 115,771   $ 469,885    $ 421,278    $ 127,670
  Food, beverage and other ..........     127,138       62,046      49,424     156,162      150,598       54,012
                                        ---------    ---------   ---------   ---------    ---------    ---------
         Total revenue ..............     504,518      211,840     165,195     626,047      571,876      181,682
                                        ---------    ---------   ---------   ---------    ---------    ---------

OPERATING COSTS AND EXPENSES:
  Departmental expenses:
     Rooms ..........................     105,063       37,706      32,692     131,124      119,654       36,240
     Food, beverage and other .......      79,092       35,810      31,376      99,363       95,779       34,312
  Undistributed operating expenses:
     Administration and general,
        marketing ...................      78,694       33,821      28,254      99,465       95,995       30,504
     Property operating costs .......      79,633       28,402      24,738     100,907       85,115       26,804
     Depreciation and amortization ..      39,690       18,377      13,505      49,665       49,017       14,387
     Corporate expense ..............      24,450       10,958       8,035      24,787       21,412        8,691
                                        ---------    ---------   ---------   ---------    ---------    ---------
         Operating income ...........      97,896       46,766      26,595     120,736      104,904       30,744
                                        ---------    ---------   ---------   ---------    ---------    ---------

  Other expenses:
     Interest expense (3)  ..........      44,591       18,616      18,374      55,694       54,248       16,133
     Other non-operating expenses ...          --           --         430          --           --           93
     Equity in income of joint
         ventures ...................      (1,916)          --          --      (2,440)      (1,483)          --
     Income taxes ...................      22,007       10,401       2,822      26,317       20,158        5,226
                                        ---------    ---------   ---------   ---------    ---------    ---------

Income before extraordinary item ....      33,214       17,749       4,969      41,165       31,981        9,292

Extraordinary loss on early
    extinguishment of debt, net
    of income taxes .................      12,741           --       1,908      11,403           --           --
                                        ---------    ---------   ---------   ---------    ---------    ---------

Net income ..........................   $  20,473    $  17,749   $   3,061   $  29,762    $  31,981    $   9,292
                                        =========    =========   =========   =========    =========    =========

Diluted earnings per common and
  common equivalent share:
  Income before extraordinary item ..   $    0.87    $    0.70   $    0.28   $    1.03    $    0.81    $    0.37
  Net income ........................   $    0.53    $    0.70   $    0.17   $    0.75    $    0.81    $    0.37

Weighted average number of
   common and common
   equivalent shares outstanding
   - diluted (in thousands) .........      38,332       25,526      17,909      39,865       39,568       24,892

</TABLE>





                                       10
<PAGE>   11
                             BRISTOL HOTEL COMPANY
    SELECTED HISTORICAL AND PRO FORMA (UNAUDITED) FINANCIAL DATA (CONTINUED)
                       (IN THOUSANDS, EXCEPT SHARE DATA)




<TABLE>
<CAPTION>
                                                                           HISTORICAL
                                                               ------------------------------------
                                                                           DECEMBER 31,
                                                               ------------------------------------
                                                                  1997         1996         1995
                                                               ----------   ----------   ----------
<S>                                                            <C>          <C>          <C>
BALANCE SHEET DATA:

  Cash and cash equivalents ................................   $   86,167   $    4,666   $    7,906
  Property and equipment - net .............................    1,439,167      552,564      470,705
  Total assets .............................................    1,666,638      592,788      512,901
  Long-term debt including
     current portion .......................................      717,319      232,694      170,544
  Stockholders' equity .....................................      648,794      252,157      236,122
</TABLE>



     NOTES TO SELECTED HISTORICAL AND PRO FORMA (UNAUDITED) FINANCIAL DATA


(1)      Pro forma operating results for 1996 include the operations of the
         Holiday Inn - Stamford, which was purchased by Holiday Inn in July
         1996.

(2)      Pro forma operating results for 1995 include the operations of the
         Sheraton - Atlanta, a 368 room hotel purchased by the Company in June
         1995 and exclude the operations of the Holiday Inn-West Loop, which
         was sold by the Company in July 1995.

(3)      Pro forma interest expense for 1997 and 1996 reflects an increase in
         interest primarily as a result of additional debt incurred in
         connection with the Holiday Inn Acquisition.  Pro forma interest
         expense for 1995 has been reduced from actual interest expense by $3.2
         million related primarily to the reduction of debt with proceeds from
         the IPO.





                                       11
<PAGE>   12
The following tables set forth selected historical combined financial data for
Harvey Hotel Companies as of and for the two years ended December 31, 1994 and
1993, and for the month ended January 31, 1995, which have been derived from
financial statements audited by Price Waterhouse LLP, independent accountants,
each of which financial statements is included or incorporated by reference
herein.  The selected financial data set forth below are qualified in their
entirety by, and should be read in conjunction with, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
financial statements and notes thereto included elsewhere herein.

                      HARVEY HOTEL COMPANIES (PREDECESSOR)
                  SELECTED HISTORICAL COMBINED FINANCIAL DATA
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31,
                                     MONTH ENDED      -----------------------
                                  JANUARY 31, 1995      1994           1993
                                  ----------------    --------       --------
<S>                                   <C>             <C>            <C>
OPERATING DATA:
REVENUE:
  Rooms .........................     $  4,006        $ 44,972       $ 39,968
  Food, beverage and other ......        1,937          25,379         24,054
                                      --------        --------       --------
  Total revenue .................        5,943          70,351         64,022
                                      --------        --------       --------

OPERATING COSTS AND EXPENSES:
Departmental expenses:
  Rooms .........................        1,124          10,344          9,469
  Food, beverage and other ......        1,055          14,835         14,600
Undistributed operating expenses:
  Administrative and general,
     marketing ..................          579          11,369         10,285
  Property operating costs ......          629          10,563         10,086
  Depreciation ..................          309           4,041          3,963
  Corporate expense .............          315           3,761          2,827
                                      --------        --------       --------
      Operating income ..........        1,932          15,438         12,792
                                      --------        --------       --------
Other (income) expenses:
  Interest expense, net .........          652           7,631          7,737
  Other non-operating income ....           --            (337)          (241)
                                      --------        --------       --------

Income before extraordinary item      $  1,280        $  8,144       $  5,296
                                      ========        ========       ========
</TABLE>



<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                     -----------------------
                                                        1994         1993
                                                     ----------   ----------
<S>                                                  <C>          <C>
BALANCE SHEET DATA:
Cash and cash equivalents . . . . . . . . . . . . .  $    4,118   $      395
Property and equipment, net . . . . . . . . . . . .      80,635       72,387
Total assets  . . . . . . . . . . . . . . . . . . .     109,874       99,635
Long-term debt, including current portion . . . . .     114,054      112,963
Equity  . . . . . . . . . . . . . . . . . . . . . .     (11,988)     (20,604)
</TABLE>





                                       12
<PAGE>   13
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

OVERVIEW

Historical results for the year ended December 31, 1997, include the Original
Bristol Hotels and Holiday Inn - Plano, as well as the Holiday Inn Assets
(except for HI - San Jose) and the 1997 Single Asset Purchases from their
respective acquisition dates.  Historical results for the year ended December
31, 1997, also reflect the management and the 50% joint venture ownership of
the HI - San Jose from the Holiday Inn Acquisition date to November 1997 and
the full ownership of the hotel for the month of December 1997.  Historical
results for the year ended December 31, 1996, include the Original Bristol
Portfolio and Holiday Inn - Plano (as of May 31, 1996).  The 45 owned hotels
included in the Holiday Inn Assets are referred to below as the "Acquired
Hotels."


RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 1997, COMPARED WITH YEAR ENDED
DECEMBER 31, 1996

Actual Results

Total revenue increased 138.2% to $504.5 million for the year  ended December
31, 1997, as compared to 1996 as a result of the inclusion of the Holiday Inn
Assets and the 1997 Single Asset Purchases from their respective acquisition
dates and the improved operating performance of the Original Bristol Portfolio.
Revenue per available room ("RevPAR") for the Original Bristol Portfolio was
$47.53 for the year ended December 31, 1997, compared to $43.92 for 1996,
representing an 8.2% increase.  The improvement in RevPAR is primarily
attributable to the successful repositioning and/or redevelopment of several
hotels in the Original Bristol Portfolio.  Occupancy and average daily room
rate ("ADR") for the Original Bristol Portfolio was 70.0% and $67.91,
respectively, for the year ended December 31, 1997, compared to 64.4% and
$68.21, respectively, for 1996.  The change from 1996 to 1997 was also impacted
by nonrecurring items in 1996 including the Atlanta Olympics and the
renovations of the United Hotels.  The Atlanta Olympics had a positive impact
on results in 1996 due to the 100% occupancy experienced by the ten Atlanta
hotels in the Original Bristol Portfolio during the 20 days of the Olympic
games.  Results for 1996 were also impacted by the renovations of 13 United
Hotels throughout the year.

Rooms revenue as a percent of total revenue was 74.8% for the year ended
December 31, 1997, as compared to 70.7% for the year ended December 31, 1996,
resulting from the Acquired Hotels having proportionally lower food and
beverage business than the Original Bristol Portfolio.  This is also evidenced
by the 151.9% increase in rooms revenue for the year ended December 31, 1997,
compared to the same period in 1996 as compared to a 108.8% increase in food
and beverage revenue.

Food and beverage revenue increased primarily due to the increase in the number
of hotels and also due to higher food and beverage revenues for the Original
Bristol Portfolio.  Food and beverage revenue for the Original Bristol
Portfolio for the year ended December 31, 1997 was $51.6 million, representing
a 12% increase over 1996.  This increase is primarily attributable to the
effective redevelopment of several hotels in the Original Bristol Portfolio.

The increase in management fees relates primarily to the addition of the 15
management contracts acquired in the Holiday Inn Acquisition offset by the loss
of two management agreements previously held by Bristol in 1996.

Gross operating margin (consisting of total revenue less department expenses,
administrative and general, marketing and property operating costs divided by
total revenue) was 32.1% for the year ended December 31, 1997, compared to
35.9% for the year ended December 31, 1996.  The 3.8 percentage point decrease
in gross operating margin is primarily attributable to declines in departmental
operating margins and higher





                                       13
<PAGE>   14
property operating costs related to property taxes and land rentals.  Declines
in departmental margins relate primarily to the integration of the Acquired
Hotels, which have had historically lower margins.  Property tax increases
relate to increased valuations as a result of the significant capital
improvements for several hotels in the Original Bristol Portfolio as well as an
increase in tax rates for certain hotels.  Increased land rentals relate to the
Acquired Hotels having a proportionately higher number of ground leases than
the Original Bristol Portfolio.

Depreciation and amortization increased $21.3 million for the year ended
December 31, 1997, compared to 1996 as a result of the Holiday Inn Acquisition
and the 1997 Single Asset Purchases.  Depreciation expense also increased as a
result of the substantial capital improvements at several hotels in the
Original Bristol Portfolio.

Corporate expenses for the year ended December 31, 1997, were $24.5 million
compared to $11.0 million for 1996.  Approximately $3.1 million of the increase
relates to one-time costs incurred during the second quarter of 1997 for the
closing and integration of the Holiday Inn Acquisition.  The remaining increase
relates primarily to the increase in the number of corporate employees and
related costs and increased travel expenses as a result of the acquisition.

Interest expense for the year ended December 31, 1997, increased $26.0 million
to $44.6 million primarily as a result of additional debt incurred to finance
the Holiday Inn Acquisition as well as borrowings increasing ratably in 1996 to
fund acquisitions and certain redevelopment costs.

Equity in income of joint ventures of $1.9 million for the year ended December
31, 1997, represents the Company's 50% interest in the earnings of the three
joint ventures acquired in the Holiday Inn Acquisition.

As a result of the factors described above, income before extraordinary items
increased 87.1% to $33.2 million for the year ended December 31, 1997, compared
to the year ended 1996 and diluted earnings per share increased 24.3% to $.87
for the year ended December 31, 1997, compared to $.70 for 1996.  Recurring
earnings for the year ended December 31, 1997 of $35.1 million, which exclude
the extraordinary item of $12.7 million and the one-time costs related to the
Holiday Inn Acquisition ($1.8 million, net of tax), represents a 138.8%
increase over recurring earnings for the year ended December 31, 1996 of $14.7
million, which excludes a one-time gain related to the sale of marketable
securities ($.3 million, net of tax), the positive impact of the Atlanta
Olympics ($2.2 million, net of tax), and the litigation settlement gain ($.6
million, net of tax).  Recurring diluted earnings per share of $.92 for the
year ended December 31, 1997, represents a 58.6% improvement over 1996.

Pro Forma Results

Pro forma revenues increased $54.2 million, or 9.5%, to $626.0 million for the
year ended December 31, 1997, compared to 1996, reflecting increases in rooms
revenue and food and beverage revenue.  Revenue increases reflect the addition
of the 1997 Single Asset Purchases and improvements in RevPAR.  RevPAR for the
Original Bristol Portfolio was $47.53 for the year ended December 31, 1997,
compared to $43.92 for the year ended December 31, 1996.  This RevPAR increase
is primarily attributable to the successful repositioning and/or redevelopment
of several hotels in the Original Bristol Portfolio.  The Acquired Hotels
achieved a 7.5% improvement in RevPAR for the year ended December 31, 1997,
compared to 1996 primarily as a result of favorable results in the mid-priced
with food and beverage sector as well as the strength of the Holiday Inn brand
name and reservation system.  RevPAR, occupancy and ADR for the Acquired Hotels
for the year ended December 31, 1997, was $57.65, 73.2% and $78.74,
respectively, compared to $53.62, 73.5% and $72.95, respectively, for 1996.

Pro forma operating income margin remained relatively consistent on a
year-to-date basis.  Pro forma operating income margin for the year ended
December 31, 1997 was 19.3% compared to 18.3% for the 1996.

Pro forma interest expense increased by $1.4 million to $55.7 million for the
year ended December 31, 1997,





                                       14
<PAGE>   15
compared to 1996.  This increase was due primarily to borrowings increasing
ratably during 1996 to fund acquisitions and certain redevelopment costs.

Pro forma equity in income of joint ventures increased $1.0 million for the
year ended December 31, 1997, compared to 1996.  The increase is due to
improvements in the operating results for the three hotels owned by the joint
ventures.

As a result of the factors described above, pro forma income before
extraordinary items increased to $41.2 million for the year ended December 31,
1997, from $32.0 million for the year ended December 31, 1996, an increase of
28.7% and pro forma diluted earnings per share increased 27.2% to $1.03 for the
year ended December 31, 1997, compared to $.81 in 1996.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 1996, COMPARED WITH PRO FORMA
YEAR ENDED DECEMBER 31, 1995

Revenues increased from $181.7 million for the pro forma year ended December
31, 1995 to $211.8 million, an increase of $30.1 million, or 16.6%, for the
year ended December 31, 1996.  The increase is primarily attributable to the
addition of the Holiday Inn Plano in May 1996, the completion of the renovation
and redevelopment of the United Hotels and the application of the Company's
operating strategies to the United Hotels.  The hotels in the United Hotels
portfolio that had substantially completed renovations by the end of 1995 (the
"Phase I" hotels) posted gains in total hotel revenue in excess of 60%, with
only a 5.3% increase in available rooms from 1995 to 1996.  The positive impact
of applying the Company's operating strategies to the United Hotels is also
evidenced by the 17% increase in occupancy for the Phase I hotels and a 16.1%
increase in hotel revenue for those hotels.  (Although the Company took over
management of the United Hotels in February 1995, the operating strategy
integration was a several month process.)  The Atlanta Olympics also had a
positive impact on 1996 results as compared to 1995.  Increases in total hotel
revenues were partially offset by declines in total revenues for the United
Hotels undergoing renovations in 1996.  The increase in total revenues reflects
increases in all revenue categories, as discussed below.

Hotel room revenues were $149.8 million for the year ended December 31, 1996,
an increase of $22.1 million, or 17.3%, from the pro forma year ended December
31, 1995, due primarily to improved occupancy and average daily room rates of
67.4% and $68.24, respectively, for the year ended December 31, 1996, as
compared to 64.1% and $62.67, respectively, for the pro forma year ended
December 31, 1995.  Rooms department operating margins increased to 74.8% from
71.6%, benefiting from a higher number of occupied rooms and the availability
of rooms in 1996 which were undergoing renovation and unavailable during 1995.

Food and beverage revenues improved by $4.7 million to $44.3 million for the
year ended December 31, 1996, from $39.6 million for the pro forma year ended
December 31, 1995, due primarily to the higher occupancy levels in the
Company's hotels and increased focus on banquet and catering business for the
United Hotels. Food and beverage department margins increased to 29.5% from
24.8%, primarily as a result of applying the Company's operating strategies to
the United Hotels.

Other revenues increased 23.1%, or by $3.3 million, to $17.7 million for the
year ended December 31, 1996.  The Company sold marketable securities in the
third quarter of 1996, resulting in a gain of approximately $0.5  million.  In
addition, the Company recognized gains of $0.9 million and $0.5 million as a
result of the settlement of certain litigation and the early termination of a
management agreement, respectively.  Other revenues also increased as a result
of improved occupancy, and the increased emphasis on maximizing  telephone
revenue.

Gross operating income (consisting of total revenue less rooms, food, beverage
and other expense) was $138.3 million, a $27.2 million improvement for the year
ended December 31, 1996, as compared to the pro forma year ended December 31,
1995.  Gross operating margin for the year ended December 31, 1996, was 65.3%
as compared to 61.2% for the pro forma period ended December 31, 1995, an
improvement of 6.7% as a result of the factors noted above.




                                       15
<PAGE>   16
Operating income increased to $46.8 million for the year ended December 31,
1996, from $30.7 million for the pro forma year ended December 31, 1995. This
$16.1 million, or 52.4%, increase was due primarily to increased revenues and
the improvements in departmental performance noted above.  In addition,
administration and general and marketing expenses have stabilized.  Combined
administrative and general and marketing expenses increased 10.9% for  the year
ended December 31, 1996, compared to the pro forma year ended December 31,
1995, in contrast to a 14.2% increase from the pro forma year ended December
31,  1994, as compared to 1995.

Corporate expenses increased to $10.9 million for the year ended December 31,
1996, as compared to $8.7 million for the pro forma year ended December 31,
1995.  The increase of $2.2 million is primarily related to additional costs
incurred during 1996 to establish the Company as a public entity as well as
costs incurred in connection with the establishment of an acquisition
department.

Depreciation expense was $18.4 million for the year ended December 31, 1996, a
$3.9 million increase from the pro forma year ended December 31, 1995.  The
increase is a result of the renovation costs associated with certain United
Hotels being placed in service during 1996.

Interest expense increased by $2.5 million to $18.6 million for the year ended
December 31, 1996, compared to the pro forma year ended December 31, 1995.
This increase was due primarily to increased borrowings during 1996 for the
costs of the United Hotels renovations and the acquisition of the Holiday Inn
Plano in May 1996.

As a result of the factors described above, net income increased to $17.7
million for the year ended December 31, 1996, from $9.3 million for the pro
forma year ended December 31, 1995, an increase of 91.0%.

PERFORMANCE OF REDEVELOPED ASSETS

In February 1997, the Company completed the last phase of its renovation
program that had commenced in the spring of 1995.  The total cost of the
program was approximately $130 million and included 20 hotels with
approximately 5,400 rooms.  Excluding the Company's hotels in Jackson,
Mississippi, the return on redevelopment capital for the full-service assets
substantially complete as of December 1996 was approximately 20%.  (Return on
redevelopment capital is defined as the improvement in EBITDA, defined below,
for the twelve months immediately preceding each hotel's start of renovation
compared to the year ended December 31, 1997.)  The Company's limited-service
assets also substantially complete as of December 1996 achieved a return on
redevelopment capital of approximately 12%.  These considerable  returns are
primarily attributable to substantial improvements in RevPAR and food and
beverage revenue as well as enhanced operating margins.

With respect to the Company's portfolio in Jackson, Mississippi, the Company's
redeveloped assets have not yet reached similar returns. Market occupancies in
Jackson have averaged around 60%, limiting the Company's opportunities to
greatly improve average daily rates. As a result, the performance of the assets
to date have not yet met the Company's expectations, thereby lowering the
Company's overall return on redevelopment capital for all assets substantially
complete as of December 1996 to approximately 13%. However, the Company is
proactively defining alternative strategies including brand conversions in
order to enhance the performance of the Jackson portfolio. The Company remains
optimistic that adding stronger brand names to these hotels and revising the
operating cost structure will, over time, produce acceptable returns on the
redeveloped assets. Early results for the downtown Jackson hotel which
converted to the Crowne Plaza brand in late 1997 are extremely encouraging. A
brand conversion is likely for the other non-branded hotel in Jackson over
time.





                                       16
<PAGE>   17
LIQUIDITY AND CAPITAL RESOURCES

The Company's principal source of capital to fund its operational and capital
needs is cash flow from operations, which it typically measures in terms of
EBITDA (earnings before interest, taxes, depreciation and amortization). EBITDA
is considered to be principally available to pay income taxes, fund routine
capital maintenance and to pay debt service, both interest and principal.
Management believes that EBITDA is an effective measure of operating performance
because it is industry practice to evaluate hotel properties using multiples of
EBITDA.  EBITDA is unaffected by the debt and equity structure of the property
owner.  EBITDA does not represent cash flow from operations as defined by
generally accepted accounting principles ("GAAP"), and is not necessarily
indicative of cash available to fund all cash flow needs and should not be
considered an alternative to net income for purposes of evaluating the Company's
operating performance.  Management believes that cash flow from operations will
be sufficient to cover the Company's reasonably foreseeable working capital,
capital expenditure and debt service requirements. EBITDA totaled $139.5 million
for the year ended December 31, 1997, compared to $65.1 million for the year
ended December 31, 1996, an increase of 114.3%.  The Company filed a
registration statement relating to the issuance from time to time of up to $500
million of equity or debt securities, which was partially utilized with the
Offering, and expects from time to time to consider the possible issuance of
other debt or equity securities thereunder.

The Company's net cash provided by operations totaled $75.0 million for the
year ended December 31, 1997, compared to $40.6 million for 1996.  The
Company's cash and cash equivalent assets were $86.2 million and $4.7 million
at December 31, 1997 and 1996, respectively.  The $34.4 million increase in net
cash provided by operating activities from 1996 to 1997 relates primarily to
the increase in income before depreciation and amortization and an increase in
working capital offset by an increase in restricted cash.  The increase in
working capital relates primarily to the Holiday Inn Acquisition and the
resulting increases in accounts receivable offset by the increases in accounts
payable and accrued expenses.  The increase in restricted cash relates
primarily to reserves for real estate taxes and capital expenditures deposited
in accordance with the terms of the Refinancing.

The Company anticipates using cash on hand along with cash from operations to
fund the Redevelopment and Rebranding Program and planned capital projects
scheduled for completion up to the date of the proposed merger, at which time
FelCor will assume responsibility for funding capital expenditures.

The Redevelopment and Rebranding Program, which started in November 1997, is
expected to continue throughout 1998 and 1999 at a total cost of approximately
$331 million. This activity includes approximately $245 million for the HI
Renovations, $32 million to renovate and rebrand several of the hotels in the
Original Bristol Portfolio, and $54 million for the redevelopment and
rebranding of the 1997 Single Asset Purchases.  In addition to the amounts
funded in 1997, the Company anticipates spending $175 million in 1998,
approximately $100 million in 1999 and the remainder thereafter to fund this
redevelopment.  In addition to the Redevelopment and Rebranding Program, the
Company plans to spend approximately $18 million on capital projects during
1998.  As noted above, the Company plans to fund these costs with cash from
operations scheduled for completion up to the date of the proposed merger, at
which time FelCor will assume responsibility for funding capital expenditures.

YEAR 2000 ISSUE

The Company has reviewed its computer systems and has determined that the
majority of the systems are Year 2000 compliant.  There are, however, a few
computer systems including automated time clock systems, certain embedded
systems such as phone systems and certain other third-party reservation systems
that may require reprogramming.  The Company has initiated a comprehensive
program to identify, correct or reprogram, and test these systems and
anticipates that all reprogramming efforts will be substantially complete by
December 31, 1998, thereby allowing adequate time for testing.  Management will
assess the Year 2000 compliance expense and related potential effect on the
Company's earnings by June 1998, and does not anticipate that such expense or
effect will be material.





                                       17
<PAGE>   18
SEASONALITY

The lodging industry is affected by seasonal patterns. At most of the Company's
hotels, demand is higher in the second and third quarters than during the
remainder of the year.  The Company's results are also impacted during periods
of renovation when rooms are placed out of service.  The Company expects to
have approximately 376,000 and 280,000 rooms out of service in 1998 and 1999,
respectively, in conjunction with the Redevelopment and Rebranding Program.

INFLATION

The Company is impacted by inflation in both the general price movement of
certain costs of the operations of its hotels and in the ability to increase
the rates charged to its guests for rooms, food and beverage and other
services.

Many of the costs of operating the hotels can be fixed for certain periods of
time, reducing the short-term effects of changes in the rate of inflation.
Room rates, which are set on a daily basis, can be rapidly changed to meet
changes in inflation rates (as well as other changing market conditions).  The
Company believes that given the favorable demand/supply balance in the hotel
segments in which it operates, increases in inflation from today's relatively
low rates will not have an adverse impact on profits generated by the Company's
hotels.

Changes in the rate of inflation could impact the level of short-term interest
rates.  The Company does not anticipate a significant increase or decrease in
the level of short-term interest rates, and, since the Company has no floating
rate debt currently outstanding, the Company does not believe that it has any
significant exposure should a rise in market interest rates occur.





                                       18
<PAGE>   19
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following financial information is included on the pages indicated and is
incorporated into this item by reference:


<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
Reports of Independent Public Accountants . . . . . . . . . . . . . . . .   F-1

Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . .   F-3

Consolidated and Combined Statements of Income  . . . . . . . . . . . . .   F-4

Consolidated Statements of Changes in Stockholders' Equity  . . . . . . .   F-5

Consolidated and Combined Statements of Cash Flows  . . . . . . . . . . .   F-6

Notes to Consolidated and Combined Financial Statements . . . . . . . . .   F-8
</TABLE>





                                       19
<PAGE>   20
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On June 17, 1996, the Company appointed Arthur Andersen LLP as independent
accountants for fiscal 1996 to replace Price Waterhouse LLP effective with such
appointment.  The change in independent accountants was approved by the Audit
Committee of the Company's Board of Directors and the Company's stockholders.

Price Waterhouse LLP's report on the financial statements for the 11 months
ended December 31, 1995, did not contain an adverse opinion, disclaimer of
opinion, qualification, or modification as to uncertainty, audit scope, or
accounting principles.  Furthermore, during the 11 months ended December 31,
1995, and the interim period subsequent to December 31, 1995, there have not
been any disagreements with Price Waterhouse LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Price
Waterhouse LLP, would have caused that firm to make reference to the subject
matter of such disagreements in connection with its report.

                                   PART III.

The information called for by Items 10-13 is incorporated by reference to the
sections of the Company's Proxy Statement for its 1998 Annual Meeting of
Stockholders (to be filed pursuant to Regulation 14A not later than 120 days
after the close of the fiscal year).

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


                                    PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORT ON FORM 8-K.

  (a) LIST OF DOCUMENTS FILED AS PART OF THIS REPORT

      1.   The financial statements as set forth under Item 8 are filed as part
           of this report.

      2.   All financial statement schedules are omitted as they are either not
           applicable or the required information is included in the financial
           statements or the notes thereto.

      3.   The list of exhibits contained in the Index to Exhibits is
           incorporated herein by reference.

  (b) REPORTS ON FORM 8-K

           Current Report on Form 8-K dated November 14, 1997, containing the
           financial statements of Bristol Hotel Asset Company for the period
           ended September 30, 1997.





                                       20
<PAGE>   21
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
   of Bristol Hotel Company

We have audited the accompanying consolidated balance sheets of Bristol Hotel
Company (a Delaware corporation) as of December 31, 1997 and 1996, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bristol Hotel Company as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.




ARTHUR ANDERSEN LLP

Dallas, Texas
    February 6, 1998 (except with respect
    to the matter discussed in Note 20 as
    to which the date is March 25, 1998


                                      F-1
<PAGE>   22
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
   of Bristol Hotel Company

In our opinion, the accompanying consolidated statements of income, of changes
in stockholders'  equity and of cash flows for Bristol Hotel Company and its
subsidiaries ("Company") and the combined statements of income and cash flows
for Harvey Hotel Companies ("Predecessor") present fairly, in all material
respects, the results of operations and cash flows of the Company and its
Predecessor for the eleven months ended December 31, 1995 and for the one month
ended January 31, 1995, in conformity with generally accepted accounting
principles.  These financial statements are the responsibility of the Company
and its Predecessor's management; our responsibility is to express an opinion
on these financial statements based on our audits.  We conducted our audits of
these statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for the opinion expressed above.  We have not audited the
consolidated financial statements of Bristol Hotel Company and its subsidiaries
for any period subsequent to December 31, 1995.





PRICE WATERHOUSE LLP


Dallas, Texas
February 23, 1996





                                      F-2
<PAGE>   23
                             BRISTOL HOTEL COMPANY
                          CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                         December 31,  December 31,
                                                                            1997          1996
                                                                         ------------  ------------
<S>                                                                       <C>          <C>
                                       ASSETS

Current assets
   Cash and cash equivalents ..........................................   $   86,167   $    4,666
   Trading securities .................................................          103          116
   Accounts receivable (net of allowance of $2,259 and $344)  .........       31,305       10,501
   Inventory ..........................................................        8,286        3,320
   Deposits ...........................................................        7,569        5,404
   Other current assets ...............................................        1,626          950
                                                                          ----------   ----------
              Total current assets ....................................      135,056       24,957
                                                                          ----------   ----------

Property and equipment (net of accumulated depreciation
   of $76,172 and $31,071)  ...........................................    1,439,167      552,564

Other assets
   Restricted cash ....................................................        9,283        3,069
   Investments in joint ventures, net .................................       12,396           --
   Goodwill (net of accumulated amortization of $891) .................       52,773           --
   Deferred charges and other noncurrent assets (net of
       accumulated amortization of $1,965 and $2,144) .................       17,963       12,198
                                                                          ----------   ----------

              Total assets ............................................   $1,666,638   $  592,788
                                                                          ==========   ==========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Current portion of long-term debt ..................................   $    8,455   $   15,769
   Accounts payable and accrued expenses ..............................       27,366       10,626
   Accrued construction costs .........................................        1,330        4,797
   Accrued property, sales and use taxes ..............................       15,911        7,346
   Accrued insurance reserves .........................................        9,530        6,920
   Advance deposits ...................................................        1,156          278
                                                                          ----------   ----------
              Total current liabilities ...............................       63,748       45,736
                                                                          ----------   ----------

Long-term debt, excluding current portion .............................      708,864      216,925
Deferred income taxes .................................................      242,530       75,619
Other liabilities .....................................................        2,702        2,351
                                                                          ----------   ----------
              Total liabilities .......................................    1,017,844      340,631
                                                                          ----------   ----------

Common stock ($.01 par value; 150,000,000 shares
   authorized, 45,734,472 and 24,848,760 shares issued
   at December 31, 1997 and 1996, respectively, and
   43,641,401 and 24,848,760 shares outstanding at
   December 31, 1997 and 1996, respectively)  .........................          436          166
Additional paid-in capital ............................................      606,935      231,181
Cumulative translation adjustment .....................................          286           --
Retained earnings .....................................................       41,137       20,810
                                                                          ----------   ----------
              Total stockholders' equity ..............................      648,794      252,157
                                                                          ----------   ----------

              Total liabilities and stockholders' equity ..............   $1,666,638   $  592,788
                                                                          ==========   ==========
</TABLE>


   The accompanying notes are an integral part of these consolidated balance
                                    sheets.

                                      F-3
<PAGE>   24
                             BRISTOL HOTEL COMPANY
                       CONSOLIDATED STATEMENTS OF INCOME
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
                         COMBINED STATEMENTS OF INCOME
                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                                                  HARVEY HOTEL
                                                                      BRISTOL HOTEL COMPANY                        COMPANIES
                                                  ----------------------------------------------------------    -----------------
                                                                                                Eleven
                                                      Year Ended           Year Ended        Months Ended          Month Ended
                                                  December 31, 1997    December 31, 1996   December 31, 1995    January 31, 1995
                                                  -----------------    -----------------   -----------------    -----------------
<S>                                               <C>                  <C>                 <C>                  <C>
REVENUE:
  Rooms ......................................... $         377,380    $         149,794   $         115,771    $           4,006
  Food and beverage .............................            92,596               44,344              36,070                1,505
  Management fees ...............................             4,948                2,513               1,382                   34
  Other .........................................            29,594               15,189              11,972                  398
                                                  -----------------    -----------------   -----------------    -----------------
    Total revenue ...............................           504,518              211,840             165,195                5,943
                                                  -----------------    -----------------   -----------------    -----------------

OPERATING COSTS AND EXPENSES:
  Departmental expenses:
    Rooms .......................................           105,063               37,706              32,692                1,124
    Food and beverage ...........................            69,766               31,282              27,118                1,006
    Other .......................................             9,326                4,528               4,258                   49
  Undistributed operating expenses:
    Administrative and general ..................            44,255               18,266              16,184                  186
    Marketing ...................................            34,439               15,555              12,070                  393
    Property operating costs ....................            44,303               17,499              16,313                  360
    Property taxes, rent and insurance ..........            35,330               10,903               8,425                  269
    Depreciation and amortization ...............            39,690               18,377              13,505                  309
    Corporate expense ...........................            24,450               10,958               8,035                  315
                                                  -----------------    -----------------   -----------------    -----------------
Operating income ................................            97,896               46,766              26,595                1,932
                                                  -----------------    -----------------   -----------------    -----------------

Other (income) expense:
  Interest expense ..............................            44,591               18,616              18,374                  652
  Equity in income of joint ventures ............            (1,916)                  --                  --                   --
  Other .........................................                --                   --                 257                   --
                                                  -----------------    -----------------   -----------------    -----------------

Income before minority interest, income taxes,
   extra-ordinary items and pro forma income
   taxes ........................................            55,221               28,150               7,964                1,280
Minority interest ...............................                --                   --                 173                   --
                                                  -----------------    -----------------   -----------------    -----------------
Income before income taxes, extraordinary items
   and pro forma income taxes ...................            55,218               28,150               7,791                1,280
Income taxes ....................................            22,007               10,401               2,822                   --
                                                  -----------------    -----------------   -----------------    -----------------
Income before extraordinary items and pro forma
   income taxes .................................            33,214               17,749               4,969                1,280
Extraordinary loss on early extinguishment
   of debt, net of tax ..........................           (12,741)                  --              (1,908)                  --
                                                  -----------------    -----------------   -----------------    -----------------
Net income before pro forma income taxes ........ $          20,473    $          17,749   $           3,061                1,280
                                                  =================    =================   =================
Pro forma income taxes (Unaudited)...............                                                                             435
                                                                                                                -----------------
Net income after pro forma income tax expense
   (Unaudited)  .................................                                                               $             845
                                                                                                                =================

Earnings per common and common equivalent share:
  Income before extraordinary item:
    Basic ....................................... $            0.89    $            0.71   $            0.28                   --
    Diluted ..................................... $            0.87    $            0.70   $            0.28                   --
  Net income:
    Basic ....................................... $            0.55    $            0.71   $            0.17                   --
    Diluted ..................................... $            0.53    $            0.70   $            0.17                   --
Weighted average number of common and common
    equivalent shares outstanding:
  Basic .........................................        37,359,364           24,848,760          17,857,936                   --
  Diluted .......................................        38,332,302           25,526,413          17,908,955                   --
</TABLE>


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

                                      F-4
<PAGE>   25
                             BRISTOL HOTEL COMPANY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                             (Dollars in thousands)



<TABLE>
<CAPTION>


                                               COMMON STOCK       ADDITIONAL  UNREALIZED   CUMULATIVE   RETAINED
                                          ----------------------   PAID-IN    GAIN (LOSS)  TRANSLATION  EARNINGS
                                            SHARES      AMOUNT     CAPITAL   ON SECURITIES ADJUSTMENT   (DEFICIT)      TOTAL
                                          ----------  ----------  ---------- ------------- -----------  ----------   ----------
<S>                                       <C>         <C>         <C>          <C>          <C>         <C>          <C>
Balance at January 31, 1995 ............   9,856,178  $       99  $  123,104   $       --   $       --  $       --   $  123,203
  Unrealized gain on securities, net ...          --          --          --          262           --          --          262
  Issuance of common stock .............   6,709,662          67     109,529           --           --          --      109,596
  Net of income ........................          --          --          --           --           --       3,061        3,061
                                          ----------  ----------  ----------   ----------   ----------  ----------   ----------

Balance at December 31, 1995 ...........  16,565,840         166     232,633          262           --       3,061      236,122
  Reclass securities to trading ........          --          --          --         (262)          --          --         (262)
  Employee stock options ...............          --          --         216           --           --          --          216
  Adjustment to offering costs for
    1995 common stock issuance .........          --          --      (1,668)          --           --          --       (1,668)
  Net income ...........................          --          --          --           --           --      17,749       17,749
                                          ----------  ----------  ----------   ----------   ----------  ----------   ----------

Balance at December 31, 1996 ...........  16,565,840         166     231,181           --           --      20,810      252,157
  Employee stock options ...............          --          --         296           --           --          --          296
  Exercise of employee stock options ...       6,619          --         114           --           --          --          114
  Issuance of stock in Holiday Inn
  Acquisition ..........................   9,361,308          93     267,874           --           --          --      267,967
  Issuance of common stock, net of
    costs ..............................   3,162,500          31     107,470           --           --          --      107,501
  Stock split ..........................  14,545,134         146          --           --           --        (146)          --
  Foreign currency translation .........          --          --          --           --          286          --          286
  Net income ...........................          --          --          --           --           --      20,473       20,473
                                          ----------  ----------  ----------   ----------   ----------  ----------   ----------

Balance at December 31, 1997 ...........  43,641,401  $      436  $  606,935   $       --   $      286  $   41,137   $  648,794
                                          ==========  ==========  ==========   ==========   ==========  ==========   ==========
</TABLE>


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

                                      F-5
<PAGE>   26
                             BRISTOL HOTEL COMPANY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
                       COMBINED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                                                  HARVEY HOTEL
                                                                       BRISTOL HOTEL COMPANY                        COMPANIES
                                                    ---------------------------------------------------------   ------------------
                                                                                                 Eleven
                                                       Year Ended          Year Ended         Months Ended        Month Ended
                                                    December 31, 1997   December 31, 1996   December 31, 1995   January 31, 1995
                                                    -----------------   -----------------   -----------------   -----------------
<S>                                                 <C>                 <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .....................................  $          20,473   $          17,749   $           3,061   $           1,280
  Adjustments to reconcile net income to net
    cash provided by operating activities:
    Depreciation and amortization ................             39,690              18,377              13,505                 309
    Amortization of deferred financing fees ......              2,749               2,062                  --                  --
    Other ........................................                 --                  --                 602                  --
    Equity in earnings of joint ventures .........             (1,399)                 --                  --                  --
    Compensation expense recognized for
      employee stock options .....................                410                 216                  --                  --
    Unrealized gain on marketable securities .....                 --                (378)                 --                  --
    Non-cash portion of extraordinary item,
      net of tax .................................             11,009                  --               1,908                  --
  Changes in assets and liabilities:
    Changes in working capital ...................              1,645                (684)               (714)                641
    Decrease (increase) in restricted cash .......             (6,214)             (2,449)              2,860                 (84)
    Distributions from joint ventures ............                650                  --                  --                  --
    Increase (decrease) in other liabilities .....                217                (460)             (4,260)                421
    Deferred tax provision .......................              5,805               6,171                (326)                 --
                                                    -----------------   -----------------   -----------------   -----------------

       Net cash provided by operating
         activities ..............................             75,035              40,604              16,636               2,567
                                                    -----------------   -----------------   -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Improvements to property and equipment .........            (54,071)            (93,936)            (60,941)               (721)
  Purchases of property and equipment,
    net of associated debt .......................            (86,977)             (6,300)            (20,000)                 --
  Sales of property and equipment ................                 --                  --               4,711                  --
  Holiday Inn Acquisition, net of costs ..........           (400,159)                 --                  --                  --
  Sales of marketable securities .................                 --                 726                  --               1,928
                                                    -----------------   -----------------   -----------------   -----------------

       Net cash provided by (used in)
         investing activities ....................           (541,207)            (99,510)            (76,230)              1,207
                                                    -----------------   -----------------   -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from Refinancing ......................            600,000                  --                  --                  --
  Proceeds from New Credit Facility ..............            560,000                  --                  --                  --
  Repayment of New Credit Facility ...............           (560,000)                 --                  --                  --
  Paydown of Senior Notes ........................            (40,000)                 --                  --                  --
  Proceeds from Offering, net of costs ...........            107,852                  --                  --                  --
  Early extinguishment of long-term debt .........           (133,540)                 --                  --                  --
  Distributions to predecessor equity holders ....                 --                  --              (4,140)             (8,009)
  Additions to notes receivable - partners .......                 --                  --                  --                 488
  Principal payments and extinguishment of
    long-term debt ...............................             (7,058)             (4,826)           (156,612)               (121)
  Proceeds from issuance of long-term debt .......             43,410              66,976             123,387                  --
  Payment of offering costs ......................                 --              (1,342)                 --                  --
  Proceeds from affiliate ........................                 --                  --              19,900                  --
  Proceeds from initial public offering,
    net of offering costs ........................                 --                  --              88,557                  --
  Dividend paid to minority partner ..............                 --                  --                (335)                 --
  Decrease in accounts receivable affiliate ......                 --                  --                 542                  --
  Decrease (increase) in deferred charges
    and other non-current assets ..................           (22,991)             (5,142)             (9,212)                316
                                                    -----------------   -----------------   -----------------   -----------------

      Net cash provided by (used in)
         financing activities ....................            547,673              55,666              62,087              (7,326)
                                                    -----------------   -----------------   -----------------   -----------------
</TABLE>


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

                                      F-6
<PAGE>   27
                             BRISTOL HOTEL COMPANY
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
                 COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                                                  HARVEY HOTEL
                                                                       BRISTOL HOTEL COMPANY                       COMPANIES
                                                      -------------------------------------------------------  -----------------
                                                                                                 Eleven
                                                          Year Ended         Year Ended       Months Ended       Month Ended
                                                      December 31, 1997  December 31, 1996  December 31, 1995  January 31, 1995
                                                      -----------------  -----------------  -----------------  -----------------
<S>                                                   <C>                <C>                <C>                <C>
Net increase (decrease) in cash and
  cash equivalents .................................  $          81,501  $          (3,240) $           2,493  $          (3,552)

Cash and cash equivalents at beginning of period ...              4,666              7,906              5,413              4,118
                                                      -----------------  -----------------  -----------------  -----------------

Cash and cash equivalents at end of period .........  $          86,167  $           4,666  $           7,906  $             566
                                                      =================  =================  =================  =================

Supplemental cash flow information:
  Interest paid ....................................  $          39,706  $          17,696  $          17,111  $             330
                                                      =================  =================  =================  =================
  Income taxes paid ................................  $          10,942  $           3,543  $           2,685  $              --
                                                      =================  =================  =================  =================

Non-cash investing and financing activities:
  Debt assumed to acquire property
    and equipment ..................................  $          21,813  $              --  $          12,100  $              --
                                                      =================  =================  =================  =================
  Sale of non-hotel properties for assumption
    of liabilities .................................  $              --  $              --  $           4,723  $              --
                                                      =================  =================  =================  =================
  Purchase of minority interest for common stock ...  $              --  $              --  $           1,110  $              --
                                                      =================  =================  =================  =================

Common stock issued in Holiday Inn Acquisition .....  $         267,967  $              --  $              --  $              --
                                                      =================  =================  =================  =================
</TABLE>


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



                                      F-7
<PAGE>   28
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
            NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS


1.    ORGANIZATION

      Bristol Hotel Company (the "Company") is a Delaware corporation which was
      incorporated in November 1994 and began operations after the acquisitions
      of Harvey Hotel Company, Ltd. and its subsidiaries (together, "Harvey
      Hotel Companies" or "Predecessor") and United Inns, Inc. ("United Inns")
      (collectively, the "Combination").  The Company owns 86 hotels and
      manages 15 additional hotels, two of which are owned by joint ventures in
      which the Company owns a 50% interest.  The properties, which contain
      approximately 28,800 rooms, are located in 22 states, the District of
      Columbia and Canada.  The Company acquired the ownership and/or
      management of 60 of these properties on April 28, 1997 (the "Holiday Inn
      Acquisition").  The Combination and the Holiday Inn Acquisition are more
      fully described in Note 3.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES OF CONSOLIDATION

      The accompanying consolidated financial statements include the accounts
      of the Company and its subsidiaries.  The combined financial statements
      of the Predecessor include the accounts of Harvey Hotel Company and
      related entities, all of which were under common control.  The owners of
      these entities combined their interests for the purpose of forming a new
      entity which was acquired by the Company.  The accounts of United Inns
      and its subsidiaries are included from February 1, 1995, the date of
      acquisition.  The results of operations of the hotels acquired in the
      Holiday Inn Acquisition have been included in the Company's financial
      statements since April 28, 1997.  All significant intercompany accounts
      and transactions have been eliminated.

      CASH AND CASH EQUIVALENTS

      Cash and cash equivalents include unrestricted cash in banks and cash on
      hand.  Liquid investments purchased with an original maturity of three
      months or less are considered to be cash equivalents.

      TRADING SECURITIES

      Marketable securities consist primarily of equity securities and mutual
      fund shares.  Equity securities have been classified as either: (i)
      available-for-sale, which are reported at fair value, with net unrealized
      gains and losses excluded from earnings and reported as a separate
      component of changes in equity; or (ii) trading securities, which are
      reported at fair value, with unrealized holding gains and losses for
      trading securities included in earnings.  At December 31, 1997 and 1996,
      all marketable securities owned by the Company were classified as trading
      securities.

      ACCOUNTS RECEIVABLE

      Accounts receivable in the balance sheets are expected to be collected
      within one year and are net of estimated uncollectible amounts of
      $2,259,000 and $344,000, at December 31, 1997 and 1996, respectively.

      Valuation and qualifying accounts consist of allowance for doubtful
      accounts as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                Write-Off of
                                                         Balance at  Charged to   Amounts     Balance at
                                                         Beginning   Costs and   Previously     End of
                                                         of Period    Expenses    Reserved      Period
                                                         ----------  ---------- ------------  ----------
<S>                                                      <C>         <C>         <C>          <C>
      Company

         Year ended December 31, 1997 .................  $      344  $    2,306  $     (391)  $    2,259
         Year ended December 31, 1996 .................         620         251        (527)         344
         Eleven months ended December 31, 1995 ........         221         796        (397)         620
</TABLE>


                                      F-8
<PAGE>   29
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      INVENTORY

      Inventory, consisting primarily of food and beverage products as well as
      consumable supplies, is carried at the lower of cost or market.  Cost is
      determined on the first-in, first-out basis.

      DEFERRED CHARGES AND OTHER NONCURRENT ASSETS

      Deferred charges and other noncurrent assets consist primarily of
      financing costs which are amortized over the life of the related loan.
      The amounts reported in the balance sheets at December 31, 1997 and 1996,
      are net of accumulated amortization of $1,965,000 and $2,144,000,
      respectively.

      PROPERTY AND EQUIPMENT

      The Company recorded the Combination and the Holiday Inn Acquisition on
      the basis of an allocation of the purchase price based on the fair market
      value of the assets acquired at the date of acquisition.  Subsequent
      additions and improvements are capitalized at their cost, including
      interest costs associated with the renovation of certain hotels.
      Interest capitalized during the years ended December 31, 1997 and 1996
      was $1,628,000 and $2,100,000, respectively.

      The cost of normal repairs and maintenance that does not significantly
      extend the life of the property and equipment is expensed as incurred.
      Depreciation is computed on a straight-line method over the estimated
      useful lives of the assets, as follows:

<TABLE>
<CAPTION>
                                              BRISTOL HOTEL COMPANY        HARVEY HOTEL COMPANIES
                                              ---------------------        ----------------------
         <S>                                <C>                           <C>
         Buildings                                 35-40 years                  31-35 years
         Furniture, fixtures and equipment         3-15 years                     7 years
         Automobiles and trucks                      3 years                      3 years
         Leasehold improvements               Lease term or useful          Lease term or useful
                                            life, whichever is less       life, whichever is less
</TABLE>

      Depreciation and amortization expense recorded for the years ended
      December 31, 1997 and 1996, and  the eleven months ended December 31,
      1995 was $39.7 million, $18.4 million, and $13.5 million, respectively.

      The Company has adopted Statement of Financial Accounting Standards No.
      121, "Accounting for Impairment of Long- Lived Assets and for Long-Lived
      Assets to be Disposed of" ("SFAS 121").  As of December 31, 1997 and
      1996, no impairment losses have been incurred.  The assets, which were
      classified as available for sale as of December 31, 1996, were
      reclassified to held and used in the second quarter of 1997.

      RESTRICTED CASH

      Restricted cash consists of (i) funds placed in reserve for the
      replacement of furniture, fixtures and equipment, and (ii) tax and
      insurance reserves.  The Company is required to deposit monthly with
      various lenders amounts of three to four percent of hotel revenues for
      replacement reserves plus the tax and insurance escrow.  As tax and
      insurance payments are made and improvements are completed, the Company
      is reimbursed from the reserves.


                                      F-9
<PAGE>   30
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
       NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS

      In February 1997, Statement of Financial Accounting Standards No. 128,
      "Earnings Per Share" ("SFAS 128") was issued.  Under SFAS 128, basic
      earnings per share ("EPS") is computed by dividing net earnings by the
      weighted average number of shares of common stock outstanding during the
      period.  SFAS 128 replaces fully diluted EPS, which the Company was not
      previously required to report, with EPS, assuming dilution ("diluted
      EPS").  The Company calculates diluted EPS assuming all outstanding
      options to purchase common stock have been exercised at the beginning of
      the year (or the time of issuance, if later).  The dilutive effect of the
      outstanding options is reflected by application of the treasury stock
      method, whereby the proceeds from the exercised options are assumed to be
      used to purchase common stock at the average market price during the
      period.  The Company adopted SFAS 128 effective December 15, 1997.  All
      prior period EPS data have been restated.  The effect of this accounting
      change on previously reported EPS data is not significant.  The following
      table reconciles the computation of basic EPS to diluted EPS:

<TABLE>
<CAPTION>
                                                                                  PER SHARE
                                                        NET EARNINGS  SHARES       AMOUNT
                                                        ------------ ----------   ---------
                                                      ($ in thousands)
         <S>                                             <C>         <C>           <C>
         For the year ended December 31, 1997:
           Income before extraordinary item
              per share ...............................  $   33,214  37,359,364    $ 0.89

           Effect of options ..........................          --     972,938
                                                         ----------  ----------
           Income before extraordinary item per
              share, assuming dilution ................  $   33,214  38,332,302    $ 0.87
                                                         ==========  ==========

           Net income per share .......................  $   20,473  37,359,364    $ 0.55

           Effect of options ..........................          --     972,938
                                                         ----------  ----------
           Net income per share, assuming dilution ....  $   20,473  38,332,302    $ 0.53
                                                         ==========  ==========

         For the year ended December 31, 1996:
           Income before extraordinary item
              per share ...............................  $   17,749  24,848,760    $ 0.71

           Effect of options ..........................          --     677,653
                                                         ----------  ----------
           Income before extraordinary item per
              share, assuming dilution ................  $   17,749  25,526,413    $ 0.70
                                                         ==========  ==========

           Net income per share .......................  $   17,749  24,848,760    $ 0.71

           Effect of options ..........................          --     677,653
                                                         ----------  ----------
           Net income per share, assuming dilution ....  $   17,749  25,526,413    $ 0.70
                                                         ==========  ==========

         For the 11 months ended December 31, 1995:
           Income before extraordinary item
              per share ...............................  $    4,969  17,857,936    $ 0.28

           Effect of options ..........................          --      51,019
                                                         ----------  ----------
           Income before extraordinary item per
              share, assuming dilution ................  $    4,969  17,908,955    $ 0.28
                                                         ==========  ==========

           Net income per share .......................  $    3,061  17,857,936    $ 0.17

           Effect of options ..........................          --      51,019
                                                         ----------  ----------
           Net income per share, assuming dilution ....  $    3,061  17,908,955    $ 0.17
                                                         ==========  ==========
</TABLE>

Earnings per share have been retroactively adjusted for the effect of stock
splits.


                                      F-10
<PAGE>   31



                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      FOREIGN CURRENCY TRANSACTIONS

      As part of the Holiday Inn Acquisition, the Company acquired six hotels
      in Canada.  Results of operations for those hotels are maintained in
      Canadian dollars and translated using average exchange rates during the
      period.  Currency transaction losses are included in net income and were
      $303,000 for the year ended December 31, 1997.  Assets and liabilities
      are translated to U.S. dollars using the exchange rate in effect at the
      balance sheet date.  Resulting translation adjustments are reflected in
      stockholders' equity as a cumulative foreign currency translation
      adjustment.  Cumulative currency translation gains included in
      stockholders' equity at December 31, 1997 were $286,000.

      INCOME TAXES

      Company

           The Company accounts for income taxes under the Statement of
           Financial Accounting Standards No. 109, "Accounting for Income
           Taxes" ("SFAS 109").  SFAS 109 requires the recognition of deferred
           tax liabilities and assets for the expected future tax consequences
           of events that have been included in the financial statements or tax
           returns.  Under this method, deferred tax liabilities and assets are
           determined based on the difference between the financial statement
           and tax basis of assets and liabilities using currently enacted tax
           rates in effect for the years in which the differences are expected
           to reverse.

      Predecessor

           Harvey Hotel Company and related entities are partnership or
           S-Corporation entities, and income or loss for federal income tax
           purposes is allocated to the individual partners or shareholders.
           Accordingly, no recognition has been given to income taxes in the
           combined financial statements.  However, pro forma income tax
           expense, at an effective rate of 34%, has been included in the
           combined statements of income in order to reflect the impact on the
           income of Harvey Hotel Companies.

           Harvey Hotel Corporation accounted for the tax effect of net income
           or loss in accordance with SFAS 109.  However, because of the
           changes in ownership (see Note 1), realization of the benefit of the
           accumulated losses is uncertain and, therefore, has not been
           recorded in the combined financial statements.

      EARNINGS PER SHARE

      Earnings per share is determined by dividing net income by the weighted
      average number of common and common equivalent shares outstanding during
      the year.  The 1995 weighted average shares outstanding has been
      calculated using the treasury stock method and as if Holdings' shares of
      1,768,000 (see Note 3) had been outstanding since February 1, 1995.  The
      1997 and 1996 weighted average shares is calculated using the treasury
      stock method, giving effect to the common equivalent shares outstanding
      as of December 31, 1997 and 1996.  The common equivalent shares include
      officer and director stock options which have been deemed exercised at
      the issue date using the treasury method for the purposes of computing
      earnings per share.  The Company has no other potentially dilutive
      securities.

      All weighted average share and per share data presented are calculated in
      accordance with SFAS 128, which calls for both basic and diluted weighted
      average share presentation.  All prior period amounts have been restated
      in accordance with SFAS 128.  The Company believes that there has been no
      impact on its financial statements from the implementation of SFAS 128,
      as the weighted average shares previously used in calculating earnings
      per share are the same as the diluted weighted average shares calculated
      under SFAS 128.


                                      F-11
<PAGE>   32
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      EARNINGS PER SHARE (continued)

      On June 23, 1997, the Company's Board of Directors declared a
      three-for-two stock split, effective in the form of a stock dividend for
      shareholders of record June 30, 1997, which was distributed July 15, 1997
      (the "Stock Split").  All per share data and the average common and
      common equivalent shares issued and outstanding have been adjusted to
      reflect the Stock Split for all periods presented.

      USE OF ESTIMATES

      The Company has made a number of estimates and assumptions relating to
      the reporting of assets and liabilities, the disclosure of contingent
      assets and liabilities and the reported amounts of revenues and expenses
      to prepare these financial statements in conformity with generally
      accepted accounting principles.  Actual results could differ from those
      estimates.

      RECLASSIFICATIONS

      Certain financial statement items from the prior years for the Company
      and the Predecessor have been reclassified to conform with the current
      presentation.

3.    ACQUISITIONS

      UNITED INNS ACQUISITION

      On January 27, 1995, United/Harvey Holdings L.P. ("Holdings") acquired
      the common stock of United Inns for an aggregate purchase price of $67
      million plus the assumption of United Inns' liabilities.  The acquisition
      was accounted for as a purchase and the purchase price was allocated to
      the net assets acquired.  Under the acquisition agreement, Holdings,
      Harvey Hotel Companies, H. K. Huie, Jr., the Harvey Management Equity
      Holders and the other parties thereto, the following occurred:  (1)
      Holdings contributed to the Company all of the outstanding capital stock
      of United Inns, approximately $15.1 million in cash and certain cash
      advances previously made for the benefit of Harvey Hotel Companies in
      exchange for an aggregate of 68.1% of the Company's Common Stock; (2) the
      Harvey Management Equity Holders collectively contributed to the Company
      46.4% of the outstanding partnership interests in Harvey Hotel Companies
      in exchange for an aggregate of 20.6% of the Company's Common Stock; and
      (3) Mr. Huie contributed 25.3% of his 50.6% outstanding partnership
      interest in Harvey Hotel Companies for 11.3% of the Company's Common
      Stock.  In addition, Mr. Huie and two of his daughters sold to the
      Company approximately 27.3% of the outstanding partnership interests in
      Harvey Hotel Companies for approximately $15.1 million in cash plus
      interest.

      As a result of these transactions, Holdings, Mr. Huie and the Harvey
      Management Equity Holders became the stockholders of the Company, the
      Company became the sole stockholder of United Inns, the Company became
      the indirect owner of 99% of the outstanding partnership interests in
      Harvey Hotel Companies, and in connection therewith, a wholly owned
      subsidiary of the Company became the managing general partner of Harvey
      Hotel Companies.  Subsequently, one of Mr. Huie's daughters, who did not
      participate in the Combination, sold her 1.0% limited partnership
      interest in Harvey Hotel Companies (See Note 15).

      The aggregate purchase price for Harvey Hotel Companies of $55 million in
      stock and cash including the interests contributed by the Harvey
      Management Equity Holders and Mr. Huie has been allocated, along with
      acquisition costs of $1 million, to the net assets acquired.  The net
      assets contributed were valued at their estimated fair value on the basis
      of an independent valuation performed by Holdings and as a result of the
      cash paid for the 27.3% owned by Mr. Huie and his two daughters.  The
      excess of the purchase price over the net assets acquired of $71.5
      million was principally allocated to land and buildings in accordance
      with the purchase method of accounting.


                                      F-12
<PAGE>   33
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


3.    ACQUISITIONS (CONTINUED)

      UNITED INNS ACQUISITION (continued)

      The consolidated statements of income for the Company includes the
      results of operations for United Inns from February 1, 1995.

      The following unaudited pro forma summary presents the combined results
      of Harvey Hotel Companies as if United Inns had been acquired at the
      beginning of 1995.  The pro forma results have been prepared for
      comparative purposes only and do not purport to be indicative of the
      results of operations that would actually have resulted had the
      acquisition been in effect on the date indicated (in thousands):

<TABLE>
<CAPTION>
                                                             (Unaudited)
                                                             Month Ended
                                                           January 31, 1995
                                                           ----------------
<S>                                                        <C>
          Total revenues .................................     $13,142
          Net income after extraordinary gain and
             pro forma income tax expense ................     $ 1,111
</TABLE>

      HOLIDAY INN ACQUISITION

      On April 28, 1997, the Company acquired the ownership of 45 full-service
      Holiday Inns and the management of an additional 15 Holiday Inn
      properties, three of which were owned by joint ventures in which the
      Company acquired a 50% interest (the owned hotels, management contracts
      and joint venture interests, collectively referred to as the "Holiday Inn
      Assets").  As consideration for the Holiday Inn Acquisition, the Company
      paid $398 million in cash and issued 9,381,308 shares (pre-Stock Split)
      of its common stock.  The acquisition has been accounted for as a
      purchase and the results of operations of the Holiday Inn Assets have
      been included in the consolidated financial statements since April 28,
      1997.  The purchase price, including liabilities assumed in the
      acquisition (principally deferred tax liabilities) was allocated to the
      assets acquired, based upon their fair market values.  The excess of the
      purchase price over the estimated fair market value of the net assets
      acquired was recorded as goodwill and is being amortized over 40 years.

      The following unaudited pro forma summary presents the results of the
      Company as if the Holiday Inn Acquisition and related refinancing
      pursuant to the New Credit Facility (see Note 6) had occurred at the
      beginning of 1996.  The pro forma results have been prepared for
      comparative purposes only and are not indicative of the results of
      operations that would have occurred had the Holiday Inn Acquisition
      occurred on the date indicated.

<TABLE>
<CAPTION>
                                                                (Unaudited)
                                                              1997      1996
                                                            --------  --------
                                                              (in thousands)
<S>                                                         <C>       <C>
          Total revenues .................................  $626,047  $571,876
          Income before extraordinary item ...............  $ 41,165  $ 31,981
          Net income .....................................  $ 29,762  $ 31,981
</TABLE>


                                      F-13
<PAGE>   34
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


3.    ACQUISITIONS (CONTINUED)

      OTHER ACQUISITIONS

      In addition to the Holiday Inn Acquisition, the Company completed the
      following single-asset acquisitions in 1997 and 1996:
<TABLE>
<CAPTION>
                                                                                                    Mortgage
                 Date                                         Number          Purchase                Debt
               Acquired                Location              of Rooms          Price                 Assumed
               --------                --------              --------         --------              --------
             <S>                  <C>                        <C>           <C>                    <C>    <C>
             December 1997        Milpitas (San Jose), CA       305        $ 4.25 million(1)      $          --
             December 1997        Philadelphia, PA              364        $25.50 million         $13.4 million
             October 1997         St. Louis, MO                 318        $18.00 million         $ 8.4 million
             January 1997         Chicago, IL                   378        $35.00 million         $          --
             May 1996             Plano, TX                     161        $ 6.30 million         $          --
</TABLE>

      (1)    The Holiday Inn - Milpitas was previously owned by a joint venture
             in which the Company owned a 50% interest.  The Company purchased
             the remaining 50% interest in the venture for $4.25 million and,
             concurrently with the acquisition, repaid all outstanding debt
             associated with the property of $25.7 million.

4.    PROPERTY AND EQUIPMENT

      Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                         December 31, 1997  December 31, 1996
                                                         -----------------  -----------------
<S>                                                         <C>                <C>
             Land .......................................   $   169,611       $    50,528
             Buildings ..................................     1,152,383           406,682
             Furniture, fixtures and equipment ..........       162,045            74,827
                                                            -----------       -----------
                                                              1,484,039           532,037
                 Less accumulated depreciation ..........       (76,172)          (26,091)
                                                            -----------       -----------
                                                              1,407,867           505,946
             Assets held for sale (net of accumulated
                 depreciation of $0 and  $4,980)  .......            --            38,279
             Construction in progress ...................        31,300             8,339
                                                            -----------       -----------
                                                            $ 1,439,167       $   552,564
                                                            ===========       ===========
</TABLE>

      The Company's properties are predominantly full-service hotels that
      operate in the upscale and mid-price with food and beverage segments of
      the lodging industry under franchise agreements primarily with Holiday
      Inn.  The Company seeks to maintain a geographically diverse portfolio of
      hotels to offset the effects of regional economic cycles.  The Company
      operates properties in 22 states, the District of Columbia and Canada,
      including 13 hotels in California, 11 in Georgia, 27 in Texas, seven in
      Florida, and six in Canada.

      During fiscal year 1996, the Company classified certain limited-service
      hotels as assets held for sale pursuant to the provisions of SFAS 121.
      During 1997, the Company reclassified these assets as held and used,
      therefore recording depreciation expense on these assets.  The results of
      operations for these limited-service properties included in the income
      statement for the years ended December 31, 1997, 1996 and 1995 were (in
      thousands):

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                       ----------------------------
                                                         1997      1996      1995
                                                       --------  --------  --------
<S>                                                    <C>       <C>       <C>
             Total revenues .........................  $ 13,464  $ 16,398  $ 14,552
             Operating income .......................     2,186     5,580     4,020
</TABLE>


                                      F-14
<PAGE>   35
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


5.    MARKETABLE SECURITIES

      In 1995, the Company classified certain equity securities as
      Available-for-Sale Securities (per Statement of Financial Accounting
      Standard No. 115, "Accounting for Certain Investments in Debt and Equity
      Securities").  Unrealized gains were reported as a separate component of
      stockholders' equity.  In May 1996, management resolved to sell the
      equity securities, and accordingly, the securities were reclassified as
      Trading Securities and an unrealized gain of approximately $450,000 was
      recorded in earnings in 1996. These securities were sold in August 1996.

6.    LONG-TERM DEBT

      Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                                    December 31, 1997   December 31, 1996
                                                                    -----------------   -----------------
<S>                                                                 <C>                 <C>
       Senior Notes
           11.22% due December 18, 2000 (net of discount) ........  $          29,469   $          68,340
       Mortgage loans
           Fixed rate:
              7.66% due October 27, 2009 .........................            455,000                  --
              7.458% due November 11, 2007 .......................            144,834                  --
              8% due December 31, 2002 ...........................             40,263              42,126
              8.55% due January 11, 2016 .........................             14,324              14,626
              9% due October 1, 2005 .............................             13,401                  --
              9.5% due August 1, 2005 ............................              8,366                  --
              Non-interest bearing due December 31, 2002 .........              7,950               9,086
              7.25% due September 30, 1997 .......................                 --               8,110
           Variable rate:
              7.75% Senior Term Facility due December 18, 1998 ...                 --              66,976
              10.26% due January 31, 2000 ........................                 --               9,300
              10.25% due December 31, 1999 .......................                 --               6,899
              8.5% due September 30, 1997 ........................                 --               1,500
       Other long-term debt ......................................                345               4,329
       Capital leases ............................................              3,367               1,402
                                                                    -----------------   -----------------
                                                                              717,319             232,694
           Less current portion ..................................             (8,455)            (15,769)
                                                                    -----------------   -----------------
                     Long-term debt, excluding current portion ...  $         708,864   $         216,925
                                                                    =================   =================
</TABLE>

      The mortgages are amortized using varying methods as provided in the
      individual debt agreements. Substantially all of the Company's properties
      and equipment are pledged as collateral on mortgage obligations.

      The Company obtained the financing for the Holiday Inn Acquisition under
      a new senior term facility which provided for up to $560 million
      aggregate amount of term loan borrowings (the "New Credit Facility").
      The New Credit Facility was utilized to repay existing debt of
      approximately $134 million, to fund the cash portion of the Holiday Inn
      Acquisition and related closing costs.  The Company repaid $108 million
      of borrowings from the New Credit Facility in May 1997 with proceeds from
      the Offering (as defined in Note 10).  The treatment of the extraordinary
      costs related to the repayment of debt is more fully described in Note 8.

      On October 28, 1997, the Company completed the refinancing of the existing
      $560 million New Credit Facility.  The new financing (the "Refinancing")
      has two tranches: (a) $145 million at a fixed interest rate of 7.458%, a
      term of 10 years, and secured by 15 hotel properties; and, (b) $455
      million at a fixed interest rate of 7.66%, a term of 12 years, and secured
      by 62 hotel properties.


                                      F-15
<PAGE>   36
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


6.    LONG-TERM DEBT (CONTINUED)

      acquisitions and for other corporate purposes.

      The Company prepaid $40 million of its 11.22% Senior Secured Notes (the
      "Senior Notes") in December 1997.  In conjunction with the prepayment,
      the Company amended the Senior Note indenture to allow for a more
      flexible prepayment schedule.  In connection with the Refinancing,
      Bristol Hotel Operating Company, a wholly owned subsidiary of the
      Company, became a joint and several guarantor of the Senior Notes
      along with Bristol Hotel Asset Company.

      As discussed in Note 15, portions of the mortgage loans associated with
      three of the Company's properties have been allocated to a third party.

      The aggregate maturities of long-term debt for the five years subsequent
      to December 31, 1997, are as follows (in thousands):

<TABLE>
<CAPTION>
          Year ended December 31,
<S>                                                  <C>
                    1998  ........................   $  8,455
                    1999  ........................      8,387
                    2000  ........................     38,421
                    2001  ........................      9,146
                    2002  ........................     34,230
                          Thereafter .............    618,680
                                                     --------
                                                     $717,319
                                                     ========
</TABLE>

7.    INCOME TAXES

      Components of income tax expense from continuing operations for the years
      ended December 31, 1997 and 1996 and the eleven months ended December 31,
      1995, consist of the following (in thousands):

<TABLE>
<CAPTION>
                                      1997      1996      1995
                                    --------  --------  --------
<S>                                 <C>       <C>       <C>
              Federal:
                  Current.........  $ 12,683  $  4,486  $  3,245
                  Deferred........     4,637     5,301      (579)
              State:
                  Current.........     1,837       282       190
                  Deferred........       509       332       (34)
              Canada:
                  Current.........     1,618        --        --
                  Deferred........       723        --        --
                                    --------  --------  --------
                                    $ 22,007  $ 10,401  $  2,822
                                    ========  ========  ========
</TABLE>

      Components of income tax benefit from extraordinary items for the years
      ended December 31, 1997 and 1996, consist of the following (in
      thousands):

<TABLE>
<CAPTION>
                                                          1997      1996
                                                        --------  --------
<S>                                                     <C>       <C>
              Federal:
                  Current ............................  $  7,358  $     --
                  Deferred ...........................        --        --
              State:
                  Current ............................     1,098        --
                  Deferred ...........................        --        --
                                                        --------  --------

                                                        $  8,456  $     --
                                                        ========  ========
</TABLE>


                                      F-16
<PAGE>   37
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


7.    INCOME TAXES (CONTINUED)

      The Company estimates that its effective tax rate for 1997 approximated
      39.9%.  The actual income tax expense for the year ended December 31,
      1997, is computed by applying the U. S. federal statutory income tax
      rate, adjusted as follows:

<TABLE>
             <S>                                                                          <C>
              Income tax expense at the U. S. federal statutory rate ...................  35.0%
              State income taxes, net of federal benefit ...............................   3.6%
              Permanent differences and effect of higher Canadian tax rates ............   1.3%
                                                                                          ----
                                                                                          39.9%
                                                                                          ====
</TABLE>

      The tax effects of temporary differences that give rise to significant
      portions of the deferred tax assets and liabilities at December 31, 1997
      and December 31, 1996, are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                      1997      1996
                                                                    --------  --------
<S>                                                                 <C>       <C>
              Purchase accounting adjustments to
                 land and building ...............................  $248,866  $ 85,134
              Other ..............................................       994        --
                                                                    --------  --------
                  Gross deferred tax liabilities .................   249,860    85,134
                                                                    --------  --------
              Tax credit and NOL carryforwards ...................     4,011     5,502
              Accrued reserves ...................................     1,823     2,192
              Other ..............................................     1,496     1,821
                                                                    --------  --------
              Gross deferred tax asset ...........................     7,330     9,515
              Valuation allowance ................................        --        --
                                                                    --------  --------
              Deferred tax asset .................................     7,330     9,515
                                                                    --------  --------

                  Net deferred tax liability .....................  $242,530  $ 75,619
                                                                    ========  ========
</TABLE>

      The gross deferred tax liabilities relate principally to the temporary
      differences caused by the purchase accounting adjustments recorded as a
      result of the Combination and the Holiday Inn Acquisition.  For financial
      reporting purposes, the transactions were recorded under the principles
      of purchase accounting and, accordingly, the basis of the assets have
      been adjusted to fair market value.  For tax reporting purposes, the
      transactions resulted in the bases of the assets and liabilities being
      carried forward at their adjusted bases with some adjustment for certain
      gains recognized on the acquisition.  This differing treatment has
      created book bases in excess of tax bases and, accordingly, the related
      deferred tax liabilities associated with these differences have been
      recorded.  As the Company depreciates and amortizes the bases of its
      assets for book and tax purposes, it will record an expense for
      depreciation and amortization in excess of that claimed for tax purposes.
      This reversal of the temporary differences established through purchase
      accounting will result in the Company recording a credit to deferred tax
      expense for the tax effect of these differences.

      The remaining deferred tax assets are expected to be realized in future
      periods through use of existing tax NOL and tax credit carryforwards.


                                      F-17
<PAGE>   38
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


7.    INCOME TAXES (CONTINUED)

      For federal tax reporting purposes, net operating losses of $8,988,000
      and tax credits of $657,000 generated by United Inns and Harvey Hotel
      Corporation in prior years are available to be carried forward to periods
      expiring as follows (in thousands):

<TABLE>
<CAPTION>
             Year of Expiration                    Federal NOL     Tax Credits
             ------------------                    -----------     -----------
                <S>                                <C>             <C>
                    2001 ...................       $        --     $       142
                    2002 ...................                --             154
                    2003 ...................                --             158
                    2004 ...................                --             103
                    2005 ...................             3,924              58
                2006 to 2010 ...............             5,064              42
                                                   -----------     -----------
                                                   $     8,988     $       657
                                                   ===========     ===========
</TABLE>

      The losses and credits are subject to an annual loss limitation
      equivalent of approximately $4.8 million due to the changes in ownership
      of United Inns and Harvey Hotel Corporation which occurred in 1995.
      These carryforwards are further limited as they were incurred prior to
      the ownership of United Inns and Harvey Hotel Corporation by the Company.
      Accordingly, these carryforwards are available only to offset income and
      taxes associated with the operations of the hotels that generated them.

8.    EXTRAORDINARY ITEMS

      On April 28, 1997, the Company recognized an extraordinary loss of $2.2
      million ($1.3 million, net of tax) related to the early extinguishment of
      debt with proceeds from the New Credit Facility.  The Company incurred
      $479,000 of prepayment penalties and wrote off $1.7 million in deferred
      financing costs.

      The Company refinanced the New Credit Facility in October 1997 and
      recognized an extraordinary loss of $14.0 million ($8.4 million, net of
      tax) related to the early extinguishment of the New Credit Facility.  The
      loss on extinguishment reflects the write-off of deferred financing fees
      related to the New Credit Facility.

      The Company prepaid a portion of its Senior Notes on December 16, 1997.
      The Company prepaid $40 million of principal, and recognized an
      extraordinary loss of $5.0 million ($3.0 million, net of tax).  The
      extraordinary loss reflects the $2.4 million in prepayment penalties paid
      by the Company for the Senior Notes, as well as the write-off of
      approximately $2.6 million of deferred financing fees and discount on the
      Senior Notes.

9.    ACCOUNTS PAYABLE AND ACCRUED EXPENSES

      Accounts payable and accrued expenses consist of the following (in
      thousands):

<TABLE>
<CAPTION>
                                                                      DECEMBER 31, 1997  DECEMBER 31, 1996
                                                                      -----------------  -----------------
<S>                                                                   <C>                <C>
              Accounts payable .....................................  $           2,921  $           1,689
              Accrued payroll, payroll taxes and benefits ..........             15,480              5,208
              Accrued interest .....................................              3,738                993
              Accrued hotel operating expenses .....................              1,405                858
              Accrued Holiday Inn Acquisition
                  costs/conversion costs ...........................              1,104                 --
              Other ................................................              2,718              1,878
                                                                      -----------------  -----------------
                                                                      $          27,366  $          10,626
                                                                      =================  =================
</TABLE>


                                      F-18
<PAGE>   39
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


10.   STOCKHOLDERS' EQUITY

      On April 28, 1997, the Company's shareholders voted to amend the
      Company's certificate of incorporation to increase the number of
      authorized shares of common stock from 75,000,000 to 150,000,000.  As
      part of the consideration for the Holiday Inn Acquisition, the Company
      issued 9,381,308 shares (pre-split) of its common stock.

      On May 16, 1997, the Company issued 2,750,000 (pre-Stock Split) shares of
      its common stock at a price of $36 per share (the "Offering").  The
      Company issued an additional 412,500 shares (pre-Stock Split) on May 28,
      1997, pursuant to an over-allotment agreement with the underwriters of
      the Offering.  Proceeds from the issuances were approximately $108
      million (net of costs of $6.3 million).

      NON-EMPLOYEE DIRECTOR OPTIONS

      The Company instituted a Stock Option Plan for Non-Employee Directors
      (the "Director Plan") in 1995.  Only members of the board who are not
      employees of the Company or an employee of a 10% beneficial owner or an
      affiliate thereof will be eligible for option grants thereunder (an
      "Eligible Director").  An Eligible Director receives an option to
      purchase 7,500 shares of Common Stock at an exercise price equal to the
      market value on the date the individual becomes a director, and those
      options shall become exercisable 34% at the first next annual
      shareholders' meeting at which the individual is a director, and 33% at
      each of the next two consecutive years during which the individual is a
      director.  In addition, the Eligible Director will receive options to
      purchase 7,500 shares at each annual meeting during which the individual
      is a director, exercisable on the date of the next annual shareholders'
      meeting at which the individual is a director.  As of December 31, 1997,
      a total of 52,500 options had been granted to the three Eligible
      Directors on the board, 25,050 of which are currently exercisable.

      EMPLOYEE OPTIONS

      Under the Amended and Restated 1995 Equity Incentive Plan, the Company
      may award to participating officers and employees, options to purchase
      the Company's stock.  Employee stock options may be granted to officers
      and employees with an exercise price generally not less than the fair
      market value of the common stock at the date of grant.  Options expire at
      10 years from date of grant.  Options issued prior to December 31, 1995,
      have cliff vesting from 1998 - 2000 and options issued on or after
      January 1, 1996, vest ratably over a four- or five-year period from the
      date of the grant.  There were 2,069,441 employee options outstanding at
      December 31, 1997, of which 82,800 were exercisable.

      SFAS 123 DISCLOSURE

      In October 1995, the Financial Accounting Standards Board issued
      Statement of Financial Accounting Standards No.  123, "Accounting for
      Stock-Based Compensation" ("SFAS 123"), effective for fiscal years
      beginning after December 15, 1995.  SFAS 123 encourages, but does not
      require, companies to record compensation cost for stock-based employee
      compensation plans at fair value.  The Company has chosen to continue to
      account for stock-based compensation using the intrinsic value method
      prescribed in Accounting Pronouncement Bulletin Opinion No. 25,
      "Accounting for Stock Issued to Employees" ("APB 25").  Accordingly,
      compensation cost for stock options is measured as the excess, if any, of
      the market price of the Company's stock at the date of the grant over the
      amount the employee must pay to acquire the stock.  The Company,
      therefore, does not believe that the implementation of SFAS 123 has had a
      material adverse impact on the Company's financial position or results of
      operations.


                                      F-19
<PAGE>   40
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


10.   STOCKHOLDERS' EQUITY (CONTINUED)

      SFAS 123 DISCLOSURE (continued)

      However, had compensation cost for these plans been determined consistent
      with the method of SFAS No. 123, the Company's net income and earnings
      per share would have been reduced to the following pro forma amounts
      (dollars in thousands):

<TABLE>
<CAPTION>
                                                 YEAR ENDED         YEAR ENDED     ELEVEN MONTHS ENDED
                                             DECEMBER 31, 1997   DECEMBER 31, 1996  DECEMBER 31, 1995
                                             -----------------   ----------------- -------------------
<S>                          <C>             <C>                 <C>               <C>
             Net Income      As Reported      $    20,473          $   17,749         $    3,061
                             Pro Forma             19,060              16,865              2,621
             Basic EPS       As Reported             0.55                0.71               0.17
                             Pro Forma               0.51                0.68               0.15
             Diluted EPS     As Reported             0.53                0.70               0.17
                             Pro Forma               0.50                0.67               0.15
</TABLE>

      A summary of the status of the Company's stock option plan at December
      31, 1997, 1996 and 1995, (adjusted for Stock Split) and changes during
      the years then ended is presented in the table and narrative below:

<TABLE>
<CAPTION>
                                                1997                        1996                          1995
                                    --------------------------- ---------------------------  ----------------------------
                                               WEIGHTED AVERAGE            WEIGHTED AVERAGE              WEIGHTED AVERAGE
                                      SHARES    EXERCISE PRICE    SHARES    EXERCISE PRICE     SHARES     EXERCISE PRICE
                                    ---------- ---------------- ---------- ----------------  ----------  ----------------
<S>                                 <C>          <C>            <C>        <C>               <C>         <C>
      Outstanding at January 1 ...   1,613,363   $    10.57      1,190,766    $     8.41             --    $       --
      Options granted ............     520,400        25.06        435,000         16.39      1,190,766          8.41
      Options exercised ..........      (6,929)       16.47             --            --             --
      Options expired ............      (4,893)        9.78        (12,403)         8.33             --            --
                                    ----------   ----------     ----------    ----------     ----------    ----------

      Options outstanding at
         December 31 .............   2,121,941   $    14.10      1,613,363    $    10.57      1,190,766    $     8.41
                                    ==========   ==========     ==========    ==========     ==========    ==========

      Options exercisable at
         December 31 .............     107,850   $    16.60          5,100    $    15.00             --            --
                                    ==========   ==========     ==========    ==========     ==========    ==========

      Weighted average fair value
         of options ..............  $     7.82                  $     5.76                   $     4.11
                                    ==========                  ==========                   ==========
</TABLE>

      The 2,121,941 options outstanding at December 31, 1997, have exercise
      prices between $8.33 and $28.25 with a weighted average exercise price of
      $14.10 and a weighted average remaining contractual life of 8.1 years.
      At December 31, 1997, 107,850 of these options (with a weighted average
      exercise price of $16.60) are exercisable.

      The fair value of each option grant is estimated on the date of grant
      using the Black-Scholes option pricing model with the following
      weighted-average assumptions used for grants in 1997, 1996 and 1995;
      risk-free interest rates from 5.30% to 7.04%; no expected dividend
      yields; expected lives of one to seven years; expected volatility of
      33.37%.


                                      F-20
<PAGE>   41
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


11.   OPERATING LEASES

      The Company leases certain land, office space and equipment under
      noncancellable operating lease commitments.  Minimum rentals due under
      these agreements for the next five years and thereafter are as follows
      (in thousands):

<TABLE>
<CAPTION>
             Year Ended December 31,
                    <S>                                 <C>
                       1998 .....................       $  11,933
                       1999 .....................          11,976
                       2000 .....................          12,046
                       2001 .....................          12,029
                       2002 .....................          11,887
                    Thereafter ..................         216,075
                                                        ---------
                                                        $ 275,946
                                                        =========
</TABLE>

      Leases include long-term ground leases for certain hotels, generally with
      renewal options.  Certain leases contain provisions for the payment of
      contingent rentals based on a percentage of sales.

      The Company leases certain hotel space to third-party vendors. Future
      minimum rentals to be received under noncancellable operating leases that
      have initial or remaining lease terms in excess of one year are as
      follows (in thousands):

<TABLE>
<CAPTION>
             Year Ended December 31,
                    <S>                                 <C>
                       1998 .....................       $    3,582
                       1999 .....................            3,562
                       2000 .....................            3,289
                       2001 .....................            3,116
                       2002 .....................            2,720
                    Thereafter ..................           13,868
                                                        ----------
                                                        $   30,137
                                                        ==========
</TABLE>

12.   MANAGEMENT CONTRACTS

      The Company acquired the management of 15 hotels in the Holiday Inn
      Acquisition, three of which were owned by joint ventures in which the
      Company owned a 50% interest.  The purchase price allocated to these
      contracts at April 28, 1997 was $4.4 million and is being amortized on a
      straight-line basis over the remaining lives of the agreements, which
      range from one to 11 years.  The amortization of the purchase price
      recorded in 1997 was $878,000.  Management fee income was $4.9 million in
      1997, $2.5 million in 1996, and $1.4 million in 1995.  These management
      contracts may contain provisions which allow the third- party owner to
      terminate the contract for such reasons as sale of the property, for
      cause or without cause. Therefore, the Company cannot guarantee that it
      will continue to manage these properties to the contract expiration date.

      The Company acquired the remaining 50% interest in one of the joint
      ventures in which it was a partner in December 1997.  (See Note 13.)

13.   INVESTMENTS IN JOINT VENTURES

      The Company acquired 50% interests in three joint ventures in the Holiday
      Inn Acquisition.  The purchase price allocated to these joint ventures
      was approximately $12 million and is being amortized on a straight-line
      basis over the estimated life of the assets acquired.  Amortization
      expense of $308,000 was recorded in 1997.


                                      F-21
<PAGE>   42
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


13.   INVESTMENTS IN JOINT VENTURES (CONTINUED)

      On December 11, 1997, the Company acquired the remaining 50% interest in
      the Milpitas Joint Venture for $4.25 million.  Concurrently with the
      acquisition, the Company paid off all outstanding debt related to the
      property of $25.7 million.  None of the original $12 million purchase
      price allocated to the joint ventures in the Holiday Inn Acquisition was
      attributed to the Milpitas Joint Venture.

14.   BENEFITS

      Health (including fully insured term life and accidental death and
      dismemberment), dental and disability coverage is provided to the
      Company's employees through the Welfare Benefit Trust (the "Trust").  The
      Company maintains varying levels of stop-loss and umbrella insurance
      policies to limit the Company's per occurrence and aggregate liability in
      any given year.  Actual claims and premiums on stop-loss insurance,
      medical and disability policies are paid from the Trust.  The Trust is
      funded through a combination of employer and employee contributions.  The
      Trust also pays work-related injury claims which are funded by the
      employer for its employees in Texas.  Since April 1, 1995, all employees
      have been eligible for participation in the benefits provided through the
      Trust.  The Company provided $6.1 million and $2.9 million related to
      these benefits for the years ended December 31, 1997 and 1996,
      respectively.

      The Company offers a Profit Sharing Plan and Trust ("401(k) Plan") to
      certain employees.  The 401(k) Plan is designed to be a qualified trust
      under Section 401(a) of the Internal Revenue Code.  Under the 401(k)
      Plan, eligible employees are allowed to defer up to 16% of their income
      on a pretax basis through contributions to the Plan; however, only the
      first 6% of pretax income is subject to matching by the Company.  The
      Company may elect to make matching contributions of up to 50% of the
      employees' matchable contributions subject to certain performance
      measures of the Company.  The Company provided for matching contributions
      for the years ended December 31, 1997 and 1996 totaling $1.5 million and
      $135,000, respectively.

15.   COMMITMENTS AND CONTINGENCIES

      Substantially all of the Company's hotel properties are (or will be in
      the next year) operated pursuant to franchise or license agreements
      ("Franchise Agreements"), primarily with Holiday Inn Franchising, Inc. or
      its affiliates.  The Company also operates hotels under franchise
      agreements with Marriott International, Inc., Hampton Inn (a division of
      Promus Hotels, Inc.), Ramada Franchise Systems, Inc. and Days Inn Inc. of
      America Franchising Inc.  The Franchise Agreements generally require the
      payment of a monthly royalty fee based on gross room revenue and various
      other fees associated with certain marketing or advertising and
      centralized reservation services, also generally based on gross room
      revenues.  The Franchise Agreements have various durations through the
      year 2017, and generally may not be terminated without the payment of
      substantial fees.  Franchise fees of $19.5 million and $4.1 million were
      paid during the years ending December 31, 1997 and 1996, respectively.

      The Franchise Agreements generally contain specific standards for, and
      restrictions and limitations on, the operation and maintenance of the
      hotels which are established by the franchisors to maintain uniformity in
      the system created by each such franchisor.  Such standards generally
      regulate the appearance of the hotel, quality and type of goods and
      services offered, signage and protection of trademarks.  Compliance with
      such standards may from time to time require significant expenditures for
      capital improvements.

      The Company is currently involved in certain guest and customer claims,
      employee wage claims and other disputes arising in the ordinary course of
      business.  In the opinion of management, the pending litigation will not
      have a materially adverse effect on the Company's financial position or
      results of operations.

      In connection with the administration of the Dallas County Probate Court
      of the estate of the deceased wife of H.K. Huie, Jr., one of Mr. Huie's
      daughters (the "Plaintiff"), alleged self dealing and breach of duty and


                                      F-22
<PAGE>   43
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


15.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

      trust by Mr. Huie as executor and testamentary trustee under his wife's
      will and in connection with his actions as the managing general partner
      of Harvey Hotel Company and related partnerships and ventures (the
      "Probate Proceeding").  Several of the Company's officers and certain
      subsidiaries were also named defendants in the Probate Proceeding.  In
      November 1995, the Company and the Plaintiff entered into a settlement
      agreement and release (the "Settlement Agreement") pursuant to which
      Plaintiff agreed to release the Company, including its subsidiaries, from
      the lawsuit.  Pursuant to the Settlement Agreement, the Company paid an
      aggregate of $2.4 million for the Plaintiff's 1% interest in Harvey Hotel
      Company and a full release from all claims and causes of action.
      However, at that time, the named officers remained defendants in the
      Probate Proceeding.  In the summer of 1996, during continuing mediation
      with the officers, the Plaintiff threatened the Company with further
      action, claiming fraud and misrepresentation in the negotiation of the
      November 1995 Settlement Agreement.   In August 1996, there was a final
      resolution of the Probate Proceeding, a result of which the Company paid
      an additional $0.75 million for the full satisfaction of all claims and
      causes of action which could be asserted against the Company, its
      subsidiaries or its officers.  The Company had reserved $1.65 million for
      this litigation.  As a result, the Company recognized $0.9 million ($0.6
      million after tax) as other income during the third quarter of 1996.

      On March 28, 1997, the Company paid approximately $663,000 to the State
      of Tennessee Department of Revenue in full settlement of all claims for
      franchise and excise tax related to United Inns, Inc.

      All of the owned hotels of the Company have undergone Phase I
      environmental assessments which generally provide a physical inspection
      and data base search but not soil or groundwater analysis.  In addition,
      most of the Company's hotels have been inspected to determine the
      presence of asbestos-containing materials ("ACM's").  While ACM's are
      present in certain of the Company's properties, operations and
      maintenance programs for maintaining such ACM's have been implemented, or
      the ACM's have been scheduled to be or have been abated, at such hotels.
      None of the environmental assessments conducted to date have revealed any
      environmental condition that management believes would have a material
      adverse effect on the Company's business, assets or results of
      operations, nor is management aware of any such condition. However, it is
      possible that these assessments have not revealed all potential
      environmental liabilities or that there are material environmental
      liabilities of which management is not aware.

      In September 1995, the Company disposed of certain of its non-hotel
      properties to HH Land Company, L.P. ("HH Land Company").  Upon
      acquisition of the non-hotel properties, HH Land Company assumed all
      liabilities associated with the non-hotel properties through a formal
      indemnification agreement, including environmental liabilities associated
      with the properties. The Company remains contingently liable for the
      environmental costs associated with the properties. At such time that the
      Company determines that it is not probable that HH Land Company will
      fully pay the remediation costs related to the disposed properties, the
      Company will recognize such liabilities.

      The Company leases the land underlying several of its hotels under
      various long-term leases through the year 2063.  Lease payments under the
      agreements were $11.0 million and $2.6 million in 1997 and 1996,
      respectively.


                                      F-23
<PAGE>   44
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


15.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

      The Company and Mr. Huie, representing various land ventures, are
      co-borrowers of funds secured by Harvey Hotel - DFW Airport, Harvey Hotel
      - Dallas, Bristol Suites, and the various related land parcels. The
      Company and Mr. Huie agreed to an assignment of the debt to the various
      unrelated land ventures resulting in the assignment of 23.73%, 24.24% and
      22.18% of the debt associated with the borrowings for each property,
      respectively.  The related land parcels underlying each hotel are owned
      by Mr. Huie through the land ventures.  The total debt and the amount
      allocated to Mr. Huie are as follows (in thousands):

<TABLE>
<CAPTION>
                                                           1997                  1996
                                                    --------------------  --------------------
                                                      Total    Allocated    Total    Allocated
                                                      Debt      to Huie     Debt      to Huie
                                                    ---------  ---------  ---------  ---------
<S>                                                 <C>        <C>        <C>        <C>
              Harvey Hotel - DFW Airport .........  $  24,275  $   5,762  $  25,581  $   6,071
              Harvey Hotel - Dallas ..............      7,442      1,802      7,600      1,843
              Bristol Suites .....................     19,378      4,298     20,756      4,604
</TABLE>

      The Company is jointly and severally liable in the event of nonpayment by
      Mr. Huie of the debt allocated.  For December 31, 1997 and 1996, the
      allocated amounts have not been reflected in the consolidated financial
      statements of the Company.  However, the Company does not record interest
      expense on the allocated debt because payments made to Mr. Huie are
      appropriately recorded as rental expense under the related land leases.
      The land parcels at the respective hotels are security for the additional
      liability.

16.   RELATED PARTY TRANSACTIONS

      HOTEL PROPERTIES AGREEMENT

      Concurrently with the Holiday Inn Acquisition, the Company, and Holiday
      Corporation and its affiliates (collectively, "HC") entered into a hotel
      properties agreement (the "Hotel Properties Agreement").  Pursuant to the
      Hotel Properties Agreement, the Company will offer to HC the opportunity
      to enter into a standard HC franchise agreement for each hotel that
      Bristol acquires, manages or develops that meets specified criteria.  The
      Hotel Properties Agreement requires that 85% of the rooms in the
      Company's owned, leased and managed hotels be operated under a Holiday
      Inn brand, subject to certain limitations and approvals.  The above
      provisions of the Hotel Properties Agreement will expire the earlier of
      (i) the date that HC terminates its obligation at any time following 24
      months after the Holiday Inn Acquisition (the "Holiday Notice") or (ii)
      the date that HC no longer holds a controlling interest in the franchisor
      of the Holiday Inn brands.

      Additionally, the Company has a right of first refusal on any entity or
      other interest meeting certain criteria that HC wishes to acquire or
      develop, subject to certain limitations.  HC can terminate its obligation
      under this provision in accordance with the Holiday Notice.

      The Company has agreed to enter into Franchise Agreements with HC
      pursuant to which certain Bristol properties will be rebranded to Holiday
      Inn brands, subject to normal franchising procedures.  Franchise fees for
      these rebranded hotels will equal 0% of room revenue for 1997, 1% in
      1998, 3% in 1999 and 5% in 2000.  Amounts paid to HC pursuant to
      Franchise Agreements and related marketing, advertising and reservation
      services were $21.8 million in 1997, including $13.1 million for
      franchise royalty fees and $4.5 million of franchise marketing fees.


                                      F-24
<PAGE>   45
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


16.   RELATED PARTY TRANSACTIONS (CONTINUED)

      INTERIM SERVICES AGREEMENT

      The Company entered into an interim services agreement (the "ISA
      Agreement") with Holiday Hospitality Corporation ("HHC") for HHC to
      provide certain accounting, payroll, employee benefit, training,
      treasury, management information and construction and design services to
      Bristol for a transition period following the Holiday Inn Acquisition.
      In consideration for such services, the Company reimbursed HHC for the
      estimated cost incurred in connection with providing the services,
      totaling $1.3 million for the year ended December 31, 1997.  The ISA
      Agreement expired in October 1997.

17.   FAIR VALUE

      The Company has estimated the fair value of its financial instruments at
      December 31, 1997 and 1996, as required by Statement of Financial
      Accounting Standards No. 107, "Disclosure about Fair Value of Financial
      Instruments." The carrying values of cash and cash equivalents, accounts
      receivable, accounts payable and accrued expenses are reasonable
      estimates of their fair values.  Marketable securities are carried at
      fair value, which is determined based upon quoted market prices.  The
      carrying values of variable and fixed rate debt are reasonable estimates
      of their fair values.

18.   QUARTERLY FINANCIAL DATA (UNAUDITED)

      The unaudited consolidated quarterly results of operations for the
      Company and the unaudited combined quarterly results of operations for
      the Predecessor are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                     1995
                                                       ---------------------------------------------------------------------
                                                       HARVEY HOTEL           BRISTOL HOTEL COMPANY
                                                        COMPANIES     FEBRUARY TO    SECOND        THIRD           FOURTH
                                                       JANUARY 1995      MARCH       QUARTER       QUARTER         QUARTER
                                                       ------------  ------------- ------------  ------------   ------------
<S>                                                    <C>           <C>           <C>           <C>            <C>
      Revenues ......................................  $      5,943  $     29,910  $     43,040  $     46,205   $     46,040
      Operating income ..............................         1,932         6,221         8,016         5,484          6,874
      Income (loss) before extraordinary item .......         1,280         2,268         2,056          (290)           935
      Net income (loss) .............................         1,280         2,268         2,056          (290)          (973)
      Earnings per common share:
          Income (loss) before extraordinary item:
             Basic ..................................            --  $       0.13  $       0.12  $      (0.02)  $       0.05
             Diluted ................................            --  $       0.13  $       0.12  $      (0.02)  $       0.05
          Net income (loss):
             Basic ..................................            --  $       0.13  $       0.12  $      (0.02)  $      (0.05)
             Diluted ................................            --  $       0.13  $       0.12  $      (0.02)  $      (0.05)
      Weighted average number of common and
          common equivalent shares:
             Basic ..................................            --    17,436,267    17,436,267    17,436,267     18,967,108
             Diluted ................................  .         --    17,460,202    17,479,061    17,479,953     19,050,967

</TABLE>


                                      F-25
<PAGE>   46
                             BRISTOL HOTEL COMPANY
                      HARVEY HOTEL COMPANIES (PREDECESSOR)
      NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)


18.    QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              1996
                                                       --------------------------------------------------
                                                                      BRISTOL HOTEL COMPANY
                                                          FIRST       SECOND        THIRD       FOURTH
                                                         QUARTER      QUARTER      QUARTER      QUARTER
                                                       -----------  -----------  -----------  -----------
<S>                                                    <C>          <C>          <C>          <C>
       Revenues .....................................  $    49,677  $    51,237  $    58,571  $    52,355
       Operating income .............................       10,318       11,282       16,073        9,093
       Income before extraordinary item .............        3,863        4,375        6,835        2,676
       Net income ...................................        3,863        4,375        6,835        2,676
       Earnings per common share:
          Income before extraordinary item:
             Basic ..................................  $      0.16  $      0.18  $      0.28  $      0.11
             Diluted ................................  $      0.15  $      0.17  $      0.27  $      0.10
          Net income:
             Basic ..................................  $      0.16  $      0.18  $      0.28  $      0.11
             Diluted ................................  $      0.15  $      0.17  $      0.27  $      0.10
       Weighted average number of common and
          common equivalent shares:
          Basic .....................................   24,848,760   24,848,760   24,848,760   24,848,760
          Diluted ...................................   25,511,455   25,552,515   25,530,737   25,524,361

</TABLE>


<TABLE>
<CAPTION>
                                                                               1997
                                                       ------------------------------------------------------
                                                                        BRISTOL HOTEL COMPANY
                                                           FIRST        SECOND        THIRD        FOURTH
                                                          QUARTER       QUARTER      QUARTER       QUARTER
                                                       ------------  ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>           <C>
       Revenues .....................................  $     58,261  $    131,615  $    163,005  $    151,637
       Operating income .............................        13,301        26,909        32,252        25,434
       Income before extraordinary item .............         4,410         9,622        12,066         7,116
       Net income (loss) ............................         4,410         8,284        12,066        (4,287)
       Earnings per common share:
          Income (loss) before extraordinary item:
             Basic ..................................  $       0.18  $       0.26  $       0.28  $       0.16
             Diluted ................................  $       0.17  $       0.25  $       0.27  $       0.16
          Net income (loss):
             Basic ..................................  $       0.18  $       0.22  $       0.28  $      (0.10)
             Diluted ................................  $       0.17  $       0.22  $       0.27  $      (0.10)
       Weighted average number of common and
          common equivalent shares:
          Basic .....................................    24,848,760    37,041,425    43,635,401    43,636,444
          Diluted ...................................    25,796,808    37,997,744    44,643,133    44,629,022
</TABLE>

       Earnings per common share amounts and weighted average number of common
       and common equivalent shares have been retroactively adjusted to reflect
       the July 15, 1997 Stock Split and calculated in accordance with
       Statement of Financial Accounting Standards No. 128, "Earnings Per
       Share."  The sum of the earnings (loss) per common share for the four
       quarters differs from the annual earnings per common share due to the
       required method of computing the weighted average number of shares in
       the respective periods.

19.    SUBSEQUENT EVENT - OMAHA ACQUISITION

       On February 2, 1998, the Company announced that it had entered into a
       definitive agreement to acquire 20 midwestern hotels.  Under the
       transaction, the Company will acquire by merger Omaha Hotel, Inc. and
       will purchase an individual hotel.  The total consideration for these
       assets is as follows:  $19.1 million in cash, $40.9 million of assumed
       debt and 1.43 million shares of the Company's common stock.  The
       portfolio consists of nine full-service Holiday Inns, five Holiday Inns
       Express hotels, five Hampton Inns and one Homewood Suites with locations
       in Omaha, Nebraska; Moline, Illinois; Davenport, Iowa; central Kansas
       and Midland/Odessa, Texas.  The acquisition is anticipated to close in
       April 1998.

20.    SUBSEQUENT EVENT - PROPOSED MERGER

       On March 24, 1998, the Company announced a proposed merger with FelCor
       Suite Hotels, Inc. ("FelCor"), subject to approval by shareholders of
       both companies and final documentation. Under the terms of the proposed
       merger, FelCor will acquire the real estate holdings and associated debt
       of the Company in return for 31.7 million shares of newly issued FelCor
       stock. Prior to the merger, the Company will spin off, as a taxable
       dividend, all of its non-real estate holdings into a newly formed public
       company to be known as Bristol Hotels & Resorts, Inc. ("New Bristol").

       Each of the Company's outstanding common shares will be exchanged for
       .685 shares of FelCor common stock. In addition, Bristol shareholders
       will receive a taxable distribution of one share of New Bristol common
       stock for each share of Bristol.

       The merger is expected to close by the end of June 1998.


                                      F-26
<PAGE>   47
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Company has duly caused this Form 10-K to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 30th day of March, 1998.

                                       BRISTOL HOTEL COMPANY

                                       BY: /s/ John D. Bailey
                                           ------------------------------------
                                           John D. Bailey
                                           Vice President, Controller and
                                           Chief Accounting Officer

Pursuant to the requirements of the Securities Act of 1934, this Form 10-K has
been signed below by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
                  Signatures                                              Title
                  ----------                                              -----
         <S>                                                    <C>
         /s/ Donald J. McNamara
         ------------------------------------------
         Donald J. McNamara                                     Chairman of the Board; Director

         /s/ J. Peter Kline
         ------------------------------------------
         J. Peter Kline                                         President and Chief Executive Officer; Director

         /s/ John A. Beckert
         ------------------------------------------
         John A. Beckert                                        Executive Vice President and
                                                                Chief Operating Officer; Director

         /s/ Jeffrey P. Mayer
         ------------------------------------------
         Jeffrey P. Mayer                                       Senior Vice President and
                                                                Chief Financial Officer

         /s/ John D. Bailey
         ------------------------------------------
         John D. Bailey                                         Vice President, Controller and
                                                                Chief Accounting Officer

         /s/ David A. Dittman
         ------------------------------------------
         David A. Dittman                                       Director

         /s/ Kurt C. Read
         ------------------------------------------
         Kurt C. Read                                           Director

         /s/ Robert H. Lutz, Jr.
         ------------------------------------------
         Robert H. Lutz, Jr.                                    Director

         /s/ Reginald K. Brack, Jr.
         ------------------------------------------
         Reginald K. Brack, Jr.                                 Director

         /s/ Richard C. North
         ------------------------------------------
         Richard C. North                                       Director

         /s/ Craig H. Hunt
         ------------------------------------------
         Craig H. Hunt                                          Director
</TABLE>





<PAGE>   48




                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
      Exhibit
        No.                             Description
      -------                           -----------
<S>               <C>
         2.1      Agreement and Plan of Merger dated as of December 15, 1996
                  among Holiday Corporation, Holiday Inns, Inc. and the Company
                  (incorporated by reference to Annex A of the Company's 1997
                  Proxy Statement).

         2.2      Amendment No. 1 to Agreement and Plan of Merger dated as of
                  April 1, 1997 among Holiday Corporation, Holiday Inns, Inc.
                  and the Company (incorporated by reference to Exhibit 2.1.b of
                  the Company's Current Report on Form 8-K dated April 28,
                  1997).

         2.3      Agreement and Plan of Merger dated as of January 30, 1998
                  among Bristol Hotel Company, Bristol Omaha Hotel Company, and
                  Omaha Hotel Inc., et al.

         2.4      Agreement and Plan of Merger as of March 23, 1998 among
                  Bristol Hotel Company and FelCor Suites Hotel, Inc.

         3.1      Amended and Restated Certificate of Incorporation of the
                  Company (incorporated by reference Exhibit 4.1 of the
                  Company's Form S-8 Registration Statement [333-27633] dated
                  May 22, 1997).

         3.2      Amended and Restated By laws of the Company as adopted and in
                  effect as of April 28, 1997 (incorporated by reference to
                  Exhibit 4.2 of the Company's Form S-8, Registration Statement
                  dated May 22, 1997).

         4.1      Indenture, dated as of December 18, 1995, among the Company as
                  issuer, Bristol Hotel Asset Company as guarantor, and The Bank
                  of New York as trustee (incorporated by reference to Exhibit
                  4.1 of the Company's Annual Report of Form 10-K for the year
                  ended December 31, 1995).

         4.2      Form of Old Notes (included in Exhibit 4.1).

         4.3      Form of New Notes (included in Exhibit 4.1).

         4.4      Exchange and Registration Rights Agreement, dated as of
                  December 18, 1995, among the Company, Bristol Hotel Asset
                  Company, Bankers Trust Company and New England Cayman
                  Corporation (incorporated by reference to Exhibit 4.4 to the
                  Form S-4).

         10.1     Form of Indemnification Agreement among the Company and each
                  of its directors (incorporated herein by reference to Exhibit
                  10.1 of the Company's Registration Statement on Form S-1 [File
                  No. 33-97916], as amended [the "Registration Statement"]).

         10.2     Registration Rights Agreement, dated as of February 27, 1995,
                  among the Company, United/Harvey Holdings, L.P. and the other
                  parties signatory thereto (incorporated by reference to
                  Exhibit 10.10 to the Registration Statement).

         10.3     Stockholders' Agreement, dated as of February 27, 1995, among
                  the Company, United/Harvey Holdings, L.P. and the other
                  parties signatory thereto (incorporated by reference to
                  Exhibit 10.11 to the Registration Statement).

         10.4     Put/Call Option Agreement, dated as of February 27, 1995,
                  between the Company and H. K. Huie, Jr. (incorporated by
                  reference to Exhibit 10.12 to the Registration Statement).

         10.5     Management Bonus Plan (incorporated by reference to Exhibit
                  10.16 to the Registration Statement).
</TABLE>





<PAGE>   49
<TABLE>
<S>               <C>
         10.6     Amended and Restated 1995 Equity Incentive Plan (incorporated
                  by reference to Exhibit 10.15 to the Form S-4).

         10.7     Stock Option Plan for Non-Employee Directors (incorporated
                  herein by reference to Exhibit 10.16 to the Form S-4).

         10.8     Amended and Restated Put/Call Option Agreement, Amendment to
                  Combination Agreement, Stockholders' Agreement, and
                  Registration Rights Agreement and Termination of Consulting
                  Agreement, dated as of November 16, 1995, among the Company,
                  United/Harvey Holdings, L.P., J. Peter Kline, John A. Beckert,
                  Richard N. Beckert, Edward J. Rohling, Robert L. Miars, Harvey
                  Hotel Company, Ltd., Harvey HTS, Inc., Endlease, Inc. and
                  Harvey Hotel DFW, Inc. (incorporated by reference to Exhibit
                  10.19 to the Registration Statement).

         10.9     Stockholders' Agreement dated as of April 28, 1997 by and
                  among United/Harvey Holdings, L.P., Holiday Corporation, Bass
                  America, Inc. Bass plc and the Company (incorporated by
                  reference to Exhibit 2 of Schedule 13-D filed May 8, 1997).

         10.10    Loan Agreement dated as of October 10, 1997 among Bristol
                  Lodging Company, Bristol Lodging Holding Company, Nomura Asset
                  Capital Corporation as administrative agent and collateral
                  agent for Lenders and Bankers Trust Company as co-agent for
                  lenders.

         10.11    Loan Agreement dated as of October 10, 1997 among Bristol
                  Hotel Asset Company, BHAC Canada, Inc., Nomura Asset Capital
                  Corporation as administrative agent and collateral agent for
                  Lenders and Bankers Trust Company as co-agent for Lenders.

         10.12    Employment Agreement between the Company and J. Peter Kline
                  effective as of April 28, 1997.

         10.13    Employment Agreement between the Company and John A. Beckert
                  effective as of April 28, 1997.

         10.14    Earnest Money Contract by and between Highland Manor, Inc. and
                  Bristol Omaha Hotel Company dated as of January 30, 1998.

         11.1     Computation of Earnings per Common Share.

         16.1     Letter of Price Waterhouse LLP dated June 20, 1996 regarding
                  change in certifying accountant (incorporated by reference to
                  Exhibit 16.1 of the Current Report on Form 8-K dated June 17,
                  1996).

         21.1     List of Subsidiaries of the Company.

         27.1     Financial Data Schedule.
</TABLE>