UNITED STATES        SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**Form 10-Q**

**(Mark One)**

**     ****/X/****          ****QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934        For the quarterly period ended****March 31, 200****8**

**or**

**     ****/****   ****/****          ****TRANSITION REPORT PURSUANT TO        SECTION 13 OR 15(d) OF**

**THE SECURITIES EXCHANGE ACT OF 1934        For the transition period from to**

**Commission file number****333****-****3959-01**

**FelCor Lodging****Limited Partnership**

(Exact name of registrant as specified in its charter)

| **Delaware**                                                  |   | **75-****2544994**                    |
|---------------------------------------------------------------|--------|---------------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (I.R.S. Employer

Identification No.) |

| **545 E. John Carpenter Freeway, Suite 1300, Irving, Texas** |   | **75062**  |
|--------------------------------------------------------------|--------|------------|
| (Address of principal executive offices)                     |   | (Zip Code) |

**(972) 444-4900**

(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for        the past 90 days. |X| Yes [ ] No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated fileror a smaller reporting company. See definition of“large accelerated filer,”“accelerated filer”and “smaller reporting company”in Rule 12b-2 of the Exchange Act. (Check one):

| Large accelerated filer     [ ]                                            |   | Accelerated filer [ ]         |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------------|
| Non-accelerated filer     |X|(Do not check if a smaller reporting company) |   | Smaller reporting company [ ] |

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes |X| No

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**FELCOR LODGING****LIMITED PARTNERSHIP**         

**INDEX**

|                                    |                                                                                                                                                                                                                                              | Page   |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                    | **PART I. -- FINANCIAL INFORMATION**                                                                                                                                                                                                              |   |
|                                    |                                                                                                                                                                                                                                              |   |
| Item 1.                                 | Financial Statements                                                                                                                                                                                                     | 3      |
|                                    | Consolidated Balance SheetsMarch 31, 2008and December 31, 2007(unaudited)                                                                                                                       | 3      |
|                                    | Consolidated Statements of Operations – For the ThreeMonthsEnded                                                                                                                                                                            |   |
|                                    | March 31,2008and 2007(unaudited)                                                                                                                                                                                         | 4      |
|                                    | Consolidated Statements of ComprehensiveIncome– For the ThreeMonthsEnded                                                                                                                                                                    |   |
|                                    | March 31, 2008and 2007(unaudited)                                                                                                                                                                                        | 5      |
|                                    | Consolidated Statements of Cash Flows – For theThreeMonthsEndedMarch 31,                                                                                                                                                                    |   |
|                                    | 2008and2007(unaudited)                                                                                                                                                                                                   | 6      |
|                                    | Notes to Consolidated Financial Statements                                                                                                                                                                               | 7      |
| Item 2.                                 | Management’s Discussion and Analysis of Financial Condition and Results of Operations                          | 21     |
|                                    | General                                                                                                                                                                                                                  | 21     |
|                                    | Financial Comparison                                                                                                                                                                                                     | 21     |
|                                    | Results of Operations                                                                                                                                                                                                    | 22     |
|                                    | Non-GAAP Financial Measures                                                                                                                                                                                              | 25     |
|                                    | Hotel Portfolio Composition                                                                                                                                                                                              | 31     |
|                                    | Hotel Operating Statistics                                                                                                                                                                                               | 32     |
|                                    | Liquidity and Capital Resources                                                                                                                                                                                          | 34     |
|                                    | Inflation                                                                                                                                                                                                                | 35     |
|                                    | Seasonality                                                                                                                                                                                                              | 35     |
|                                    | Disclosure Regarding Forward-Looking Statements                                                                                                                                                                          | 36     |
| Item 3.                                 | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                               | 36     |
| Item 4.                                 | Controls and Procedures                                                                                                                                                                                                  | 37     |
|                                    |                                                                                                                                                                                                                                              |   |
|                                    | **PART II. – OTHER INFORMATION**                                                                                                                                                                                                            |   |
|                                    |                                                                                                                                                                                                                                              |   |
| Item 6.                                 | Exhibits                                                                                                                                                                                                                 | 38     |
|                                    |                                                                                                                                                                                                                                              |   |
| SIGNATURE      | 39                                                                                                                                                                                                                                                |

2

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**PART I. -- FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**FELCOR LODGING****LIMITED PARTNERSHIP**         **CONSOLIDATED BALANCE SHEETS**

**(****unaudited,****in thousands)**

|                                                                                                                                                                      | **March 31,                    200****8** |      | **December 31,                    200****7** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-----------|----------------------------------------------|
| **ASSETS**                                                                                                                                                                |                                      |      |                                         |   |   |
| Investment in hotels, net of accumulated depreciation of $722,591at  March 31, 2008and $694,464at December 31, 2007                         | $                                         | 2,384,516 |                                         |   | $ | 2,400,057 |   |
| Investment in unconsolidated entities                                                                                                            |                                      | 110,369   |                                         |   |   | 127,273 |   |
| Cash and cash equivalents                                                                                                                        |                                      | 71,325    |                                         |   |   | 57,609 |   |
| Restricted cash                                                                                                                                  |                                      | 16,119    |                                         |   |   | 14,846 |   |
| Accounts receivable, net of allowance for doubtful accounts of $304at March 31, 2008and $307at December 31, 2007                                 |                                      | 50,810    |                                         |   |   | 37,871 |   |
| Deferred expenses, net of accumulated amortization of $11,400at March 31, 2008and$10,820at December 31, 2007                                     |                                      | 7,348     |                                         |   |   | 8,149 |   |
| Condominium development project                                                                                                                  |                                      | 1,913     |                                         |   |   | 1,913 |   |
| Other assets                                                                                                                                     |                                      | 30,053    |                                         |   |   | 36,117 |   |
| Total assets                                                                                                                                     | $2,672,453                                |      |                                         | $ | 2,683,835 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| **LIABILITIES****AND****PARTNERS’ CAPITAL**                                                                                                                         |                                      |      |                                         |   |   |   |   |
| Debt, net of discount of $1,948at March 31, 2008and $2,082at                    December 31, 2007                                                | $                                         | 1,498,800 |                                         |   | $ | 1,475,607 |   |
| Distributions payable                                                                                                                            |                                      | 30,662    |                                         |   |   | 30,493 |   |
| Accrued expenses and other liabilities                                                                                                           |                                      | 145,083   |                                         |   |   | 134,159 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Total liabilities                                                                                                                                |                                      | 1,674,545 |                                         |   |   | 1,640,259 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Commitments and contingencies                                                                                                                                             |                                      |      |                                         |   |   |   |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Redeemable units at redemption value,1,354units issued andoutstanding at March 31, 2008and December 31, 2007                                |                                      | 16,289    |                                         |   |   | 21,109 |   |
| Minority interest in other partnerships                                                                                                          |                                           |      | 24,872                                       |   |   |   | 25,264 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Partners’ capital:                                                                                                                                                  |                                           |      |                                         |   |   |   |   |   |
| Preferredunits, $.01 par value, 20,000unitsauthorized:                                                                                                                    |                                      |      |                                         |   |   |   |   |   |
| Series A Cumulative Convertible PreferredUnits, 12,880units                    issued and outstanding at March 31,2008and December 31, 2007      |                                      | 309,362   |                                         |   |   | 309,362 |   |
| Series C Cumulative Redeemable PreferredUnits, 68units issued                    and outstanding at March 31,2008and December 31, 2007           |                                      | 169,412   |                                         |   |   | 169,412 |   |
| Commonunits,69,413units issued and outstandingatMarch 31,2008and December 31, 2007                                                     |                                      | 452,253   |                                         |   |   | 490,979 |   |
| Accumulated other comprehensive income                                                                                                           |                                      | 25,720    |                                         |   |   | 27,450 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Totalpartners’ capital                                                                                                                     |                                      | 956,747   |                                         |   |   | 997,203 |   |
|                                                                                                                                                                      |                                      |      |                                         |   |   |   |   |
| Total liabilities, redeemable unitsandpartners’ capital                                                                                    | $                                         | 2,672,453 |                                         |   | $ | 2,683,835 |   |

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

3

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**FELCOR LODGING****LIMITED PARTNERSHIP**

**CONSOLIDATED STATEMENTS OF OPERATIONS        For the Three Months Ended****March 31****,****200****8****and 200****7****(unaudited****, in thousands, except for per unit****data)**

|                                                                                                                                                 | **Three Months Ended** |
|------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                                                                 | **March 31,**          |
|                                                                                                                                                 | **200****8**           |   | **200****7** |
| Revenues:                                                                                                                                            |                   |   |   |   |   |   |   |
| Hotel operating revenue                                                                                                     | $                      |  | 291,547 |   |   | $ | 248,541 |   |
| Other revenue                                                                                                               |                   | 328 |   |   |   | 131 |   |
| Total revenues                                                                                                              |                   | 291,875 |   |   |   | 248,672 |   |
|                                                                                                                                                 |                   |   |   |   |   |   |   |
| Expenses:                                                                                                                                            |                   |   |   |   |   |   |   |
| Hotel departmental expenses                                                                                                 |                   | 97,126 |   |   |   | 78,265 |   |
| Other property related costs                                                                                                |                   | 77,125 |   |   |   | 68,557 |   |
| Management and franchise fees                                                                                               |                   | 15,902 |   |   |   | 13,123 |   |
| Taxes, insurance and lease expense                                                                                          |                   | 29,304 |   |   |   | 29,229 |   |
| Corporate expenses                                                                                                          |                   | 6,827 |   |   |   | 6,787 |   |
| Depreciationand amortization                                                                                                |                   | 33,768 |   |   |   | 25,051 |   |
| Impairment loss                                                                                                             |                   | 17,131 |   |   |   | -    |   |
| Other expenses                                                                                                              |                   | 933 |   |   |   | 22 |   |
| Total operating expenses                                                                                                    |                   | 278,116 |   |   |   | 221,034 |   |
|                                                                                                                                                 |                   |   |   |   |   |   |   |
| Operating income                                                                                                            |                   | 13,759 |   |   |   | 27,638 |   |
| Interest expense, net                                                                                                       |                   | (26,003 | ) |   |   | (22,872 | ) |
| Income(loss )before equity in income from unconsolidated entities,

minority interests and gain on sale ofcondominiums      |                   | (12,244 | ) |   |   | 4,766 |   |
| Equity in income(loss)from unconsolidated entities                                                                          |                   | (622 | ) |   |   | 12,771 |   |
| Gain on sale ofcondominiums                                                                                                 |                   | -    |   |   |   | 3,281 |   |
| Minority interests                                                                                                          |                   | (71 | ) |   |   | 282 |   |
| Income(loss)from continuing operations                                                                                      |                   | (12,937 | ) |   |   | 21,100 |   |
| Discontinued operations                                                                                                     |                   | (13 | ) |   |   | 8,488 |   |
| Net income(loss)                                                                                                            |                   | (12,950 | ) |   |   | 29,588 |   |
| Preferred distributions                                                                                                     |                   | (9,678 | ) |   |   | (9,678 | ) |
| Net income(loss)applicable to commonunitholders                                                                             | $                      | (22,628 | ) |   | $ | 19,910 |   |
|                                                                                                                                                 |                   |   |   |   |   |   |   |
| Basicand dilutedcommonunitdata:                                                                                                                      |                   |   |   |   |   |   |   |
| Income (loss) from continuing operations                                                                                    | $                      | (0.36 | ) |   | $ | 0.18 |   |
| Net income(loss)                                                                                                            | $                      | (0.36 | ) |   | $ | 0.32 |   |
| Basic weighted average commonunits outstanding                                                                              |                   | 63,068 |   |   |   | 62,729 |   |
| Diluted weighted average commonunits outstanding                                                                            |                   | 63,068 |   |   |   | 63,117 |   |
| Cash distributions declared on commonunits                                                                                  | $                      | 0.35 |   |   | $ | 0.25 |   |

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

4

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**FELCOR LODGING****LIMITED PARTNERSHIP**

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE****INCOME****(LOSS)****For the Three****Months Ended****March 31****,****200****8****and 200****7****(unaudited, in thousands)                  **

|                                                                  | **Three Months Ended                    March 31,** |
|-----------------------------------------------------------------------|-----------------------------------------------------|
|                                                                  | **200****8**                                        |   | **200****7** |
| Net income(loss)                             | $                                                   | (12,950 | ) |   | $ | 29,588 |   |
| Foreign currency translation adjustment      |                                                | (1,730 | ) |   |   | 333 |   |
| Comprehensive income(loss)                   | $                                                   |  | (14,680 | ) |   | $ | 29,921 |   |

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

5

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**FELCOR LODGING****LIMTED PARTNERSHIP****CONSOLIDATED STATEMENTS OF CASH FLOWS        For the****Three****Months Ended****March 31, 200****8****and 200****7****(unaudited, in thousands)**

|                                                                                                                  | **Three****Months Ended****March 31****,** |
|-----------------------------------------------------------------------------------------------------------------------|--------------------------------------------|
|                                                                                                                  | **200****8**                               |   | **200****7** |
| Cash flows from operating activities:                                                                                 |                                       |   |   |   |   |   |   |
| Net income (loss)                                                                            | $                                          | (12,950 | ) |   | $ | 29,588 |   |
| Adjustments to reconcile net income (loss) to net cash provided by (used in)                    operating activities: |                                       |   |   |   |   |   |   |
| Depreciation and amortization                                                                |                                       | 33,768 |   |   |   | 25,051 |   |
| Gain on sale of assets                                                                       |                                       | -    |   |   |   | (9,312 | ) |
| Amortization of deferred financing fees and debt discount                                    |                                       | 718 |   |   |   | 667 |   |
| Amortization of unearned officers’ and directors’ compensation                   |                                       | 1,265 |   |   |   | 1,407 |   |
| Equity in loss (income) from unconsolidated entities                                         |                                       | 622 |   |   |   | (12,771 | ) |
| Distributions of income from unconsolidated entities                                         |                                       | 819 |   |   |   | 100 |   |
| Charges related to early debt extinguishment                                                 |                                       | -    |   |   |   | 901 |   |
| Impairment loss on hotels                                                                    |                                       | 17,131 |   |   |   | -    |   |
| Minority interests                                                                           |                                       | 71 |   |   |   | (46 | ) |
| Changes in assets and liabilities:                                                                                    |                                       |   |   |   |   |   |   |
| Accounts receivable                                                                          |                                       | (11,863 | ) |   |   | (8,829 | ) |
| Restricted cash – operations                                                           |                                       | (1,697 | ) |   |   | 1,447 |   |
| Other assets                                                                                 |                                       | 3,170 |   |   |   | 4,139 |   |
| Accrued expenses and other liabilities                                                       |                                       | 16,428 |   |   |   | 7,858 |   |
| Net cash flow provided by operating activities                                               |                                       | 47,482 |   |   |   | 40,200 |   |
|                                                                                                                  |                                       |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                                 |                                       |   |   |   |   |   |   |
| Improvements and additions to hotels                                                         |                                       | (42,374 | ) |   |   | (69,102 | ) |
| Additions to condominium project                                                             |                                       | -    |   |   |   | (5,629 | ) |
| Proceeds from sale of assets                                                                 |                                       | -    |   |   |   | 41,988 |   |
| Decrease in restricted cash – investing                                                |                                       | 424 |   |   |   | 3,827 |   |
| Deposit on asset sale                                                                        |                                       | -    |   |   |   | 1,000 |   |
| Redemption of investment securities                                                          |                                       | 2,525 |   |   |   | -    |   |
| Cash distributions from unconsolidated entities                                              |                                       | 21,458 |   |   |   | 8,562 |   |
| Capital contribution to unconsolidated entities                                              |                                       | (5,995 | ) |   |   | -    |   |
| Net cash flow used in investing activities                                                   |                                       | (23,962 | ) |   |   | (19,354 | ) |
|                                                                                                                  |                                       |   |   |   |   |   |   |
| Cash flows from financing activities:                                                                                 |                                       |   |   |   |   |   |   |
| Proceeds from borrowings                                                                     |                                       | 40,000 |   |   |   | 5,119 |   |
| Repayment of borrowings                                                                      |                                       | (16,942 | ) |   |   | (10,645 | ) |
| Payment of deferred financing fees                                                           |                                       | -    |   |   |   | (155 | ) |
| Exercise of FelCor stock options                                                             |                                       | -    |   |   |   | 1,836 |   |
| Distributions paid to other partnerships’ minority holders                             |                                       | (1,000 | ) |   |   | -    |   |
| Contributions from minority interest holders                                                 |                                       | 537 |   |   |   | 802 |   |
| Distributions paid to preferred unitholders                                                  |                                       | (9,678 | ) |   |   | (9,678 | ) |
| Distributions paid to common unitholders                                                     |                                       | (22,418 | ) |   |   | (15,869 | ) |
| Net cash flow used in financing activities                                                   |                                       | (9,501 | ) |   |   | (28,590 | ) |
|                                                                                                                  |                                       |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                      |                                       | (303 | ) |   |   | 92 |   |
| Net change in cash and cash equivalents                                                      |                                       | 13,716 |   |   |   | (7,652 | ) |
| Cash and cash equivalents at beginning of periods                                            |                                       | 57,609 |   |   |   | 124,179 |   |
| Cash and cash equivalents at end of periods                                                  | $                                          | 71,325 |   |   | $ | 116,527 |   |
|                                                                                                                  |                                       |   |   |   |   |   |   |
| Supplemental cash flow information — interest paid                                     | $                                          | 17,061 |   |   | $ | 14,761 |   |

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

6

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.      Organization**

At March 31, 2008, we held ownership interests in89 hotels and werethelargestowner ofupper-upscale, all-suite hotels.Oursole general partneris FelCor Lodging Trust Incorporated, or FelCor, a real estate investment trust, or REIT. At March 31, 2008, FelCor ownedagreater than 97%interest in our operations.

Of the 89 hotels in which we had an ownership interest atMarch 31, 2008, we owned a 100% interest in 66 hotels, a 90% or greater interest in entities owning four hotels, a 75% interest in an entity owning one hotel, a 60% interest in an entity owning one hotel and a 50% interest in entities owning 17        hotels.

As a result of our ownershipinterests in the operating lessees of 85 of these hotels(Consolidated Hotels), we reflect their operating revenues and expenses in our consolidated statements of operations. The operating revenues and expenses of the remaining four hotels were        not consolidated butwerereported on the equity method;three of these hotels were operated by 50% owned lessees,and one hotel, in which we had a 50% ownership interest, was operated without a lease.

AtMarch 31, 2008, we had an aggregate of64,548,920redeemable and commonunits outstanding.

                  The following table reflects the distribution, by brand, ofourConsolidatedHotels atMarch 31, 2008:

| **Brand**                                                                | **Hotels** |  **Rooms** |        |
|--------------------------------------------------------------------------|------------|-----------------|--------|
| Embassy Suites Hotels®                      |       | 47              |   |   | 12,129 |  |
| Holiday Inn®                                |       | 17              |   |   | 6,305 |  |
| Sheraton®andWestin®                     |       | 9               |   |   | 3,217 |  |
| Doubletree®                                 |       | 7               |   |   | 1,471 |  |
| Renaissance®and Hotel 480 Union Square      |       | 3               |   |   | 1,324 |  |
| Hilton®                                     |       | 2               |   |   | 559 |  |
| Total hotels                                    |       | 85              |   |   |   |

     The hotels shown in the above table are located in the United States(23states) and Canada (two hotelsin Ontario), with concentrations in California (15hotels), Florida (14hotels) andTexas (11 hotels).Approximately49% of our hotel room revenuesin continuing operationsduring the first three months of 2008were generated from        hotels in these states.

     AtMarch 31, 2008, ofourConsolidatedHotels, (i) subsidiaries of Hilton Hotels Corporation managed54,(ii)subsidiaries of InterContinental Hotels GroupPLC, or IHG, managed17,(iii) subsidiaries of Starwood Hotels & Resorts Worldwide, Inc.managednine,(iv)subsidiaries of Marriott International Inc.managed three hotels,and(v) independent management companiesmanagedtwo.

     We entered into management agreements for our three Marriott-managed hotels in December 2007. Hotels managed by Marriott are accounted for on a fiscal year comprised of 52 or 53weeksending on the Friday closest to December 31.Our fiscal quarter ended March 31, 2008, includes the results of operations for our Marriott-managed hotels through thetwelve-week period ended March 21, 2008.

7

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.      Organization****– (continued)**

**          **The informationin our consolidated financial statementsfor the three months endedMarch 31, 2008and2007is unaudited.Preparingfinancial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual        results could differ from those estimates. The accompanying financial statements for the threemonths endedMarch 31, 2008and 2007, include adjustments based on management’s estimates (consisting of normal and recurring accruals), which we consider necessary for a fair presentation of the results for the periods. The financial information should be read in        conjunction with the consolidated financial statements forthe year ended December 31, 2007, included in ourAnnualReport on

Form 10-K. Operating results for the threemonths endedMarch 31, 2008are not necessarily indicative ofactual operatingresults for the entire year.

**2****.           Investment in Unconsolidated Entities**

**     **We owned 50% interests in joint venture entities that owned17hotels atMarch 31, 2008andatDecember 31, 2007. We also owned a 50% interest injoint ventureentitiesthat ownreal estatein Myrtle Beach, South Carolina,providecondominium management servicesand leasethree hotels. We account for our investments in these unconsolidated entities under the equity method. We do not have any majority-owned subsidiaries that are not consolidated in our financial statements. We make adjustments to our equity in income from unconsolidated entities related to thedepreciation ofourexcessbasis in investment in unconsolidatedentities whencompared to the historical basis of the assets recorded by the joint ventures.

Summarized combined financial information for100% ofthese unconsolidated entitiesis as follows(in thousands):

|                                                                                | **March 31,                    200****8** |    | **December 31,****200****7** |
|-------------------------------------------------------------------------------------|-------------------------------------------|---------|-----------------------------------|
| Balance sheet information:                                                          |                                      |    |                              |   |   |
| Investment in hotels, net of accumulated depreciation      | $                                         | 295,993 |                              | $ | 288,066 |
| Total assets                                               | $                                         | 327,346 |                              | $ | 319,295 |
| Debt                                                       | $                                         | 227,873 |                              | $ | 188,356 |
| Total liabilities                                          | $                                         | 236,806 |                              | $ | 196,382 |
| Equity                                                     | $                                         | 90,540  |                              | $ | 122,913 |

Debt of our unconsolidated entitiesat March 31, 2008 and December 31, 2007,consistedentirelyof non-recourse mortgage debt.

8

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**2****.****          Investment in Unconsolidated Entities****– (continued)**

     The following table sets forth summarizedcombined statement of operations information for our unconsolidated entities (in thousands):

|                                                                              | **Three Months Ended                    March 31,** |
|-----------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                              | **200****8**                                        |   | **200****7** |
| Total revenues                                           | $                                                   | 18,943 |   |   | $ | 21,879 |   |
| Net income(loss)                                         | $                                                   | (178 | ) |   | $ | 19,754 |   |
|                                                                              |                                                |   |   |   |   |   |   |
| Net income(loss)attributable to FelCorLP                 | $                                                   | (155 | ) |   | $ | 9,877 |   |
| Additional gain on sale related to basis difference      |                                                | -    |   |   |   | 3,336 |   |
| Depreciation of cost in excess of book value             |                                                | (467 | ) |   |   | (442 | ) |
| Equity in income(loss)from unconsolidated entities       | $                                                   | (622 | ) |   | $ | 12,771 |   |

     The following table summarizesthe components of our investment in unconsolidated entities (in thousands):

|                                                                            | **March 31,**

**200****8** |         | **December****31,**

**200****7** |
|---------------------------------------------------------------------------------|-----------------------------|---------|-----------------------------------|
| Hotelrelatedinvestments                                | $                           | 36,709  |                              |   | $ | 52,491 |   |
| Cost in excess of book value of hotel investments      |                        | 62,279  |                              |   |   | 62,746 |   |
| Land and condominium investments                       |                        | 11,381  |                              |   |   | 12,036 |   |
|                                                                            | $                           | 110,369 |                              |   | $ | 127,273 |   |

     A summary ofthe components of ourequityinincome(loss)fromunconsolidated entitiesare as follows(in thousands):

|                                                                             | **Three Months Ended March 31,** |
|----------------------------------------------------------------------------------|----------------------------------|
|                                                                             |                             | **200****8** |   |   |   | **200****7** |   |
| Hotelrelatedinvestments                                 | $                                | 33 |   |   | $ | 13,336 |   |
| Other investments                                       |                             | (655 | ) |   |   | (565 | ) |
| Equity in income(loss)from unconsolidated entities      | $                                | (622 | ) |   | $ | 12,771 |   |

**     **In the first quarter of 2007,a 50% owned joint venture sold the Embassy Suites Hotel inCovina, California. The sale of this hotel resulted in a gain of $15.6 million for this        venture.Our basis in this unconsolidated hotel was lower than the venture’s basis, resulting in additional gain on sale.

     In January 2008,a 50% owned joint venture refinancednon-recourse mortgage debt secured by eight unconsolidated hotelsthatwasmaturing.Of the$140 millionin gross proceeds, $87 millionwere used to repay the maturingdebt,and the balance waseither retained in the venture ordistributed to the joint venture partners.We received $19.0 million from this distribution.

     In January 2008,a 50% owned joint venturerepaid in fullwith distributions from the partners,non-recourse mortgage debt of $12.0 million secured by one        hotelthatwasmaturing.Ourcontribution was $6.0 million.

9

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**3****.     Debt**

DebtatMarch 31, 2008andDecember 31, 2007consistedofthe following (in        thousands):

 

|                                          |           |                 |               | **Balance Outstanding** |
|------------------------------------------|----------------|----------------------|--------------------|-------------------------|
|                                     | **Encumbered** | **Interest Rate at** | **Maturity**       | **March 31,**           | **December 31,** |
|                                     | **Hotels**     |                 | **March 31, 2008** |                    |   | **Date** |   |   | **2008** |   |   | **2007** |   |
| Line of credit(a)                        | none           |                 | L + 0.80           |                    | August 2011 | $ | 30,000 |   | $ | -    |   |
| Senior term notes                        | none           |                 | 8.50(b)            |                    | June 2011 |   | 299,225 |   |   | 299,163 |   |
| Senior term notes                        | none           |                 | L + 1.875          |                    | December 2011 |   | 215,000 |   |   | 215,000 |   |
| Other                                    | none           |                 | L + 0.40           |                    | June 2008 |   | 4,799 |   |   | 8,350 |   |
| Total line of credit and

senior debt(c) |           |                 |  

6.62       |                    |   |   |  

549,024 |   |   |  

522,513 |   |
|                                     |           |                 |               |                    |   |   |   |   |   |   |   |
| Mortgage debt                            | 12 hotels      |                 | L + 0.93(d)        |                    | November 2008(e) |   | 250,000 |   |   | 250,000 |   |
| Mortgage debt                            | 7 hotels       |                 | 6.57               |                    | June 2009-2014 |   | 88,617 |   |   | 89,087 |   |
| Mortgage debt                            | 7 hotels       |                 | 7.32               |                    | March 2009 |   | 119,928 |   |   | 120,827 |   |
| Mortgage debt                            | 8 hotels       |                 | 8.70               |                    | May 2010 |   | 165,060 |   |   | 165,981 |   |
| Mortgage debt                            | 6 hotels       |                 | 8.73               |                    | May 2010 |   | 118,774 |   |   | 119,568 |   |
| Mortgage debt                            | 2 hotels       |                 | L + 1.55(f)        |                    | May 2009(g) |   | 176,052 |   |   | 175,980 |   |
| Mortgage debt                            | 1 hotel        |                 | L + 2.85           |                    | August 2008 |   | 15,500 |   |   | 15,500 |   |
| Mortgage debt                            | 1 hotel        |                 | 5.81               |                    | July 2016 |   | 12,417 |   |   | 12,509 |   |
| Other                                    | 1 hotel        |                 | 9.17               |                    | August 2011 |   | 3,428 |   |   | 3,642 |   |
| Total mortgage debt(c)                   | 45 hotels      |                 | 6.09               |                    |   |   | 949,776 |   |   | 953,094 |   |
|                                     |           |                 |               |                    |   |   |   |   |   |   |   |
| Total                                    |           |                 | 6.28               | %                       |   |   | $ | 1,498,800 |   | $ | 1,475,607 |   |
|                                          |                |                      |                    |                         |  |  |  |  |  |  |  |  |  |  |

|  | (a)      | We have a borrowing capacity of $250 millionunderour line of credit. The interestrateon this line can range from80 to 150basis pointsover LIBOR, based on our leverage ratio as defined in our line of credit agreement. |
|--|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b)      | If the credit rating on our senior debt is downgraded by Moody’s to B1 and Standard & Poor’s rating remains below BB-,the interest rate on these notes will increase to 9.0%. |
|--|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c)      | Interest rates are calculated based on the weighted average debt outstanding at March 31, 2008. |
|--|-----------------------------------|------------------------------------------------------------------------------------------------------|

|  | (d)      | We have purchased an interest rate cap for this notional amount with a cap rate of 7.8% that expires in November 2008. |
|--|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------------|

|  | (e)      | This loanprovides usthree one-year extension optionsthat permit, in our sole discretion,the maturity to be extended to 2011. |
|--|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------|

|  | (f)      | We have purchased interest rate caps for $177 million aggregate notional amounts with cap rates of 6.25% thatexpire in May 2009. |
|--|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | (g)      | These loans provide usthree one-year extension options that permit, in our sole discretion,the maturity to be extended to 2012. |
|--|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------|

     We reported interest expense of $26.0 million and$22.9 millionfor the three months endedMarch 31, 2008and 2007, respectively,thatis net of: (i) interest income of $0.6 million and $1.2 million,and (ii) capitalized interest of $0.4 million and $1.6 million, respectively.

     

10

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**4****.     ****Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs**

     The first quarter of 2008 was our first complete quarter to include results of operations from the two hotels (the Renaissance Esmeralda Resort & Spa in Indian Wells, California, andthe Renaissance Vinoy Resort & Golf Club inSt. Petersburg, Florida)acquired in December 2007. As such, we experienced increases in most of our revenue and expenses within continuing operations compared to the same period in 2007.

     The following table summarizes the components of hotel operating revenue from continuing operations (in thousands):

|                                                        | **Three Months Ended March 31,** |
|-------------------------------------------------------------|----------------------------------|
|                                                        |                             | **200****8** |   |   |   | **200****7** |   |
| Room revenue                       | $                                | 230,132 |   |   | $ | 204,323 |   |
| Food and beverage revenue          |                             | 46,508 |   |   |   | 31,773 |   |
| Other operating departments        |                             | 14,907 |   |   |   | 12,445 |   |
| Total hotel operating revenue      | $                                | 291,547 |   |   | $ | 248,541 |   |

Forbothofthethreemonthperiodsended March 31,2008and 2007,more than99% of our revenue was comprised of hotel operating revenue, which included room revenue, food and beverage revenue, and revenue from other hotel operating departments (such as telephone, parking and business centers). These revenues are recorded net of any sales or occupancy taxes collected from our guests. All        rebates or discounts are recorded, when allowed, as a reduction in revenue, and there are no material contingent obligations with respect to rebates or discounts offered by us. All revenues are recorded on an accrual basis, as earned. Appropriate allowances are made for doubtful accounts, whichare recorded as a bad debt expense. The remainderof our revenue wasderivedfrom other sources.

The following table summarizes the components of hotel departmental expenses from continuing operations(in thousands):

|                                                            | **Three****Months Ended****March 31****,** |
|-----------------------------------------------------------------|--------------------------------------------|
|                                                            | **200****8**                               |   | **200****7** |
|                                                            |  

 

 

**Amount**         |   | **% of Total Hotel                    Operating Revenue** |   |  

 

 

**Amount** |   | **% of Total Hotel**

**Operating Revenue** |
| Room                                   | $                                          | 54,651 |   |   | 18.7 | % |   |   | $ | 48,783 |   |   | 19.6 | % |   |
| Food and beverage                      |                                       | 35,446 |   |   | 12.2 |   |   |   |   | 24,535 |   |   | 9.9 |   |   |
| Other operating departments            |                                       | 7,029 |   |   | 2.4 |   |   |   |   | 4,947 |   |   | 2.0 |   |   |
| Total hotel departmental expenses      | $                                          | 97,126 |   |   | 33.3 | % |   |   | $ | 78,265 |   |   | 31.5 | % |   |

11

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**4****.     ****Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs****– (continued)**

The following table summarizes the components of otherproperty operating costs from continuing operations(in thousands):

|                                                                   | **Three****Months Ended****March 31****,** |
|------------------------------------------------------------------------|--------------------------------------------|
|                                                                   | **200****8**                               |   | **200****7** |
|                                                                   |  

 

 

**Amount**         |   | **% of Total Hotel                    Operating Revenue** |   |  

 

 

**Amount** |   | **% of Total Hotel                    Operating Revenue** |
| Hotel general and administrative expense      | $                                          | 25,261 |   |   | 8.7 | % |   |   | $ | 22,439 |   |   | 9.0 | % |   |
| Marketing                                     |                                       | 23,938 |   |   | 8.2 |   |   |   |   | 20,737 |   |   | 8.3 |   |   |
| Repair and maintenance                        |                                       | 14,761 |   |   | 5.1 |   |   |   |   | 13,553 |   |   | 5.5 |   |   |
| Utilities                                     |                                       | 13,165 |   |   | 4.5 |   |   |   |   | 11,828 |   |   | 4.8 |   |   |
| Totalother property operating costs           | $                                          | 77,125 |   |   | 26.5 | % |   |   | $ | 68,557 |   |   | 27.6 | % |   |

     Hotel departmental expenses and other property operating costsincludehotel employeecompensation and benefit expenses of $84.6 millionand$71.4 millionfor the three months endedMarch 31, 2008and2007,respectively.

**5****.     Taxes, Insurance and Lease Expense**

     Taxes, insurance and lease expense from continuing operationswere comprised of the following(in thousands):

|                                                                                    | **Three Months Ended March 31,** |
|-----------------------------------------------------------------------------------------|----------------------------------|
|                                                                                    |                             | **200****8** |   |   |   | **200****7** |   |
| Operating lease expense(a)                                     | $                                | 14,836 |   |   | $ | 16,164 |   |
| Real estate and other taxes                                    |                             | 10,874 |   |   |   | 8,601 |   |
| Property insurance, general liability insurance and other      |                             | 3,594 |   |   |   | 4,464 |   |
| Total taxes, insurance and lease expense                       | $                                | 29,304 |   |   | $ | 29,229 |   |

|  | (a)      | Includeshotellease expenseof $12.2 million and $14.3 millionassociatedwith 13 hotels leased by us                    from unconsolidated subsidiariesand $2.6 million and $1.9 million of ground lease expensefor the three months endedMarch 31, 2008and 2007, respectively.Included in operating lease expenseispercentage rent based on operating resultsof$6.8 million and $7.9 million, respectively,for the three months endedMarch 31, 2008and 2007. |
|--|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**6.     Impairment Charge         **

Our hotels are comprised of operations and cash flows that can clearly be distinguished, operationally and for financial reporting purposes, from the remainder of our operations. Accordingly, we consider our hotels to be components as defined by SFASNo.144 for        purposes of determining impairment charges and reporting discontinued operations.

12

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**6.     ****Impairment Charge****– (continued)**

In thefirstquarter of 2008, weidentifiedsixhotels ascandidates to be sold. Because of our shorter remaining estimated hold        period on these hotels,wetestedthemunder the provisions of SFAS No. 144using undiscounted estimated cash flows over the expected remaining hold period. Of the hotels tested,twohotelsfailed the test under SFAS No. 144, whichresulted in an impairment charge of $17.1 million to write down thesehotel assetsto our current estimate oftheirfair market valuebefore selling        expenses.

     The six hotelsare included in continuing operations, because we do not believe it is probable that the hotels will be sold within the next 12 months.These hotels continue to be depreciated over their remaining useful lives.

     We may be subject to additional impairment charges in the event that operating results of individual hotels are materially different from our forecasts, the economy and lodging industryweakens, or if we shorten our contemplated holding period foradditionalhotels.

**7****.     Condominium Project**

We completed development of our 184-unit Royale Palms condominium project in Myrtle Beach, South Carolina in 2007. Inthe first quarter of 2007,we recognized a gain on sale of condominiums of $3.3 million, under the completed contract method,and for full year2007,we recognized $18.6 millionof gains, net of $1.0 million of tax.At March 31, 2008, we hadfiveremainingcondominium unitsthatwe expect to sellon a selective basis to maximize the selling price.

**8****.     Discontinued Operations**

Results of operationsofelevenhotelssold in 2007are included in discontinued operations.The following table summarizes the condensed financial information for those hotels (in thousands):

|                                                                   | **Three Months Ended**

**March 31,** |
|------------------------------------------------------------------------|---------------------------------------|
|                                                                   | **2008**                              |   | **2007** |
| Hotel operating revenue                       | $                                     | -    |   |   | $ | 15,498 |   |
| Operating expenses                            |                                  | (13 | ) |   |   | (11,879 | ) |
| Operating income(loss)                        |                                  | (13 | ) |   |   | 3,619 |   |
| Direct interest costs, net                    |                                  | -    |   |   |   | (25 | ) |
| Loss onthe earlyextinguishment of debt        |                                  | -    |   |   |   | (901 | ) |
| Gain on sale                                  |                                  | -    |   |   |   | 6,031 |   |
| Minority interests                            |                                  | -    |   |   |   | (236 | ) |
| Income(loss)from discontinued operations      | $                                     | (13 | ) |   |   | 8,488 |   |

     In the first quarter 2007, we sold two consolidated hotels for aggregate gross proceeds of $42.7 million and one unconsolidated hotel for gross proceeds of $22.0 million. The operations of the unconsolidated hotel are consolidated because we owned more than 50% of the lessee.

     We include the operating results of hotels held for sale in discontinued operations.We consider a hotel as “held for sale” once wedetermine the criteria for this classification under the provisions of SAFSNo.144 hasbeen met.AtMarch 31, 2008,we did not have any hotels designated as held for sale.

13

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

|  | **9.     ** | **Earnings (****Loss****)****Per****Unit** |
|--|--------------------------------------|--------------------------------------------|

The following table sets forth the computation of basic and diluted earnings (loss) per unit (in thousands, except per unit data):

|                                                                                                   | **Three Months Ended                    March 31,** |
|--------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                                                   | **200****8**                                        |   | **200****7** |
| Numerator:                                                                                             |                                                |   |   |   |   |   |   |
| Income(loss)from continuing operations                                        | $                                                   | (12,937 | ) |   | $ | 21,100 |   |
| Less: Preferred distributions                                                 |                                                | (9,678 | ) |   |   | (9,678 | ) |
| Income (loss) from continuing operations applicable to commonunitholders      |                                                | (22,615 | ) |   |   | 11,422 |   |
| Discontinued operations                                                       |                                                | (13 | ) |   |   | 8,488 |   |
| Net income(loss)applicable to commonunitholders                               | $                                                   | (22,628 | ) |   | $ | 19,910 |   |
| Denominator:                                                                                           |                                                |   |   |   |   |   |   |
| Denominator for basic earnings(loss)perunit                                   |                                                | 63,068 |   |   |   | 62,729 |   |
| Denominator for diluted earnings(loss)perunit                                 |                                                | 63,068 |   |   |   | 63,117 |   |
|                                                                                                   |                                                |   |   |   |   |   |   |
| Earnings (loss) perunitdata:                                                                           |                                                |   |   |   |   |   |   |
| Basic:                                                                                                 |                                                |   |   |   |   |   |   |
| Income(loss) from continuing operations                                       | $                                                   | (0.36 | ) |   | $ | 0.18 |   |
| Discontinued operations                                                       | $                                                   | -    |   |   | $ | 0.14 |   |
| Net income(loss)                                                              | $                                                   | (0.36 | ) |   | $ | 0.32 |   |
|                                                                                                   |                                                |   |   |   |   |   |   |
| Diluted:                                                                                               |                                                |   |   |   |   |   |   |
| Income (loss) from continuing operations                                      | $                                                   | (0.36 | ) |   | $ | 0.18 |   |
| Discontinued operations                                                       | $                                                   | -    |   |   | $ | 0.14 |   |
| Net income (loss)                                                             | $                                                   | (0.36 | ) |   | $ | 0.32 |   |

     The following securities,whichcould potentially dilute basic earnings(loss)perunitin the        future,were not included in the computation of diluted earnings(loss)perunit, because they would have been antidilutive for the periods presented (in thousands):

|                                                                               | **Three Months Ended                    March 31,** |
|------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                               | **200****8**                                        |   | **200****7** |
| FelCor’s restrictedstockgranted but not vested      |                                                | 126 |   |   |   | -    |   |
| Series A convertible preferredunits                       |                                                | 9,985 |   |   |   | 9,985 |   |

     Series A preferreddistributionsthat would be excluded from netincome(loss)applicable to commonunitholders, if these Series A preferredunitswere dilutive, were $6.3 million forboththe three months endedMarch 31, 2008and 2007.

14

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**10****.     Application of New Accounting Standards**

     In September 2006, the FASB issued Statement No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the        asset or liability. SFAS 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS 157 applies whenever other standards require assets or liabilities to be measured at fair value. SFAS 157 also provides for certain disclosure requirements, including, but not limited to, the valuation techniques used to measure fair value and a discussion of changes in valuation techniques, if any, during the        period.This statementwas effective for us on January 1, 2008, except for nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value on a recurring basis, for which the effective date is January 1, 2009. We do not believe that the adoption of this standard will have a material effect on our financial position and results of operations.

     In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis, that are        otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded        to beginning retained earnings. This statementwas effective for us on January 1, 2008. Wedid not make the one-time election upon adoption and thereforedo not believe that the adoption of this standard will have a material effect on our financial position and results of operations.

**11.     ****Consolidating Financial Information**

Certain of our wholly-owned subsidiaries (FelCor/CSS Holdings, L.P.; FelCor Pennsylvania Company, L.L.C.; FelCor Lodging Holding Company, L.L.C.; Myrtle Beach Hotels, L.L.C.; FelCor TRS Borrower 1, L.P.; FelCor TRS Borrower 3, L.P.; FelCor TRS Borrower 4, L.L.C.; FelCor TRS Guarantor, L.P.; Center City Hotel Associates; FelCor Lodging Company, L.L.C.; FelCor TRS Holdings,        L.P.; FHAC Texas Holdings, L.P.; FelCor Omaha Hotel Company, L.L.C.; FelCor Canada Co.; FelCor/St. Paul Holdings, L.P. and FelCor Hotel Asset Company, L.L.C., collectively, “Subsidiary Guarantors”), together with FelCor, guarantee, fully and unconditionally, and jointly and severally, our senior debt. The following tables present consolidating information for the Subsidiary Guarantors.

15

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**11.     ****Consolidating Financial Information – (continued)**

**CONSOLIDATING BALANCE SHEET**

**March 31, 2008**

**(in thousands)         **

| **ASSETS**                                                                                                 |
|------------------------------------------------------------------------------------------------------------|
|                                                                                                       | **FelCor L.P.** |   | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |   | **Eliminations** |   | **Total Consolidated** |   |
| Net investment in hotel properties                                                | $ | 120,851 |   |   | $ | 971,122 |   | $ | 1,292,543 |   |   | $ | -    |   |   | $ | 2,384,516 |   |
| Equity investment in consolidated entities                                        |   | 1,370,921 |   |   |   | -    |   |   | -    |   |   |   | (1,370,921 | ) |   |   | -    |   |
| Investment in unconsolidated entities                                             |   | 81,803 |   |   |   | 26,941 |   |   | 1,625 |   |   |   | -    |   |   |   | 110,369 |   |
| Cash and cash equivalents                                                         |   | 8,785 |   |   |   | 59,282 |   |   | 3,258 |   |   |   | -    |   |   |   | 71,325 |   |
| Restricted cash                                                                   |   | 267 |   |   |   | 3,925 |   |   | 11,927 |   |   |   | -    |   |   |   | 16,119 |   |
| Accounts receivable                                                               |   | 4,397 |   |   |   | 46,379 |   |   | 34 |   |   |   | -    |   |   |   | 50,810 |   |
| Deferredexpenses                                                                  |   | 3,393 |   |   |   | 270 |   |   | 3,685 |   |   |   | -    |   |   |   | 7,348 |   |
| Condominium development project                                                   |   | -    |   |   |   | -    |   |   | 1,913 |   |   |   | -    |   |   |   | 1,913 |   |
| Other assets                                                                      |   | 8,005 |   |   |   | 21,012 |   |   | 1,036 |   |   |   | -    |   |   |   | 30,053 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                      | $ | 1,598,422 |   |   | $ | 1,128,931 |   | $ | 1,316,021 |   |   | $ | (1,370,921 | ) |   | $ | 2,672,453 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITES AND PARTNERS’CAPITAL**                                                                  |
| Debt                                                                              | $ | 564,524 |   |   | $ | 123,357 |   | $ | 810,919 |   |   | $ | -    |   |   | $ | 1,498,800 |   |
| Distributions payable                                                             |   | 30,662 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 30,662 |   |
| Accrued expenses and other liabilities                                            |   | 30,200 |   |   |   | 104,145 |   |   | 10,738 |   |   |   | -    |   |   |   | 145,083 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                 |   | 625,386 |   |   |   | 227,502 |   |   | 821,657 |   |   |   | -    |   |   |   | 1,674,545 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redeemable units, at redemption value                                             |   | 16,289 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 16,289 |   |
| Minority interest – other partnerships                                      |   | -    |   |   |   | 339 |   |   | 24,533 |   |   |   | -    |   |   |   | 24,872 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred units                                                                   |   | 478,774 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 478,774 |   |
| Common units                                                                      |   | 477,973 |   |   |   | 875,370 |   |   | 469,831 |   |   |   | (1,370,921 | ) |   |   | 452,253 |   |
| Accumulated other comprehensive income                                            |   | -    |   |   |   | 25,720 |   |   | -    |   |   |   | -    |   |   |   | 25,720 |   |
| Total partners’ capital                                                     |   | 956,747 |   |   |   | 901,090 |   |   | 469,831 |   |   |   | (1,370,921 | ) |   |   | 956,747 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities, redeemable units                    and partners' capital      | $ | 1,598,422 |   |   | $ | 1,128,931 |   | $ | 1,316,021 |   |   | $ | (1,370,921 | ) |   | $ | 2,672,453 |   |

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**11****.     ****Consolidating Financial Information – (continued)**

**CONDENSED CONSOLIDATING BALANCE SHEET**

**December 31, 2007**

**(in thousands)**

| **ASSETS**                                                                                                 |
|------------------------------------------------------------------------------------------------------------|
|                                                                                                       | **FelCor L.P.** |   | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |   | **Eliminations** |   | **Total Consolidated** |   |
| Net investment in hotel properties                                                | $ | 122,225 |   |   | $ | 973,614 |   | $ | 1,304,218 |   |   | $ | -    |   |   | $ | 2,400,057 |   |
| Equity investment in consolidated entities                                        |   | 1,365,512 |   |   |   | -    |   |   | -    |   |   |   | (1,365,512 | ) |   |   | -   |   |
| Investment in unconsolidated entities                                             |   | 97,810 |   |   |   | 27,820 |   |   | 1,643 |   |   |   | -    |   |   |   | 127,273 |   |
| Cash and cash equivalents                                                         |   | 7,889 |   |   |   | 43,305 |   |   | 6,415 |   |   |   | -    |   |   |   | 57,609 |   |
| Restricted cash                                                                   |   | 364 |   |   |   | 3,790 |   |   | 10,692 |   |   |   | -    |   |   |   | 14,846 |   |
| Accounts receivable                                                               |   | 2,508 |   |   |   | 35,198 |   |   | 165 |   |   |   | -    |   |   |   | 37,871 |   |
| Deferredexpenses                                                                  |   | 3,839 |   |   |   | 344 |   |   | 3,966 |   |   |   | -    |   |   |   | 8,149 |   |
| Condominium development project                                                   |   | -    |   |   |   | -    |   |   | 1,913 |   |   |   | -    |   |   |   | 1,913 |   |
| Other assets                                                                      |   | 14,593 |   |   |   | 20,262 |   |   | 1,262 |   |   |   | -    |   |   |   | 36,117 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                      | $ | 1,614,740 |   |   | $ | 1,104,333 |   | $ | 1,330,274 |   |   | $ | (1,365,512 | ) |   | $ | 2,683,835 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITES AND PARTNERS’CAPITAL**                                                                  |
| Debt                                                                              | $ | 538,012 |   |   | $ | 124,469 |   | $ | 813,126 |   |   | $ | -    |   |   | $ | 1,475,607 |   |
| Distributions payable                                                             |   | 30,493 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 30,493 |   |
| Accrued expenses and other liabilities                                            |   | 27,923 |   |   |   | 91,880 |   |   | 14,356 |   |   |   | -    |   |   |   | 134,159 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                 |   | 596,428 |   |   |   | 216,349 |   |   | 827,482 |   |   |   | -    |   |   |   | 1,640,259 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Redeemable units, at redemption value                                             |   | 21,109 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 21,109 |   |
| Minority interest – other partnerships                                      |   | -    |   |   |   | 70 |   |   | 25,194 |   |   |   | -    |   |   |   | 25,264 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred units                                                                   |   | 478,774 |   |   |   | -    |   |   | -    |   |   |   | -    |   |   |   | 478,774 |   |
| Common units                                                                      |   | 518,429 |   |   |   | 860,464 |   |   | 477,598 |   |   |   | (1,365,512 | ) |   |   | 490,979 |   |
| Accumulated other comprehensive income                                            |   | -    |   |   |   | 27,450 |   |   | -    |   |   |   | -    |   |   |   | 27,450 |   |
| Total partners’ capital                                                     |   | 997,203 |   |   |   | 887,914 |   |   | 477,598 |   |   |   | (1,365,512 | ) |   |   | 997,203 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities, redeemable units                    and partners' capital      | $ | 1,614,740 |   |   | $ | 1,104,333 |   | $ | 1,330,274 |   |   | $ | (1,365,512 | ) |   | $ | 2,683,835 |   |

17

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**11****.     ****Consolidating****Financial Information****–****(continued)**

**CONDENSED****CONSOLIDATING STATEMENT OF OPERATIONS        For the****Three Months****Ended****March 31****, 200****8****(in thousands)         **

|                                                                                                                                    | **FelCor L.P.** |                | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |                | **Eliminations** |   | **Total Consolidated** |
|-----------------------------------------------------------------------------------------------------------------------------------------|-----------------|---------------------|---------------------------|--------|--------------------------------|---------------------|------------------|--------|------------------------|
| Revenues:                                                                                                                               |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Hotel operating revenue                                                                                        | $               | -    |                      |   | $                              | 291,547             |             |   | $                      | -    |   |   | $ | -    |   |   | $ | 291,547 |   |
| Percentage lease revenue                                                                                       |            | 6,054               |                      |   |                           | -    |             |   |                   | 52,372 |   |   |   | (58,426 | ) |   |   | -    |   |
| Other revenue                                                                                                  |            | -    |                      |   |                           | 4                   |             |   |                   | 324 |   |   |   | -    |   |   |   | 328 |   |
| Total revenue                                                                                                  |            | 6,054               |                      |   |                           | 291,551             |             |   |                   | 52,696 |   |   |   | (58,426 | ) |   |   | 291,875 |   |
|                                                                                                                                    |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                               |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Hotel operating expenses                                                                                       |            | -    |                      |   |                           | 190,153             |             |   |                   | -    |   |   |   | -    |   |   |   | 190,153 |   |
| Taxes, insurance and lease expense                                                                             |            | 1,355               |                      |   |                           | 78,888              |             |   |                   | 7,487 |   |   |   | (58,426 | ) |   |   | 29,304 |   |
| Corporate expenses                                                                                             |            | 308                 |                      |   |                           | 3,856               |             |   |                   | 2,663 |   |   |   | -    |   |   |   | 6,827 |   |
| Depreciationand amortization                                                                                   |            | 2,540               |                      |   |                           | 14,557              |             |   |                   | 16,671 |   |   |   | -    |   |   |   | 33,768 |   |
| Impairment loss                                                                                                |            | -    |                      |   |                           | -    |             |   |                   | 17,131 |   |   |   | -    |   |   |   | 17,131 |   |
| Other expenses                                                                                                 |            | -    |                      |   |                           | 265                 |             |   |                   | 668 |   |   |   | -    |   |   |   | 933 |   |
| Total operating expenses                                                                                       |            | 4,203               |                      |   |                           | 287,719             |             |   |                   | 44,620 |   |   |   | (58,426 | ) |   |   | 278,116 |   |
| Operating income                                                                                               |            | 1,851               |                      |   |                           | 3,832               |             |   |                   | 8,076 |   |   |   | -    |   |   |   | 13,759 |   |
| Interest expense, net                                                                                          |            | (9,885              | )                         |   |                           | (2,749              | )                |   |                   | (13,369 | ) |   |   | -    |   |   |   | (26,003 | ) |
| Income (loss) before equity in income                    fromunconsolidated entitiesandminorityinterests       |            | (8,034              | )                         |   |                           | 1,083               |             |   |                   | (5,293 | ) |   |   | -    |   |   |   | (12,244 | ) |
| Equity in income from consolidated entities                                                                    |            | (4,991              | )                         |   |                           | -    |             |   |                   | -    |   |   |   | 4,991 |   |   |   | -    |   |
| Equity in income(loss)from unconsolidatedentities                                                              |            | 75                  |                      |   |                           | (679                | )                |   |                   | (18 | ) |   |   | -    |   |   |   | (622 | ) |
| Minority interests                                                                                             |            | -    |                      |   |                           | 143                 |             |   |                   | (214 | ) |   |   | -    |   |   |   | (71 | ) |
| Income(loss)from continuing operations                                                                         |            | (12,950             | )                         |   |                           | 547                 |             |   |                   | (5,525 | ) |   |   | 4,991 |   |   |   | (12,937 | ) |
| Discontinued operations from consolidated                    entities                                          |            | -    |                      |   |                           | (13                 | )                |   |                   | -    |   |   |   | -    |   |   |   | (13 | ) |
| Net income(loss)                                                                                               |            | (12,950             | )                         |   |                           | 534                 |             |   |                   | (5,525 | ) |   |   | 4,991 |   |   |   | (12,950 | ) |
| Preferred distributions                                                                                        |            | (9,678              | )                         |   |                           | -    |             |   |                   | -    |   |   |   | -    |   |   |   | (9,678 | ) |
| Net income(loss)applicable to unitholders                                                                      | $               | (22,628             | )                         |   | $                              | 534                 |             |   |                   | (5,525 | ) |   | $ | 4,991 |   |   | $ | (22,628 | ) |

18

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1****1****.     Con****solidating Financial Information****–****(continued)**

**CONDENSED****CONSOLIDATING STATEMENT OF OPERATIONS        For the****Three Months Ended March 31****, 200****7****(in thousands)**

|                                                                                                                                                                                  | **FelCor L.P.** |                | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |                | **Eliminations** |   | **Total Consolidated** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|---------------------|---------------------------|--------|--------------------------------|---------------------|------------------|--------|------------------------|
| Revenues:                                                                                                                                                                             |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Hotel operating revenue                                                                                                                                      | $               | -    |                      |   | $                              | 248,541             |             |   | $                      | -    |   |   | $ | -    |   |   | $ | 248,541 |   |
| Percentage lease revenue                                                                                                                                     |            | 5,578               |                      |   |                           | -    |             |   |                   | 42,000 |   |   |   | (47,578 | ) |   |   | -    |   |
| Other revenue                                                                                                                                                |            | 115                 |                      |   |                           | -    |             |   |                   | 16 |   |   |   | -    |   |   |   | 131 |   |
| Total revenue                                                                                                                                                |            | 5,693               |                      |   |                           | 248,541             |             |   |                   | 42,016 |   |   |   | (47,578 | ) |   |   | 248,672 |   |
|                                                                                                                                                                                  |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                                                                             |            |                |                      |   |                           |                |             |   |                   |   |   |   |   |   |   |   |   |   |   |
| Hotel operating expenses                                                                                                                                     |            | -    |                      |   |                           | 159,945             |             |   |                   | -    |   |   |   | -    |   |   |   | 159,945 |   |
| Taxes, insurance and lease expense                                                                                                                           |            | 985                 |                      |   |                           | 70,458              |             |   |                   | 5,364 |   |   |   | (47,578 | ) |   |   | 29,229 |   |
| Other expenses                                                                                                                                               |            | -    |                      |   |                           | 22                  |             |   |                   | -    |   |   |   | -    |   |   |   | 22 |   |
| Corporate expenses                                                                                                                                           |            | 719                 |                      |   |                           | 3,793               |             |   |                   | 2,275 |   |   |   | -    |   |   |   | 6,787 |   |
| Depreciation                                                                                                                                                 |            | 2,083               |                      |   |                           | 12,079              |             |   |                   | 10,889 |   |   |   | -    |   |   |   | 25,051 |   |
| Total operating expenses                                                                                                                                     |            | 3,787               |                      |   |                           | 246,297             |             |   |                   | 18,528 |   |   |   | (47,578 | ) |   |   | 221,034 |   |
| Operating income                                                                                                                                             |            | 1,906               |                      |   |                           | 2,244               |             |   |                   | 23,488 |   |   |   | -    |   |   |   | 27,638 |   |
| Interest expense, net                                                                                                                                        |            | (6,013              | )                         |   |                           | (1,838              | )                |   |                   | (15,021 | ) |   |   | -    |   |   |   | (22,872 | ) |
| Income (loss) before equity in income                    from unconsolidated entities, minority                    interests and gain on sale of assets      |            | (4,107              | )                         |   |                           | 406                 |             |   |                   | 8,467 |   |   |   | -    |   |   |   | 4,766 |   |
| Equity in income from consolidated entities                                                                                                                  |            | 20,135              |                      |   |                           | -    |             |   |                   | -    |   |   |   | (20,135 | ) |   |   | -    |   |
| Equity in income from unconsolidated entities                                                                                                                |            | 13,442              |                      |   |                           | (653                | )                |   |                   | (18 | ) |   |   | -    |   |   |   | 12,771 |   |
| Minority interests                                                                                                                                           |            | -    |                      |   |                           | 592                 |             |   |                   | (310 | ) |   |   | -    |   |   |   | 282 |   |
| Gain onsale ofcondominiums                                                                                                                                   |            | -    |                      |   |                           | -    |             |   |                   | 3,281 |   |   |   | -    |   |   |   | 3,281 |   |
| Income from continuing operations                                                                                                                            |            | 29,470              |                      |   |                           | 345                 |             |   |                   | 11,420 |   |   |   | (20,135 | ) |   |   | 21,100 |   |
| Discontinued operations from consolidated                    entities                                                                                        |            | 118                 |                      |   |                           | 7,286               |             |   |                   | 1,084 |   |   |   | -    |   |   |   | 8,488 |   |
| Net income                                                                                                                                                   |            | 29,588              |                      |   |                           | 7,631               |             |   |                   | 12,504 |   |   |   | (20,135 | ) |   |   | 29,588 |   |
| Preferred distributions                                                                                                                                      |            | (9,678              | )                         |   |                           | -    |             |   |                   | -    |   |   |   | -    |   |   |   | (9,678 | ) |
| Net income applicable to unitholders                                                                                                                         | $               | 19,910              |                      |   | $                              | 7,631               |             |   | $                      | 12,504 |   |   | $ | (20,135 | ) |   | $ | 19,910 |   |

19

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**FELCOR LODGING LIMITED PARTNERSHIP                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1****1****.     ****Consolidating Financial Information****–****(continued)**

**CONDENSED****CONSOLIDATING STATEMENT OF CASH FLOWS**

**For the Three Months Ended March 31, 2008**

**(in thousands)**

|                                                                           | **FelCor L.P.** |                | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |    | **Total Consolidated** |
|--------------------------------------------------------------------------------|-----------------|---------------------|---------------------------|--------|--------------------------------|---------|------------------------|
| Cash flows from (used in) operating activities        | $               | (3,660              | )                         |   | $                              | 17,444  |                   |   | $ | 33,698 |   |   | $ | 47,482 |   |
| Cash flows from (used in) investing activities        |            | 22,843              |                      |   |                           | (25,460 | )                      |   |   | (21,345 | ) |   |   | (23,962 | ) |
| Cash flows from (used in) financing activities        |            | (18,287             | )                         |   |                           | 24,296  |                   |   |   | (15,510 | ) |   |   | (9,501 | ) |
| Effect of exchange rates changes on cash              |            | -    |                      |   |                           | (303    | )                      |   |   | -    |   |   |   | (303 | ) |
| Change in cash and cash equivalents                   |            | 896                 |                      |   |                           | 15,977  |                   |   |   | (3,157 | ) |   |   | 13,716 |   |
| Cash and cash equivalents at beginning of period      |            | 7,889               |                      |   |                           | 43,305  |                   |   |   | 6,415 |   |   |   | 57,609 |   |
| Cash and equivalents at end of period                 | $               | 8,785               |                      |   | $                              | 59,282  |                   |   | $ | 3,258 |   |   | $ | 71,325 |   |

**CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS        For the Three Months Ended March 31, 2007        (in thousands)**

|                                                                           | **FelCor L.P.** |                | **Subsidiary Guarantors** |   | **Non-Guarantor Subsidiaries** |    | **Total Consolidated** |
|--------------------------------------------------------------------------------|-----------------|---------------------|---------------------------|--------|--------------------------------|---------|------------------------|
| Cash flows from (used in) operating activities        | $               | (660                | )                         |   | $                              | 16,768  |                   |   | $ | 24,092 |   |   | $ | 40,200 |   |
| Cash flows from (used in) investing activities        |            | 770                 |                      |   |                           | 14,025  |                   |   |   | (34,149 | ) |   |   | (19,354 | ) |
| Cash flows from (used in) financing activities        |            | (12,520             | )                         |   |                           | (25,884 | )                      |   |   | 9,814 |   |   |   | (28,590 | ) |
| Effect of exchange rates changes on cash              |            | -    |                      |   |                           | 92      |                   |   |   | -    |   |   |   | 92 |   |
| Change in cash and cash equivalents                   |            | (12,410             | )                         |   |                           | 5,001   |                   |   |   | (243 | ) |   |   | (7,652 | ) |
| Cash and cash equivalents at beginning of period      |            | 69,728              |                      |   |                           | 46,966  |                   |   |   | 7,485 |   |   |   | 124,179 |   |
| Cash and equivalents at end of period                 | $               | 57,318              |                      |   | $                              | 51,967  |                   |   | $ | 7,242 |   |   | $ | 116,527 |   |

20

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**Item 2.****     ****Management’s Discussion and Analysis of Financial Condition and Results of Operations**

**General     **

     In December 2007, we acquired two Renaissance resort hotels. The acquisition of these hotels makesthe comparison of hotel operating results between the quartersended March 31, 2008 and March 31, 2007 difficult.As a result, we have utilized a same-store comparison when comparing earnings before interest, taxes, depreciation and amortization, or EBITDA, Hotel EBITDA, Hotel EBITDA margin and funds from operations, or FFO. These are all non-GAAP financial measures and detailed reconciliations to the most comparable GAAP measure are found elsewhere in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations. For purposes of        these same-store comparisons, we have adjusted the March 31, 2007 numbers toremove discontinuedoperations and gains on sale of condominium units, and added the historical results of operations of the two Renaissance hotels. We believe that this is helpful for the investor to better understand our current year operating results.

In 2006, we embarked on a $440 million renovation program at our 83 hotels (excluding the two hotels acquired in December 2007) designed to improve the quality, returns on investment and competitive position of these hotels.Wehavecompleted renovations at 75 of these hotels,and we currently expect to complete the remaining renovations by year-end 2008. In the first quarter of 2008, 19 hotels were undergoing renovation creating disruption at these hotels. Despite renovation-related disruptions at these 19 hotels, we experienced 4.6% growth in revenue per available room, or RevPAR, compared to first quarter 2007. Renovations at 61 hotels had        been completed for a full quarter at March 31, 2008. RevPAR at these hotels increased 7.9%, compared to the same period last year. Theseresults indicate thecontinuingpositive impact ofourrenovationprogram. We believe that our renovated hotels        will continue to perform better than the industry average.

Inthe first quarter of 2008, we identified six hotels ascandidates to be sold.Because of our shorter remaining estimated hold period on these hotels,we recorded impairment charges of $17.1 million        related to two of these hotels.This $17.1 million charge is reflected in our current year loss from continuing operations, Same-Store FFO and Same-Store EBITDA.

For the first quarter of 2008, we declared and paidcommon distributions of$0.35 perunit.

**Financial Comparison (in thousands of dollars, except RevPAR and****H****otel****EBITDA****margin)**

|                                                                    | **Three Months Ended March 31,** |
|-------------------------------------------------------------------------|----------------------------------|
|                                                                    | **200****8**                     |   | **200****7** |   | **% Change****200****8****-200****7** |
| RevPAR                                         | $                                | 101.55 |   |   | $ | 97.06 |   |   | 4.6 |   | % |
| Same-StoreHotel EBITDA(1)                      | $                                | 82,165 |   |   | $ | 78,428 |   |   | 4.8 |   | % |
| Same-StoreHotel EBITDA margin(1)               |                             | 28.2 | % |   |   | 28.4 | % |   | (0.7 | ) | % |
| Income(loss)from continuing operations(2)      | $                                | (12,937 | ) |   | $ | 21,100 |   |   | (161.3 | ) | % |
| Same-StoreFFO(1) (3)                           | $                                | 14,702 |   |   | $ | 27,446 |   |   | (46.4 | ) | % |
| Same-StoreEBITDA(1)(4)                         | $                                | 53,790 |   |   | $ | 79,309 |   |   | (32.2 | ) | % |

_____________

|  | (1)      | Adiscussionof the use, limitations and importanceof these non-GAAP financial measuresand detailed reconciliations to the most comparable GAAP measureare                    found elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
|--|-----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

21

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(2)     Includedinincome (loss) from continuing operations are the following amounts (in thousands):

|                                                                                            | **Three Months Ended**

**March 31,** |
|-------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                            | **2008**                              |   | **2007** |
| Impairment loss                                                        | $                                     | (17,131 | ) |   | $ | -    |   |
| Conversion costs                                                       |                                  | (259 | ) |   |   | -    |   |
| Gain on sale of unconsolidated hotels                                  |                                  | -    |   |   |   | 11,182 |   |
| Gain on sale of condominium                                            |                                  | -    |   |   |   | 3,281 |   |
| Abandoned projects                                                     |                                  | -    |   |   |   | (22 | ) |
| Charges related to debt extinguishment, net of minority interests      |                                  | -    |   |   |   | (811 | ) |

(3)     Same-StoreFFO hasnot been adjustedforthe following items included in netincome(loss)(in thousands):

|                                                                                            | **Three Months Ended**

**March 31,** |
|-------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                            | **200****8**                          |   | **200****7** |
| Impairment loss                                                        | $                                     | (17,131 | ) |   | $ | -    |   |
| Conversion costs                                                       |                                  | (259 | ) |   |   | -    |   |
| Abandoned projects                                                     |                                  | -    |   |   |   | (22 | ) |
| Charges related to debt extinguishment, net of minority interests      |                                  | -    |   |   |   | (811 | ) |

|  | (4)      | Same-StoreEBITDA has not been adjusted for the following amounts included in netincome(loss) |
|--|-----------------------------------|----------------------------------------------------------------------------------------------|

(in thousands):

|                                                                                                                          | **Three Months Ended**

**March 31,** |
|-------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                                                          | **200****8**                          |   | **200****7** |
| Impairment loss                                                                                      | $                                     | (17,131 | ) |   | $ | -    |   |
| Conversion costs                                                                                     |                                  | (259 | ) |   |   | -    |   |
| Gain on sale of hotels                                                                               |                                  | -    |   |   |   | 6,031 |   |
| Gain on sale of hotels in unconsolidated entities                                                    |                                  | -    |   |   |   | 11,182 |   |
| Abandoned projects                                                                                   |                                  | -    |   |   |   | (22 | ) |
| Charges related to debt extinguishment, net of minority interests           |                                  | -    |   |   |   | (811 | ) |

**Results of Operations**

*Comparison of the Three Months Ended**March 31, 200**8**and**200**7*

For the three months ended March 31, 2008, we recorded a net loss applicable to common unitholders of $22.6 million, or $0.36 per unit, compared to net income applicable to common unitholders of $19.9 million, or $0.32 per unit, for the same period in 2007. The current year loss includes a $17.1 million impairment charge on two hotels. The prior year net income includes (i)        gains from sale of hotels of $17.2 million ($6.0 million in discontinued operations and $11.2 million in equity in income from unconsolidated entities), (ii) $3.3 million gain on sale of condominiums, and (iii) $3.6 million of operating income from hotels sold in 2007 included in discontinued operations.

22

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We had a loss from continuing operations of $12.9 million in the first quarter of 2008, compared to income from continuing operations of $21.1 million for the same period in 2007. The decrease in income from continuing operations is principally attributed to: (i) a $17.1 million impairment charge in the first quarter of 2008; (ii) $11.2 million equity in income from        unconsolidated entities from the gain on sale of a hotel by one of our unconsolidated entities in the first quarter of 2007; and (iii) a $3.3 million gain from the sale of condominium units in first quarter of 2007.

The first quarter of 2008 wasourfirst complete quarter to includeresults ofoperations fromtwo hotels (theRenaissance Esmeralda Resort & Spa in Indian Wells, California, and the Renaissance Vinoy Resort & Golf Club in St. Petersburg, Florida)acquired in December 2007. As such, we experienced increasesinour revenuesand expenses within continuing operationscompared to the same period in 2007.

In the first quarter of 2008, total revenue from continuing operations was $291.9 million, a 17.4% increase compared to the same period in 2007. The increase in revenue is principally attributed to a 4.6% increase in RevPAR and revenue of the two recently-acquired hotels of $29.1 million.

In the first quarter of 2008,hotel departmental expense increased$18.9 millioncompared to the same period in 2007, of which $13.2 million is attributable to the two recently-acquiredhotelsand the remainder primarily reflects increased occupancy. As a percentage of total revenue, hotel departmental expenses increasedfrom31.5% to 33.3% compared to the same period in 2007.Rooms expense decreased as a percentage of total revenue from 19.6% to 18.7%,whichwas offset by an increase in food and beverage expense as a percent of total revenue from 9.9% to 12.2% and an increase in other operating department expenses as a percent of total revenue from 2.0% to 2.4%. These changes in the departmental expenses as a percent of total revenueareprimarily due to the mix and nature of the business        of the tworecently-acquiredRenaissancehotels,which areboth resort properties. Theaverage daily rate, orADR,at the tworecently-acquired hotels was 68% higher than the remainder of the portfoliointhe first quarter of 2008,which was the principal reason for the improvement in rooms expense as a percentage of total revenue.The twoRenaissancehotels contributednearly 30% of our food and beverage revenue during the first quarter of 2008, which generally has significantly higher expenses as a percent of revenue.

In the first quarter of 2008, other propertyoperatingcosts increased $8.6 million compared to the same period in2007, of which $6.0 million related to the tworecently-acquired        hotelsin December 2007. As a percentage of total revenue, other propertyoperatingcosts decreased from 27.6% to 26.4% compared to the same period in 2007. Both therecently-acquired hotels and the remainder of the portfolio contributed to thispercentageimprovement.

In the first quarter of 2008, management and franchise fees increased $2.8 million compared to the same period in 2007, of which $0.9 million related to the tworecently-acquiredhotels. The change in management and franchise fees as a percentage of revenue        in the first quarter of 2008 compared to the same period in 2007 was not significant.

In the first quarter of 2008, taxes, insurance and lease expenseincreased$0.1 million compared to the same period in 2007.The taxes, insurance and lease expense related to the tworecently-acquiredhotelsaggregated$1.4 millionforthe first quarter of 2008.As a percentage of total revenue, taxes, insurance and lease expense decreasedfrom11.8% to 10.0% compared to the same period in 2007.The decrease in percentage primarily relates toadecrease of $2.1 million in percentage lease expense. Several of our percentage leases were reset in late 2007 at more favorable terms for our consolidated hotel lessees.

Corporate expenses remained essentially unchanged in the first quarter of 2008 compared to the same period in 2007.

23

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In the first quarter of 2008, depreciationand amortizationexpense increased $8.7 million, compared to the same period in 2007, of which $2.0 million related to the tworecently-acquiredhotels,and the rest of the increaseis attributed to the $227.5 million of consolidated hotel capital expenditures incurred in 2007.

In thefirstquarter of 2008, weidentifiedsixhotels ascandidates to be sold. Because of our shorter remaining estimated hold        period on these hotels,wetestedthemfor impairmentunder the provisions of SFAS No. 144using undiscounted estimated cash flows over the expected remaining hold period. Of the hotels tested,twohotelsfailed the test under SFAS No. 144, whichresulted in an impairment charge of $17.1 million to write down thesehotel assetsto our current estimate oftheirfair market valuebefore selling expenses.

     In the first quarter of 2008,we had other expenses primarily related to condominium management expenses and conversion costs related to our Hotel 480Union Square hotelin San Francisco, which        wewillrebrand as a Marriott in early 2009.

Net interest expense included in continuing operations for the first quarter increased $3.1 million compared to the same period in 2007. This increase was primarily attributable to an increase in interest expense related to the mortgage debt on the acquired hotels, partially offset by decreases in floating rate debt.

Equity in income from unconsolidated entities decreased to a loss of $0.6 million in the first quarter of 2008 from income of $12.8 million in the first quarter of 2007. This decrease is primarily attributed to $11.2 million of income received from the gain on the sale of an unconsolidated hotel during the first quarter of 2007.

     During the first quarter of 2007, we finalized the sale of 31 of the 184 units at our Royale Palms condominium project and recognized a gain on sale of $3.3 million under the completed contract method.

Discontinued operations for the three months ended March 31, 2007, includes the operating income of $3.6 million, charges related to early extinguishment of debt of $0.9 million, and minority interest expense of $0.4 million related to the eleven hotels we sold in 2007. Discontinued operations also include $6.0 million of gains related to the sale of        two hotels during the first quarter of 2007.

24

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**Non-GAAP Financial Measures**

We refer in thisreportto certain “non-GAAP financial measures.” These measures, including FFO,Same-Store FFO,EBITDA,Same-Store EBITDA,        Same-StoreHotelEBITDAandSame-StoreHotelEBITDAmargin, are measures of our financial performance that are not calculated and presented in accordance with GAAP. The following tables reconcile each of these non-GAAP        measures to the most comparable GAAP financial measure. Immediately following the reconciliations, we include a discussion of why we believe these measures are useful supplemental measures of our performance and the limitationsofsuch measures.

     The following tables detail our computation of FFO, Same-Store FFO, EBITDA and Same-Store EBITDA (in thousands, except per unit data):

**Reconciliation of Net Income****(Loss)****to FFO****and Same-Store FFO**

|                                                                                            | **Three Months Ended March 31,** |
|-------------------------------------------------------------------------------------------------|----------------------------------|
|                                                                                            | **2008**                         |   | **2007** |
|                                                                                            | **Dollars**                      |   | **Unit****s** |   | **Per****Unit****Amount** |   | **Dollars** |   | **Unit****s** |   | **Per****Unit****Amount** |
| **Net income (loss)**                                                  | $                                | (12,950 | ) |   |   |   |   |   |   |   | $ | 29,588 |   |   |   |   |   |   |   |
| Preferred distributions                                                |                             | (9,678 | ) |   |   |   |   |   |   |   |   | (9,678 | ) |   |   |   |   |   |   |
| **Net income (loss) applicable to common****unitholders**              |                             | (22,628 | ) |   | 63,068 |   | $ | (0.36 | ) |   |   | 19,910 |   |   | 63,117 |   | $ | 0.32 |   |
| Depreciation and amortization                                          |                             | 33,768 |   |   | -    |   |   | 0.53 |   |   |   | 25,051 |   |   | -    |   |   | 0.40 |   |
| Depreciation, unconsolidated entities and discontinued operations      |                             | 3,549 |   |   | -    |   |   | 0.06 |   |   |   | 2,863 |   |   | -    |   |   | 0.04 |   |
| Gain on sale of hotels                                                 |                             | -    |   |   | -    |   |   | -    |   |   |   | (6,031 | ) |   | -    |   |   | (0.10 | ) |
| Gain on sale of hotels in unconsolidated entities                      |                             | -    |   |   | -    |   |   | -    |   |   |   | (11,182 | ) |   | -    |   |   | (0.18 | ) |
| Conversion ofFelCoroptions and unvested restricted stock               |                             | -    |   |   | 126 |   |   | -    |   |   |   | -    |   |   | -    |   |   | -    |   |
| **FFO**                                                                |                             | 14,689 |   |   | 63,194 |   |   | 0.23 |   |   |   | 30,611 |   |   | 63,117 |   |   | 0.48 |   |
| FFO from discontinued operations                                       |                             | 13 |   |   | -    |   |   | -    |   |   |   | (3,269 | ) |   | -    |   |   | (0.05 | ) |
| FFO from acquired hotels(a)                                            |                             | -    |   |   | -    |   |   | -    |   |   |   | 3,385 |   |   | -    |   |   | 0.05 |   |
| Gain on sale of condominiums                                           |                             | -    |   |   | -    |   |   | -    |   |   |   | (3,281 | ) |   | -    |   |   | (0.05 | ) |
| **Same-Store FFO**                                                     | $                                | 14,702 |   |   | 63,194 |   | $ | 0.23 |   |   | $ | 27,446 |   |   | 63,117 |   | $ | 0.43 |   |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

25

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FFO has not been adjusted for the following amounts included in netincome(loss)applicable to commonunitholders(in thousands):

|                                                                                            | **Three Months Ended**

**March 31,** |
|-------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                            | **2008**                              |   | **200****7** |
| Impairment loss                                                        | $                                     | (17,131 | ) |   | $ | -    |   |
| Conversion costs                                                       |                                  | (259 | ) |   |   | -    |   |
| Abandoned projects                                                     |                                  | -    |   |   |   | (22 | ) |
| Charges related to debt extinguishment, net of minority interests      |                                  | -    |   |   |   | (811 | ) |

**Reconciliation of Net Income****(Loss)****to EBITDA****and Same-Store EBITDA**

(in thousands)

|                                                                                                | **Three Months Ended                    March 31,** |
|-----------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                                                | **2008**                                            |   |   | **2007** |   |
| **Net income****(loss)**                                                   | $                                                   | (12,950 | ) |   | $ | 29,588 |   |
| Depreciationand amortization                                               |                                                | 33,768 |   |   |   | 25,051 |   |
| Depreciation, unconsolidated entities and discontinued operations          |                                                | 3,549 |   |   |   | 2,863 |   |
| Interest expense                                                           |                                                | 26,549 |   |   |   | 24,118 |   |
| Interest expense, unconsolidated entities and discontinued operations      |                                                | 1,596 |   |   |   | 1,574 |   |
| AmortizationofFelCorstock compensation                                     |                                                | 1,265 |   |   |   | 1,407 |   |
| **EBITDA**                                                                 |                                                | 53,777 |   |   |   | 84,601 |   |
| EBITDA from discontinued operations                                        |                                                | 13 |   |   |   | (8,516 | ) |
| EBITDA from acquired hotels(a)                                             |                                                | -    |   |   |   | 6,505 |   |
| Gain on sale of condominiums                                               |                                                | -    |   |   |   | (3,281 | ) |
| **Same-Store EBITDA**                                                      | $                                                   | 53,790 |   |   | $ | 79,309 |   |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

EBITDA has not been adjusted for the following amounts included in netincome(loss)(in thousands):

|                                                                                            | **Three Months Ended**

**March 31,** |
|-------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                            | **200****8**                          |   | **200****7** |
| Impairment loss                                                        | $                                     | (17,131 | ) |   | $ | -    |   |
| Conversion costs                                                       |                                  | (259 | ) |   |   | -    |   |
| Gainon sale of hotels                                                  |                                  | -    |   |   |   | 6,031 |   |
| Gain on sale ofhotels inunconsolidated entities                        |                                  | -    |   |   |   | 11,182 |   |
| Abandoned projects                                                     |                                  | -    |   |   |   | (22 | ) |
| Charges related to debt extinguishment, net of minority interests      |                                  | -    |   |   |   | (811 | ) |

26

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     The following tables detail our computation ofSame-StoreHotelEBITDA,Same-StoreHotelEBITDAmargin, hotel operating expenses and the reconciliation of hotel operating expenses to total operating expenses with respect to our hotels included in continuing operations atthe dates presented.

**Same-Store****Hotel****EBITDA and****Same-Store****Hotel EBITDA Margin**

(dollars in thousands)

|                                                              | **Three Months Ended                    March 31,** |                |
|-------------------------------------------------------------------|-----------------------------------------------------|---------------------|
|                                                              | **200****8**                                        |                | **2007** |   |
| Total revenues                           | $                                                   | 291,875             |   |   | $ | 248,672 |   |
| Other revenue                            |                                                | (328                | ) |   |   | (131 | ) |
| Revenue from acquired hotels(a)          |                                                | -    |   |   |   | 27,985 |   |
| Same-Store hoteloperatingrevenue         |                                                | 291,547             |   |   |   | 276,526 |   |
| Same-Store hotel operating expenses      |                                                | (209,382            | ) |   |   | (198,098 | ) |
| Same-StoreHotel EBITDA                   | $                                                   | 82,165              |   |   | $ | 78,428 |   |
| Same-StoreHotel EBITDA margin(b)         |                                                | 28.2%               |   |   |   | 28.4% |   |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

(b)     Same-StoreHotelEBITDA as a percentage of hoteloperatingrevenue.

**Reconciliatio****n****of Total Operating Expense****s****to Same-Store Hotel Operating Expense****s**

(dollars in thousands)

|                                                                            | **Three Months Ended                    March 31,** |
|---------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                            | **200****8**                                        |   | **200****7** |
| Total operating expenses                               | $                                                   | 278,116 |   |   | $ | 221,034 |   |
| Unconsolidated taxes, insurance and lease expense      |                                                | 2,122 |   |   |   | 1,703 |   |
| Consolidated hotel lease expense                       |                                                | (12,197 | ) |   |   | (14,259 | ) |
| Corporate expenses                                     |                                                | (6,827 | ) |   |   | (6,787 | ) |
| Depreciationand amortization                           |                                                | (33,768 | ) |   |   | (25,051 | ) |
| Impairment loss                                        |                                                | (17,131 | ) |   |   | -    |   |
| Other expenses                                         |                                                | (933 | ) |   |   | (22 | ) |
| Expenses from acquired hotels(a)                       |                                                | -    |   |   |   | 21,480 |   |
| Same-StoreHotel operating expenses                     | $                                                   | 209,382 |   |   | $ | 198,098 |   |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

27

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     The following tables reconcile net income (loss) to Same-Store Hotel EBITDA and the ratio of operating income to total revenue to Same-Store Hotel EBITDA margin.

**Reconciliation of Net****Income****(Loss)****to****Same-Store****Hotel****EBITDA**

(in thousands)

|                                                                             | **Three Months Ended                    March 31,** |
|----------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                             | **200****8**                                        |   | **200****7** |
| Net income(loss)                                        | $                                                   | (12,950 | ) |   | $ | 29,588 |   |
| Discontinued operations                                 |                                                | 13 |   |   |   | (8,488 | ) |
| EBITDA from acquired hotels(a)                          |                                                | -    |   |   |   | 6,505 |   |
| Equity inloss (income)from unconsolidated entities      |                                                | 622 |   |   |   | (12,771 | ) |
| Minority interests                                      |                                                | 71 |   |   |   | (282 | ) |
| Consolidated hotel lease expense                        |                                                | 12,197 |   |   |   | 14,259 |   |
| Unconsolidated taxes, insurance and lease expense       |                                                | (2,122 | ) |   |   | (1,703 | ) |
| Interest expense, net                                   |                                                | 26,003 |   |   |   | 22,872 |   |
| Corporate expenses                                      |                                                | 6,827 |   |   |   | 6,787 |   |
| Depreciationand amortization                            |                                                | 33,768 |   |   |   | 25,051 |   |
| Impairment loss                                         |                                                | 17,131 |   |   |   | -    |   |
| Other revenue                                           |                                                | (328 | ) |   |   | (131 | ) |
| Other expenses                                          |                                                | 933 |   |   |   | 22 |   |
| Gain on sale ofcondominiums                             |                                                | -    |   |   |   | (3,281 | ) |
| **Same-Store****Hotel EBITDA**                          | $                                                   | 82,165 |   |   | $ | 78,428 |   |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

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**Reconciliation of Ratio of Operating Income to Total Revenue****s****to****Same-Store****Hotel****EBITDA****Margin**

|                                                                            | **Three Months Ended                    March 31,** |
|---------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                            | **200****8**                                        |  |   | **200****7** |  |
| Ratio of operating income to total revenues            | 4.7                                                 | % |   | 10.0 | % |
| Other revenue                                          | (0.1                                                | ) |   | -   |   |
| Revenue from acquired hotels(a)                        | -                                    |   |   | 10.1 |   |
| Unconsolidated taxes, insurance and lease expense      | (0.7                                                | ) |   | (0.6 | ) |
| Consolidatedlease expense                              | 4.2                                                 |   |   | 5.2 |   |
| Other expenses                | 0.3                                                 |   |   | -   |   |
| Corporate expenses                                     | 2.3                                                 |   |   | 2.4 |   |
| Depreciationand amortization                           | 11.6                                                |   |   | 9.1 |   |
| Impairment loss                                        | 5.9                                                 |   |   | -    |   |
| Expenses from acquired hotels(a)                       | -                                    |   |   | (7.8 | ) |
| Same-StoreHotel EBITDA margin                          | 28.2                                                | % |   | 28.4 | % |

(a)     We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

Substantially all of our non-current assets consist of real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminish predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of        performance, which are not measures of operating performance under GAAP, to be helpful in evaluating a real estate company’s operations. These supplemental measures, including FFO,Same-Store FFO,EBITDA,Same-Store EBITDA, Same-StoreHotel EBITDA andSame-StoreHotel EBITDA margin, are not measures of operating performance under GAAP. However, we consider these non-GAAP measures to be supplemental measures of a REIT’s performance and should be considered along with, but not as an alternative to, net income as a measure of our operating performance.

*FFO and EBITDA*

The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts,orNAREIT, defines FFO as net income or loss (computed in accordance withGAAP), excluding gains or losses        from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.  We compute FFO in accordance with standards established by NAREIT. This may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT        definition differently than we do.

EBITDA is a commonly used measure of performance in many industries. We define EBITDA as net income or loss (computed in accordance with GAAP) plus interest expenses, income taxes, depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are        calculated to reflect EBITDA on the same basis.

*Hotel EBITDA and Hotel EBITDA Margin*

Hotel EBITDA and Hotel EBITDA margin are commonly used measures of performance in the hotel industry and give investors a more complete understanding of the operating results over which our individual hotels and operating managers have direct control. We believe that Hotel EBITDA and Hotel EBITDA marginareuseful to investors by providing greater transparency with respect to two significant measures used by us in our financial and operational decision-making. Additionally, using these measures facilitates comparisons with other hotel REITs and hotel owners. We present Hotel EBITDA and Hotel EBITDA margin by eliminating corporate-level expenses, depreciation and expenses related to our capital structure. We eliminate corporate-level costs and expenses        because we believe property-level results provide investors with supplemental information into the ongoing operational performance of our hotels and the effectiveness of management on a property-level basis. We eliminate depreciation and amortization because, even though depreciation and amortization are property-level expenses, we do not believe that these non-cash expenses, which are based on historical cost accounting for real estate assetsand        implicitly assume that the value of real estate assets diminishes predictably over time, accurately reflect an adjustment in the value of our assets.Wealsoeliminate consolidated percentage rent paid to unconsolidated entities, which is effectively eliminated by minority interest expense and equity in income from unconsolidated subsidiaries, and include the cost of        unconsolidated taxes, insurance and lease expense, to reflect the entire operating costs applicable to our hotels.

*Same-Store Comparisons         *

     To derive same-store comparisons we have adjusted the numbers to remove discontinued operations and gains on sales of condominium units; and have added the historical results of operations from the two Renaissance hotels acquired in December 2007.

*Limitations of Non-GAAP Measures*

FelCor’s management and Board of Directors use FFO,Same-Store FFO,EBITDA,Same-Store EBITDA, Same-StoreHotel EBITDA andSame-StoreHotel EBITDA margin to evaluate the performance of our hotels and to facilitate comparisons between us and lodging REITs, hotel owners who are not REITs and other capital intensive companies. We useSame-StoreHotel EBITDA andSame-StoreHotel EBITDA margin in evaluating hotel-level performance and the        operating efficiency of our hotel managers.

The use of these non-GAAP financial measures has certain limitations. FFO,Same-Store FFO,EBITDA,Same-Store EBITDA, Same-StoreHotel EBITDA andSame-StoreHotel EBITDA margin, as presented by us, may not be comparable to FFO,Same-Store FFO,EBITDA,Same-Store EBITDA, Same-StoreHotel EBITDA andSame-StoreHotel EBITDA margin as calculated by other real estate companies. These        measures do not reflect certain expenses that we incurred and will incur, such as depreciation, interest and capital expenditures. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest        expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

     

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. Neither should FFO, FFO perunit,        Same-Store FFO,EBITDA,orSame-Store EBTIDAbe considered as measures of our liquidity or indicative of funds available for our cash needs, including our ability to make cash distributions or service our debt. FFO perunitdoes not measure, and should not        be used as a measure of, amounts that accrue directly to the benefit ofunitholders. FFO,Same-Store FFO,EBITDA,Same-Store EBITDA, Same-StoreHotel EBITDA andSame-StoreHotel EBITDA margin reflect additional ways of        viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. Management strongly encourages investors to review our financial information in its entirety and not to rely on a single financial measure.

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**Hotel Portfolio Composition**         

The following tables set forth, asofMarch 31, 2008,for85ConsolidatedHotelsdistribution by brand, by our top markets,by type of location, and by market segment.

 

| **Brand**                 |  

**Hotels** |   |  

**Rooms** |   | **% of**

**Total Rooms** |   | **% of 200****7**

**Hotel**** ****EBITDA****(a) (b)** |
|---------------------------|--------------------|--------|-------------------|--------|---------------------------|--------|-------------------------------------------------------------|
| Embassy Suites Hotels     | 47                 |   | 12,129            |   | 49                        |   | 58                                                          |   |
| Holiday Inn               | 17                 |   | 6,305             |   | 25                        |   | 19                                                          |   |
| Sheraton and Westin       | 9                  |   | 3,217             |   | 13                        |   | 14                                                          |   |
| Doubletree                | 7                  |   | 1,471             |   | 6                         |   | 7                                                           |   |
| Renaissance and Hotel 480 | 3                  |   | 1,324             |   | 5                         |   | -                                                           | (b) |
| Hilton                    | 2                  |   | 559               |   | 2                         |   | 2                                                           |   |
|                      |               |   |              |   |                      |   |                                                        |   |
|                      |               |   |              |   |                      |   |                                                        |   |
| **Top Market****s**       |               |   |              |   |                      |   |                                                        |   |
| South Florida             | 5                  |   | 1,436             |   | 6                         |   | 7                                                           |   |
| Atlanta                   | 5                  |   | 1,462             |   | 6                         |   | 7                                                           |   |
| Los Angelesarea           | 4                  |   | 898               |   | 4                         |   | 6                                                           |   |
| San Franciscoarea         | 6                  |   | 2,141             |   | 8                         |   | 6                                                           |   |
| Orlando                   | 5                  |   | 1,690             |   | 7                         |   | 5                                                           |   |
| Dallas                    | 4                  |   | 1,333             |   | 5                         |   | 4                                                           |   |
| Minneapolis               | 3                  |   | 736               |   | 3                         |   | 4                                                           |   |
| Phoenix                   | 3                  |   | 798               |   | 3                         |   | 4                                                           |   |
| Northern New Jersey       | 3                  |   | 756               |   | 3                         |   | 4                                                           |   |
| San Diego                 | 1                  |   | 600               |   | 2                         |   | 3                                                           |   |
| Washington, D.C.          | 1                  |   | 443               |   | 2                         |   | 3                                                           |   |
| Chicago                   | 3                  |   | 795               |   | 3                         |   | 3                                                           |   |
| San Antonio               | 3                  |   | 874               |   | 4                         |   | 3                                                           |   |
| Philadelphia              | 2                  |   | 729               |   | 3                         |   | 3                                                           |   |
| Boston                    | 2                  |   | 532               |   | 2                         |   | 2                                                           |   |
|                      |               |   |              |   |                      |   |                                                        |   |
| **Location**              |               |   |              |   |                      |   |                                                        |   |
| Suburban                  | 33                 |   | 8,360             |   | 33                        |   | 36                                                          |   |
| Airport                   | 20                 |   | 6,205             |   | 26                        |   | 26                                                          |   |
| Urban                     | 20                 |   | 6,362             |   | 25                        |   | 25                                                          |   |
| Resort                    | 12                 |   | 4,078             |   | 16                        |   | 13                                                          |   |
|                      |               |   |              |   |                      |   |                                                        |   |
| **Segment**               |               |   |              |   |                      |   |                                                        |   |
| Upper-upscale             | 68                 |   | 18,700            |   | 75                        |   | 81                                                          |   |
| Full service              | 17                 |   | 6,305             |   | 25                        |   | 19                                                          |   |

|  | (a)      | Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item2of                    thisQuarterlyReport on Form 10-Q. |
|--|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b)      | We acquired the Renaissance Esmeralda Resort & Spa and the Renaissance Vinoy Resort & Golf Club in December 2007. They did not make a significant contribution to our 2007 Hotel EBITDA. |
|--|-----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Hotel Operating Statistics**

     The following tables set forth occupancy, ADR and RevPAR atMarch 31, 2008and 2007, and the percentage changes thereofbetween the periods presented,for        hotels included in our consolidated operations.

**Operating Statistics by Brand**

|                         | **Occupancy (%)**                                |
|------------------------------|--------------------------------------------------|
|                         | ****
****Three Months Ended****March 31****,**** |
|                         | **200****8**                                     |   | **200****7** |   | **%Variance** |
| Embassy Suites Hotels        | 73.0                                             |   | 72.5 |   | 0.7 |   |
| Holiday Inn                  | 70.0                                             |   | 63.4 |   | 10.4 |   |
| Sheraton and Westin          | 66.1                                             |   | 68.8 |   | (3.8 | ) |
| Doubletree                   | 75.6                                             |   | 71.7 |   | 5.5 |   |
| Renaissance and Hotel 480(a) | 70.7                                             |   | 73.5 |   | (3.9 | ) |
| Hilton                       | 52.3                                             |   | 38.9 |   | 34.5 |   |
|                         |                                             |   |   |   |   |   |
| Total hotels                 | 70.9                                             |   | 69.0 |   | 2.8 |   |
|                         |                                             |   |   |   |   |   |
|                         |                                             |   |   |   |   |   |
|                         | **ADR****(****$****)**                           |
|                         | ****
****Three Months Ended****March 31****,**** |
|                         | **200****8**                                     |   | **2007** |   | **%Variance** |
| Embassy Suites Hotels        | 152.21                                           |   | 148.43 |   | 2.5 |   |
| Holiday Inn                  | 117.89                                           |   | 112.82 |   | 4.5 |   |
| Sheraton and Westin          | 130.15                                           |   | 131.69 |   | (1.2 | ) |
| Doubletree                   | 153.99                                           |   | 149.54 |   | 3.0 |   |
| Renaissance and Hotel 480(a) | 210.97                                           |   | 208.20 |   | 1.3 |   |
| Hilton                       | 106.35                                           |   | 106.22 |   | 0.1 |   |
|                         |                                             |   |   |   |   |   |
| Total hotels                 | 143.21                                           |   | 140.76 |   | 1.7 |   |
|                         |                                             |   |   |   |   |   |
|                         |                                             |   |   |   |   |   |
|                         | **RevPAR****(****$****)**                        |
|                         | ****
****Three Months Ended****March 31****,**** |
|                         | **200****8**                                     |   | **200****7** |   | **%Variance** |
| Embassy Suites Hotels        | 111.09                                           |   | 107.55 |   | 3.3 |   |
| Holiday Inn                  | 82.50                                            |   | 71.54 |   | 15.3 |   |
| Sheraton and Westin          | 86.06                                            |   | 90.56 |   | (5.0 | ) |
| Doubletree                   | 116.42                                           |   | 107.18 |   | 8.6 |   |
| Renaissance and Hotel 480(a) | 149.09                                           |   | 153.05 |   | (2.6 | ) |
| Hilton                       | 55.62                                            |   | 41.30 |   | 34.7 |   |
|                         |                                             |   |   |   |   |   |
| Total hotels                 | 101.55                                           |   | 97.06 |   | 4.6 |   |

(a)     Decreases in occupancy and RevPAR are principally related to renovation-related disruption at Hotel 480 Union Square.We have included historical room statistics for the two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels,for comparison purposes.

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**Operating Statistics for Our Top Markets**

|                | **Occupancy (%)**                      |
|---------------------|----------------------------------------|
|                | **Three Months Ended****March****31,** |
|                | **200****8**                           |   | **200****7** |   | **%Variance** |
| South Florida       | 87.1                                   |   | 86.8 |   | 0.3 |   |
| Atlanta             | 76.3                                   |   | 74.5 |   | 2.4 |   |
| Los Angelesarea     | 73.6                                   |   | 77.5 |   | (5.1 | ) |
| San Franciscoarea   | 71.0                                   |   | 66.8 |   | 6.3 |   |
| Orlando             | 81.9                                   |   | 79.2 |   | 3.5 |   |
| Dallas              | 69.9                                   |   | 70.4 |   | (0.8 | ) |
| Minneapolis         | 67.0                                   |   | 69.1 |   | (3.1 | ) |
| Phoenix             | 75.9                                   |   | 81.9 |   | (7.4 | ) |
| Northern New Jersey | 66.4                                   |   | 59.8 |   | 10.9 |   |
| San Diego           | 80.5                                   |   | 78.5 |   | 2.6 |   |
| Washington, D.C.    | 43.9                                   |   | 62.7 |   | (29.9 | ) |
| Chicago             | 65.0                                   |   | 60.0 |   | 8.4 |   |
| San Antonio         | 77.1                                   |   | 71.9 |   | 7.3 |   |
| Philadelphia        | 62.5                                   |   | 55.8 |   | 11.9 |   |
| Boston              | 69.0                                   |   | 51.9 |   | 32.9 |   |
|                | **ADR ($)**                            |
|                | **Three Months Ended****March****31,** |
|                | **200****8**                           |   | **200****7** |   | **%Variance** |
| South Florida       | 199.14                                 |   | 198.07 |   | 0.5 |   |
| Atlanta             | 127.06                                 |   | 125.34 |   | 1.4 |   |
| Los Angelesarea     | 156.95                                 |   | 150.64 |   | 4.2 |   |
| San Franciscoarea   | 136.24                                 |   | 131.09 |   | 3.9 |   |
| Orlando             | 124.53                                 |   | 122.71 |   | 1.5 |   |
| Dallas              | 130.17                                 |   | 130.64 |   | (0.4 | ) |
| Minneapolis         | 145.02                                 |   | 139.03 |   | 4.3 |   |
| Phoenix             | 186.19                                 |   | 180.43 |   | 3.2 |   |
| Northern New Jersey | 161.98                                 |   | 152.06 |   | 6.5 |   |
| San Diego           | 152.80                                 |   | 152.53 |   | 0.2 |   |
| Washington, D.C.    | 162.65                                 |   | 172.96 |   | (6.0 | ) |
| Chicago             | 120.74                                 |   | 122.42 |   | (1.4 | ) |
| San Antonio         | 113.77                                 |   | 109.50 |   | 3.9 |   |
| Philadelphia        | 136.34                                 |   | 122.85 |   | 11.0 |   |
| Boston              | 136.39                                 |   | 140.39 |   | (2.8 | ) |
|                | **RevPAR ($)**                         |
|                | **Three Months Ended****March****31,** |
|                | **200****8**                           |   | **200****7** |   | **%Variance** |
| South Florida       | 173.37                                 |   | 171.95 |   | 0.8 |   |
| Atlanta             | 96.90                                  |   | 93.32 |   | 3.8 |   |
| Los Angelesarea     | 115.45                                 |   | 116.81 |   | (1.2 | ) |
| San Franciscoarea   | 96.69                                  |   | 87.51 |   | 10.5 |   |
| Orlando             | 102.05                                 |   | 97.17 |   | 5.0 |   |
| Dallas              | 90.96                                  |   | 92.01 |   | (1.1 | ) |
| Minneapolis         | 97.14                                  |   | 96.13 |   | 1.1 |   |
| Phoenix             | 141.34                                 |   | 147.85 |   | (4.4 | ) |
| Northern New Jersey | 107.47                                 |   | 90.95 |   | 18.2 |   |
| San Diego           | 123.01                                 |   | 119.68 |   | 2.8 |   |
| Washington, D.C.    | 71.44                                  |   | 108.36 |   | (34.1 | ) |
| Chicago             | 78.53                                  |   | 73.46 |   | 6.9 |   |
| San Antonio         | 87.75                                  |   | 78.71 |   | 11.5 |   |
| Philadelphia        | 85.16                                  |   | 68.60 |   | 24.1 |   |
| Boston              | 94.10                                  |   | 72.87 |   | 29.1 |   |

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**Liquidity and Capital Resources**

Our principal source of cash to meet our cash requirements, including distributions tounitholdersand repayments of indebtedness, is from hoteloperations. For thethreemonths endedMarch 31, 2008, net cash flow provided by operating activities, consisting primarily of hotel operations, was $47.5 million. AtMarch 31, 2008, we had cash on hand of $71.3 million,includingapproximately $52.5 million held under management agreements to meet        minimum working capital requirements.

     Wepaid commondistributionsof$0.35perunitforthefirst quarter of 2008.FelCor’sboard of directors will determine the amount of future common and preferreddistributionsfor each quarter, based upon the actual operating results forthat quarter, economic        conditions, other operating trends, our financial condition and capital requirements, as well asFelCor’sminimum REIT distribution requirements.

We currently expect that our cash flow provided by operating activities for 2008will be approximately $193to $201 million.Thiscash flow forecast assumesthatRevPAR increasesbetween 6.5%and 8.5% and Hotel EBITDA margin increasesapproximately50 to 100basis points. Our current operating planfor 2008contemplates that we will makeaggregatecommondistributionsof $90 million,preferreddistributionsof $39 millionand$22 million in normal recurring principal payments, leavingsurpluscash flow(before capital expendituresoradditional debt reduction)of approximately $42to        $50 million.In 2008,we planto spendapproximately $150 millionforcapital expenditures,whichwillbefundedfromcash and borrowing underour line of credit.

     We are subject to increases in hotel operating expenses, including wage and benefit costs, repair and maintenance expenses, utilities and insurance expenses, that can fluctuate disproportionately to revenues. Operating expenses are difficult to predict and control, which can produce volatility in our operating results.If our hotel RevPAR decreases and/orHotel EBITDAmargins shrink, our operations, earnings and/or cash flow could suffer a material adverse effect.

*Debt*

     *Line of Credit*     

At March 31, 2008,we had borrowingsof $30 millionoutstandingunder our$250 millionline of credit.Theinterest rate on our line of creditwasLIBOR plus0.80%at March 31, 2008.

*Mortgage Debt*

At March 31, 2008, we had $950 million of debt secured by mortgages on our hotels.With respect to two of these loans, we are permitted to retain 115% of budgeted hotel operating expenses, but the remaining revenues would become subject to a lock-box arrangement if a specified debt service coverage ratio is not        met.Thesehotels currently exceed the minimum debt service coverage ratio, however, under the terms of the loan agreement, the lock-box provisions remain in place until the loan is repaid. None of these hotels haveever fallenbelow thedebt service coverage ratio.

     With respect to the mortgage debt assumed in connection with our acquisitions of the Renaissance Vinoy Resort & Golf Club and Renaissance Esmeralda Resort & Spa, all cash from the hotels in excess of operating expenses, taxes, insurance and capital expenditure reserves is subject to lock-box arrangements. In each case, the        lender holds lock-box funds that are first applied tomeet current debt service obligations,and any excess funds are held in the lock-box account until the relevant hotel meets or exceeds a debt service coverage ratio of 1:1. AtMarch 31, 2008, the debt service coverage ratio forbothhotelsexceeded1:1.

Our hotel mortgage debt is non-recourse to us andmost containprovisions allowing for the substitution of collateral upon satisfaction of certain conditions. Most of our mortgage debt is prepayable, subject to various prepayment, yield maintenance or defeasance        obligations.

33

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     *Senior**Notes.*Our publicly-traded senior notes require that we satisfy total leverage, secured leverage and interest coverage tests in order to: incur additional indebtedness except to refinance        maturing debt with replacement debt, as defined under our indentures; pay distributions in excess of the minimum dividend required to meetFelCor’sREIT qualification test; repurchasepartnership units; or merge. As of the date of this filing, we have satisfied all such tests. Under the terms ofoneof our indentures, we are prohibited from repurchasing any of ourpartnership units, whether common or preferred, subject to certain exceptions, so long as our debt-to-EBITDA ratio, as defined in the indentures, exceeds 4.85 to 1, which it does at the date of this filing.If we were unable to continue to satisfythe incurrence test under        the indentures governing our senior unsecured notes, we may be prohibited from, among other things, incurring any additional indebtedness(other than our line of credit),except under certain specific exceptions,ormaking distributionson our preferred or commonunits, except to the extent necessary to satisfyFelCor’sREIT qualification requirement thatitdistribute currently at least 90% ofitstaxable income.

We currently anticipate that we will meet our financial covenant and incurrence testsbased on current RevPAR expectations.For 2008, we currently anticipate that ourfull year 2008portfolio RevPAR will        bebetween 6.5% and 8.5% above2007.

*Other Debt.*In late 2007, we were notified thataAAA-ratedmoney market fund in which we had invested approximately $8.4 million had ceased honoring redemption requests and would liquidate its        investments over approximately a six-month period. In order to ensure that our liquidity would not be impaired as a consequence, an affiliate of the fund sponsor provided us with a short-term loan at a rate approximately equal to our earnings rate on the fund.Through the date of this filing we have received redemptions aggregating $3.4 million and the balance remaining on the short-term loan was $4.8 million.

*Interest Rate Caps.*Tofulfill requirements under certain loans, we owned interest rate caps with aggregate notional amounts of $427.2 millionat bothMarch 31, 2008 andDecember 31, 2007. These interest rate cap agreements have not been designated as hedges and have insignificant fair values at bothMarch 31, 2008 andDecember 31, 2007, resulting in no significant net earnings impact.

**Inflation**

     Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation. Competitionmay, however, require us to reduce room rates in the near term and may limit our ability to raise room rates in the future. We are also subject to        the risk that inflation will cause increases in hotel operating expenses disproportionately to revenues.If competition requires us to reduce room rates or limits our ability to raise room rates in the future, we may not be able to adjust our room rates to reflect the effects of inflation in full, in which case our operating results and liquidity could be adversely affected.

**Seasonality**

     

The lodging business is seasonal in nature.Generally, hotel revenues are greater in the second and third calendar quarters than in the first and fourth calendar quarters, although this may not be true for hotels in major tourist destinations. Revenues for hotels in tourist areas generally are substantially greater during        tourist season than other times of the year. Seasonal variations in revenue at our hotels can be expected to cause quarterlyfluctuations in our revenues. Quarterly earnings also may be adversely affected by events beyond our control, suchas extreme

weather conditions, economic factors and other considerations affecting travel.To the extent that cash flow from operations is insufficient during any quarter, due to temporary or seasonal fluctuations in revenues, we may utilize cash on hand or borrowings to satisfy our obligations or make distributions        to our equity holders.

34

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**Disclosure Regarding Forward-Looking Statements**

     Thisreport and the documents incorporated by reference in thisreport include forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements can be identified by the use of forward-looking terminology, such as        “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks”, or other variations of these terms (including their use in the negative), or by discussions of strategies, plans or intentions. A number of factors could cause actual results to differ materially from those anticipated by these forward-looking statements. Among these factors are:

|  | ·      | general economic and lodging industry conditions, includinga prolonged economic slowdown or recession, high inflation,the impact of the United States’ military involvement in the Middle East and elsewhere, future acts of terrorism,the threat                    or outbreak of a pandemic disease affecting the travel industry,the impact on the travel industry of high fuel costs and increased security precautions,andthe impact that the bankruptcy ofadditionalmajor air carriers may have on our revenues and receivables; |
|--|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ·      | our overall debt levels and our ability to obtain new financing and service debt; |
|--|----------------------------------------|-----------------------------------------------------------------------------------|

|  | ·      | our inability to retain earnings; |
|--|----------------------------------------|-----------------------------------|

|  | ·      | our liquidity and capital expenditures; |
|--|----------------------------------------|-----------------------------------------|

|  | ·      | our growth strategy and acquisition activities;and |
|--|----------------------------------------|----------------------------------------------------|

|  | ·      | competitive conditions in the lodging industry. |
|--|----------------------------------------|-------------------------------------------------|

Certain of these risks and uncertainties are described in greater detail under “Risk Factors” in our Annual Report on Form 10-K or in our other filings with the Securities and Exchange Commission.

     In addition, these forward-looking statements are necessarily dependent upon assumptions and estimates that may prove to be incorrect. Accordingly, while we believe that the plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these plans, intentions or        expectations will be achieved. The forward-looking statements included in this report, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, are expressly qualified in their entirety by the risk factors and cautionary statements discussed in our filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. We undertake no obligation to update any forward-looking statements to reflect future events or        circumstances.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

*Quantitative and Qualitative Disclosures About Market Risk*

     AtMarch 31, 2008, approximately54%of our consolidated debt had fixed interest rates. Currently, market rates of interest are below the rates we are obligated to pay on our fixed-rate        debt.

     The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents scheduled maturities and weighted average interest rates, by maturity dates. The fair value of our fixed rate debt indicates the estimated principal        amount of debt having the same debt service requirements that could have been borrowed at the date presented, at then current market interest rates.

35

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**Expected Maturity Date        at****March 31, 200****8**

**(dollars in thousands)**

|                  | **200****8** |    |   | **200****9** |    |   | **20****10** |                |   | **201****1** |    |   | **201****2** |                | **Thereafter** |   |                |  

**Total** |   |      | **Fair Value** |
|-----------------------|--------------|---------|--------|--------------|---------|--------|--------------|---------------------|--------|--------------|---------|--------|--------------|---------------------|----------------|--------|---------------------|-------------------|--------|-----------|----------------|
| **Liabilities**       |         |    |   |         |    |   |         |                |   |         |    |   |         |                |           |   |                |              |   |      |           |   |   |
| Fixed rate:           |         |    |   |         |    |   |         |                |   |         |    |   |         |                |           |   |                |              |   |      |           |   |   |
| Debt                  | $            | 10,504  |   | $            | 142,427 |   | $            | 274,014             |   | $            | 303,028 |   | $            | 2,415               |           | $      | 75,836              |              | $      | 808,224   |           | $ | 816,089 |
| Average interest rate |         | 8.00%   |   |         | 7.27%   |   |         | 8.70%               |   |         | 8.49%   |   |         | 6.49%               |           |   | 6.54%               |              |   | 8.15%     |           |   |   |
| Floating rate:        |         |    |   |         |    |   |         |                |   |         |    |   |         |                |           |   |                |              |   |      |           |   |   |
| Debt                  |         | 300,299 |   |         | 177,225 |   |         | -    |   |         | 215,000 |   |         | -    |           |   | -    |              |   | 692,524   |           |   | 637,119 |
| Average interest rate |         | 3.72%   |   |         | 4.47%   |   |         | -    |   |         | 6.23%   |   |         | -    |           |   | -    |              |   | 4.69%     |           |   |   |
| Total debt            | $            | 310,803 |   | $            | 319,652 |   | $            | 274,014             |   | $            | 518,028 |   | $            | 2,415               |           | $      | 75,836              |              | $      | 1,500,748 |           |   |   |
| Average interest rate |         | 3.86%   |   |         | 5.72%   |   |         | 8.70%               |   |         | 7.55%   |   |         | 6.49%               |           |   | 6.54%               |              |   | 6.55%     |           |   |   |
| Net discount          |         |    |   |         |    |   |         |                |   |         |    |   |         |                |           |   |                |              |   | (1,948    | )              |   |   |
| Total debt            |         |    |   |         |    |   |         |                |   |         |    |   |         |                |           |   |                |              | $      | 1,498,800 |           |   |   |

**Item 4. Controls and Procedures**

     (a)     *Evaluation of disclosure controls and procedures.*

          We haveno employees as FelCor, as our sole general partner, performs our management functions.Under the supervision and with the participation ofFelCor’smanagement, includingitschief executive officer andchieffinancial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)promulgatedunder the Securities Exchange Act of 1934) as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation,FelCor’schief executive officer andchieffinancial officer concluded, as of the Evaluation Date, that our disclosure controls and        procedures were effective, such that the information relating to us required to be disclosed in our reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated toFelCor’smanagement, includingitschief executive officer andchieffinancial officer, as appropriate,to allow timely decisions regarding requireddisclosures.

(b)     *Changes in internal control over financial reporting.*

There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934) during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial        reporting.

36

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**PART II. -- OTHER INFORMATION**

**Item 6.     Exhibits**

          The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K:

| Exhibit Number | Description of Exhibit                                                                                       |
|----------------|--------------------------------------------------------------------------------------------------------------|
|           |                                                                                                         |
| 31.1           | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2           | Certification of theChiefFinancial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   |
| 32.1           | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2           | Certification of theChiefFinancial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   |
|           |                                                                                                         |

37

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**SIGNATURE**

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|            |   | **FELCOR LODGING****LIMITED PARTNERSHIP**                                                                                   |
|-----------------|--------|-----------------------------------------------------------------------------------------------------------------------------|
|            |   | a Delaware Limited Partnership                                                                                              |
|            |   |                                                                                                                        |
|            |   |                                                                                                                        |
|            | By:    | FelCor Lodging Trust Incorporated                                                                                           |
|            |   | Its General Partner                                                                                                         |
|            |   |                                                                                                                        |
|            |   |                                                                                                                        |
| Date:May8, 2008 | By:    | /s/ Lester C. Johnson                                                                                                       |
|            |   | Name:   Lester C. Johnson

Title:     Senior Vice President and Chief Accounting Officer |

38