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 June 30, 2008  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 of incorporation 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 o No  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or 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 filero

                        

                        Accelerated filer oNon-accelerated filerx (Do not check if a smaller reporting company)

                        

                        Smaller reporting company o
  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes xNo   
 FELCOR LODGING LIMITED PARTNERSHIP  INDEX   PagePART I. -- FINANCIAL INFORMATIONItem 1.

                        Financial Statements

                        3Consolidated Balance Sheets June 30, 2008 and December 31, 2007 (unaudited)

                        3Consolidated Statements of Operations – For the Three and Six Months EndedJune 30, 2008 and 2007 (unaudited)

                        4Consolidated Statements of Comprehensive Income – For the Three and Six MonthsEnded June 30, 2008 and 2007 (unaudited)

                        5Consolidated Statements of Cash Flows – For the Six Months Ended June 30, 2008and 2007 (unaudited)

                        6Notes to Consolidated Financial Statements

                        7Item 2.

                        Management’s Discussion and Analysis of Financial Condition and Results of Operations

                        24General

                        24Financial Comparison

                        25Results of Operations

                        23Non-GAAP Financial Measures

                        29Pro Rata Share of Rooms Owned

                        36Hotel Portfolio Composition

                        37Hotel Operating Statistics

                        38Hotel Portfolio Listing

                        40Liquidity and Capital Resources

                        42Inflation

                        43Seasonality

                        43Disclosure Regarding Forward-Looking Statements

                        44Item 3.

                        Quantitative and Qualitative Disclosures About Market Risk

                        44Item 4.

                        Controls and Procedures

                        45PART II. – OTHER INFORMATIONItem 6.

                        Exhibits

                        46SIGNATURE

                        47
   2
  
 PART I. -- FINANCIAL INFORMATION  Item 1. Financial Statements  FELCOR LODGING LIMITED PARTNERSHIP  CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)  June 30,

                            2008

                        

                        December 31,

                            2007ASSETSInvestment in hotels, net of accumulated depreciation of $755,654 at

                            June 30, 2008 and $694,464 at December 31, 2007

                        $

                        2,379,061

                        

                        

                        $

                        2,400,057Investment in unconsolidated entities

                        

                        112,025

                        

                        

                        

                        127,273Cash and cash equivalents

                        

                        70,862

                        

                        

                        

                        57,609Restricted cash

                        

                        16,184

                        

                        

                        

                        14,846Accounts receivable, net of allowance for doubtful accounts of $338

                            at June 30, 2008 and $307 at December 31, 2007

                        

                        47,024

                        

                        

                        

                        37,871Deferred expenses, net of accumulated amortization of $12,002 at

                            June 30, 2008 and $10,820 at December 31, 2007

                        

                        6,749

                        

                        

                        

                        8,149Other assets

                        

                        31,133

                        

                        

                        

                        38,030Total assets

                        $

                        2,663,038

                        

                        

                        $

                        2,683,835LIABILITIES AND PARTNERS’ CAPITALDebt, net of discount of $1,813 at June 30, 2008 and $2,082 at

                            December 31, 2007

                        $

                        1,510,535

                        

                        

                        $

                        1,475,607Distributions payable

                        

                        30,654

                        

                        

                        

                        30,493Accrued expenses and other liabilities

                        

                        131,366

                        

                        

                        

                        134,159Total liabilities

                        

                        1,672,555

                        

                        

                        

                        1,640,259Commitments and contingenciesRedeemable units at redemption value, 1,354 units issued and

                            outstanding at June 30, 2008 and December 31, 2007

                        

                        14,217

                        

                        

                        

                        21,109Minority interest in other partnerships

                        

                        24,818

                        

                        

                        

                        25,264Partners’ capital:Preferred units, $0.01 par value, 20,000 units authorized:Series A Cumulative Convertible Preferred Units, 12,880 units,

                            issued and outstanding at June 30, 2008 and December 31, 2007

                        

                        309,362

                        

                        

                        

                        309,362Series C Cumulative Redeemable Preferred Units, 68 units,

                            issued and outstanding at June 30, 2008 and December 31, 2007

                        

                        169,412

                        

                        

                        

                        169,412Common units 69,413 units issued and outstanding at June 30, 2008

                            and December 31, 2007

                        

                        446,712

                        

                        

                        

                        490,979Accumulated other comprehensive income

                        

                        25,962

                        

                        

                        

                        27,450Total partners’ capital

                        

                        951,448

                        

                        

                        

                        997,203Total liabilities, redeemable units and partners’ capital

                        $

                        2,663,038

                        

                        

                        $

                        2,683,835
     The accompanying notes are an integral part of these consolidated financial statements.  3
  
   FELCOR LODGING LIMITED PARTNERSHIP  CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Six Months Ended June 30, 2008 and 2007 (unaudited, in thousands, except for per unit data)  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Revenues:Hotel operating revenue

                        $

                        305,237

                        

                        

                        $

                        265,529

                        

                        

                        $

                        596,784

                        

                        

                        $

                        514,068Other revenue

                        

                        931

                        

                        

                        

                        715

                        

                        

                        

                        1,259

                        

                        

                        

                        845Total revenues

                        

                        306,168

                        

                        

                        

                        266,244

                        

                        

                        

                        598,043

                        

                        

                        

                        514,913Expenses:Hotel departmental expense

                        

                        100,137

                        

                        

                        

                        85,548

                        

                        

                        

                        197,263

                        

                        

                        

                        163,813Other property related costs

                        

                        76,574

                        

                        

                        

                        68,584

                        

                        

                        

                        153,699

                        

                        

                        

                        137,142Management and franchise fees

                        

                        15,973

                        

                        

                        

                        13,943

                        

                        

                        

                        31,875

                        

                        

                        

                        27,066Taxes, insurance and lease expense

                        

                        28,862

                        

                        

                        

                        31,422

                        

                        

                        

                        58,166

                        

                        

                        

                        60,651Corporate expenses

                        

                        4,864

                        

                        

                        

                        5,255

                        

                        

                        

                        11,691

                        

                        

                        

                        12,041Depreciation and amortization

                        

                        35,072

                        

                        

                        

                        27,155

                        

                        

                        

                        68,840

                        

                        

                        

                        52,205Impairment loss

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        17,131

                        

                        

                        

                        -Other expenses

                        

                        900

                        

                        

                        

                        393

                        

                        

                        

                        1,833

                        

                        

                        

                        415Total operating expenses

                        

                        262,382

                        

                        

                        

                        232,300

                        

                        

                        

                        540,498

                        

                        

                        

                        453,333Operating income

                        

                        43,786

                        

                        

                        

                        33,944

                        

                        

                        

                        57,545

                        

                        

                        

                        61,580Interest expense, net

                        

                        (24,769

                        )

                        

                        

                        (23,207

                        )

                        

                        

                        (50,772

                        )

                        

                        

                        (46,079

                        )Income before equity in income from

                            unconsolidated entities, minority interests

                            and gain on sale of assets

                        

                        19,017

                        

                        

                        

                        10,737

                        

                        

                        

                        6,773

                        

                        

                        

                        15,501Equity in income from unconsolidated entities

                        

                        2,331

                        

                        

                        

                        3,710

                        

                        

                        

                        1,709

                        

                        

                        

                        16,480Minority interests

                        

                        (890

                        )

                        

                        

                        506

                        

                        

                        

                        (961

                        )

                        

                        

                        787Gain on involuntary conversion

                        

                        3,095

                        

                        

                        

                        -

                        

                        

                        

                        3,095

                        

                        

                        

                        -Gain on sale of condominiums

                        

                        -

                        

                        

                        

                        14,858

                        

                        

                        

                        -

                        

                        

                        

                        18,139Income from continuing operations

                        

                        23,553

                        

                        

                        

                        29,811

                        

                        

                        

                        10,616

                        

                        

                        

                        50,907Discontinued operations

                        

                        -

                        

                        

                        

                        26,350

                        

                        

                        

                        (13

                        )

                        

                        

                        34,840Net income

                        

                        23,553

                        

                        

                        

                        56,161

                        

                        

                        

                        10,603

                        

                        

                        

                        85,747Preferred distributions

                        

                        (9,678

                        )

                        

                        

                        (9,678

                        )

                        

                        

                        (19,356

                        )

                        

                        

                        (19,356

                        )Net income (loss) applicable to common unitholders

                        $

                        13,875

                        

                        

                        $

                        46,483

                        

                        

                        $

                        (8,753

                        )

                        

                        $

                        66,391Basic per common unit data:Net income (loss) from continuing operations

                        $

                        0.22

                        

                        

                        $

                        0.32

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        0.50Net income (loss)

                        $

                        0.22

                        

                        

                        $

                        0.74

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        1.06Basic weighted average common units outstanding

                        

                        63,176

                        

                        

                        

                        62,941

                        

                        

                        

                        63,173

                        

                        

                        

                        62,866Diluted per common unit data:Net income (loss) from continuing operations

                        $

                        0.22

                        

                        

                        

                        0.32

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        0.50Net income (loss)

                        $

                        0.22

                        

                        

                        

                        0.73

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        1.05Diluted weighted average common units outstanding

                        

                        63,322

                        

                        

                        

                        63,387

                        

                        

                        

                        63,173

                        

                        

                        

                        63,254Cash distributions declared on common units

                        $

                        0.35

                        

                        

                        $

                        0.30

                        

                        

                        $

                        0.70

                        

                        

                        $

                        0.55
  The accompanying notes are an integral part of these consolidated financial statements.  4
  
   FELCOR LODGING LIMITED PARTNERSHIP  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Three and Six Months Ended June 30, 2008 and 2007 (unaudited, in thousands)   Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Net income

                        $

                        23,553

                        

                        

                        $

                        56,161

                        

                        

                        $

                        10,603

                        

                        

                        $

                        85,747Foreign currency translation adjustment

                        

                        242

                        

                        

                        

                        6,846

                        

                        

                        

                        (1,488

                        )

                        

                        

                        7,179Comprehensive income

                        $

                        23,795

                        

                        

                        $

                        63,007

                        

                        

                        $

                        9,115

                        

                        

                        $

                        92,926
                     The accompanying notes are an integral part of these consolidated financial statements. 5
  
 FELCOR LODGING LIMITED PARTNERSHIP  CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2008 and 2007 (unaudited, in thousands)  Six Months Ended June 30,2008

                        

                        2007Cash flows from operating activities:Net income

                        $

                        10,603

                        

                        

                        $

                        85,747Adjustments to reconcile net income to net cash provided by (used in)

                            operating activities:Depreciation and amortization

                        

                        68,840

                        

                        

                        

                        52,219Gain on involuntary conversion

                        

                        (3,095

                        )

                        

                        

                        -Gain on sale of assets

                        

                        -

                        

                        

                        

                        (46,627

                        )Amortization of deferred financing fees and debt discount

                        

                        1,459

                        

                        

                        

                        1,342Amortization of unearned officers’ and directors’ compensation

                        

                        2,722

                        

                        

                        

                        2,614Equity in income from unconsolidated entities

                        

                        (1,709

                        )

                        

                        

                        (16,480

                        )Distributions of income from unconsolidated entities

                        

                        1,344

                        

                        

                        

                        660Charges related to early debt extinguishment

                        

                        -

                        

                        

                        

                        901Impairment loss on hotels

                        

                        17,131

                        

                        

                        

                        -Minority interests

                        

                        961

                        

                        

                        

                        294Changes in assets and liabilities:Accounts receivable

                        

                        (7,688

                        )

                        

                        

                        (8,934

                        )Restricted cash – operations

                        

                        (1,337

                        )

                        

                        

                        189Other assets

                        

                        4,219

                        

                        

                        

                        (5,845

                        )Accrued expenses and other liabilities

                        

                        4,103

                        

                        

                        

                        (3,560

                        )Net cash flow provided by operating activities

                        

                        97,553

                        

                        

                        

                        62,520Cash flows from investing activities:Improvements and additions to hotels

                        

                        (73,625

                        )

                        

                        

                        (137,129

                        )Additions to condominium project

                        

                        (510

                        )

                        

                        

                        (8,046

                        )Proceeds from sale of assets

                        

                        -

                        

                        

                        

                        165,107Proceeds from sale of condominiums

                        

                        -

                        

                        

                        

                        19,000Proceeds received from property damage insurance

                        

                        2,005

                        

                        

                        

                        1,812Decrease in restricted cash – investing

                        

                        (1

                        )

                        

                        

                        7,152Redemption of investment securities

                        

                        3,560

                        

                        

                        

                        -Cash distributions from unconsolidated entities

                        

                        21,608

                        

                        

                        

                        8,812Capital contribution to unconsolidated entities

                        

                        (5,995

                        )

                        

                        

                        -Net cash flow provided by (used in) investing activities

                        

                        (52,958

                        )

                        

                        

                        56,708Cash flows from financing activities:Proceeds from borrowings

                        

                        103,258

                        

                        

                        

                        7,142Repayment of borrowings

                        

                        (68,599

                        )

                        

                        

                        (13,765

                        )Payment of deferred financing fees

                        

                        (7

                        )

                        

                        

                        (248

                        )Exercise of FelCor stock options

                        

                        -

                        

                        

                        

                        5,960Distributions paid to other partnerships’ minority holders

                        

                        (1,944

                        )

                        

                        

                        (5,030

                        )Contributions from minority interest holders

                        

                        537

                        

                        

                        

                        1,407Distributions paid to preferred unitholders

                        

                        (19,356

                        )

                        

                        

                        (19,356

                        )Distributions paid to common unitholders

                        

                        (45,005

                        )

                        

                        

                        (31,805

                        )Net cash flow used in financing activities

                        

                        (31,116

                        )

                        

                        

                        (55,695

                        )Effect of exchange rate changes on cash

                        

                        (226

                        )

                        

                        

                        914Net change in cash and cash equivalents

                        

                        13,253

                        

                        

                        

                        64,447Cash and cash equivalents at beginning of periods

                        

                        57,609

                        

                        

                        

                        124,179Cash and cash equivalents at end of periods

                        $

                        70,862

                        

                        

                        $

                        188,626Supplemental cash flow information — interest paid

                        $

                        52,426

                        

                        

                        $

                        52,068
  The accompanying notes are an integral part of these consolidated financial statements.  6
  
 1.

                        Organization
  At June 30, 2008, we held ownership interests in 89 hotels and were the largest owner of upper-upscale, all-suite hotels. Our sole general partner is FelCor Lodging Trust Incorporated, or FelCor, a real estate investment trust, or REIT. At June 30, 2008, FelCor owned a greater than 97% interest in our operations.  Of the 89 hotels in which we had an ownership interest at June 30, 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 ownership interests 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 but were reported 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.  At June 30, 2008, we had an aggregate of 64,522,043 redeemable and common units outstanding.  The following table reflects the distribution, by brand, of our Consolidated Hotels at June 30, 2008:   Brand

                        Hotels

                        

                        RoomsEmbassy Suites Hotels®

                        47

                        

                        12,129Holiday Inn®

                        17

                        

                        6,306Sheraton® and Westin®

                        9

                        

                        3,217Doubletree®

                        7

                        

                        1,472Renaissance® and Hotel 480 Union Square

                        3

                        

                        1,324Hilton®

                        2

                        

                        559Total hotels

                        85
  Our Consolidated Hotels are located in the United States (23 states) and Canada (two hotels in Ontario), with concentrations in California (15 hotels), Florida (14 hotels) and Texas (11 hotels). Approximately 52% of our hotel room revenues in continuing operations during the first six months of 2008 were generated
            from hotels in these states.  At June 30, 2008, of our Consolidated Hotels, (i) subsidiaries of Hilton Hotels Corporation managed 54, (ii) subsidiaries of InterContinental Hotels Group PLC, or IHG, managed 17, (iii) subsidiaries of Starwood Hotels & Resorts Worldwide, Inc. managed nine, (iv) subsidiaries of Marriott International Inc. managed
            three hotels, and (v) independent management companies managed two.  We entered into management agreements for our three Marriott-managed hotels in December 2007 (two Renaissance Resorts and an independent hotel, operating as Hotel 480 Union Square). Hotels managed by Marriott are accounted for on a fiscal year comprised of 52 or 53 weeks ending on the Friday closest to December 31. Our
            fiscal quarter ended June 30, 2008, includes the results of operations for our Marriott-managed hotels for the twelve-week period ended June 15, 2008.  7
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1. Organization – (continued)  The information in our consolidated financial statements for the three and six months ended June 30, 2008 and 2007 is unaudited. Preparing financial 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 three and six months ended June 30, 2008 and 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 for the year ended December 31, 2007, included in our Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2008 are not necessarily indicative of actual operating results for the entire year.  2.

                        Investment in Unconsolidated Entities
  We owned 50% interests in joint venture entities that owned 17 hotels at June 30, 2008 and at December 31, 2007. We also owned a 50% interest in joint venture entities that own real estate in Myrtle Beach, South Carolina, provide condominium management services and lease three 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 the depreciation of our excess basis in investment in unconsolidated entities when compared to the historical basis of the assets recorded by the joint ventures.  Summarized combined financial information for 100% of these unconsolidated entities is as follows (in thousands):  June 30,

                            2008

                        

                        December31, 2007Balance sheet information:Investment in hotels, net of accumulated depreciation

                        $

                        298,179

                        

                        $

                        288,066Total assets

                        $

                        333,489

                        

                        $

                        319,295Debt

                        $

                        226,752

                        

                        $

                        188,356Total liabilities

                        $

                        238,718

                        

                        $

                        196,382Equity

                        $

                        94,771

                        

                        $

                        122,913
  Debt of our unconsolidated entities at June 30, 2008 and December 31, 2007, consisted entirely of non-recourse mortgage debt.  8
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2.

                        Investment in Unconsolidated Entities – (continued)
  The following table sets forth summarized combined statement of operations information for our unconsolidated entities (in thousands):  Three Months Ended

                            June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Total revenues

                        $

                        27,010

                        

                        

                        $

                        30,527

                        

                        

                        $

                        45,953

                        

                        

                        $

                        52,407Net income

                        $

                        5,465

                        

                        

                        $

                        8,354

                        

                        

                        $

                        5,286

                        

                        

                        $

                        28,106Net income attributable to FelCor LP

                        $

                        2,798

                        

                        

                        $

                        4,177

                        

                        

                        $

                        2,643

                        

                        

                        $

                        14,053Additional gain on sale related to basis difference

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        3,336Depreciation of cost in excess of book value

                        

                        (467

                        )

                        

                        

                        (467

                        )

                        

                        

                        (934

                        )

                        

                        

                        (909

                        )Equity in income from unconsolidated entities

                        $

                        2,331

                        

                        

                        $

                        3,710

                        

                        

                        $

                        1,709

                        

                        

                        $

                        16,480
  The following table summarizes the components of our investment in unconsolidated entities (in thousands):
  June 30,

                            2008

                        

                        December 31, 2007Hotel related investments

                        $

                        38,571

                        

                        

                        $

                        52,491Cost in excess of book value of hotel investments

                        

                        61,812

                        

                        

                        

                        62,746Land and condominium investments

                        

                        11,642

                        

                        

                        

                        12,036$

                        112,025

                        

                        

                        $

                        127,273
  A summary of the components of our equity in income (loss) from unconsolidated entities are as follows (in thousands):  Three Months Ended

                            June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Hotel investments

                        $

                        2,071

                        

                        

                        $

                        3,327

                        

                        

                        $

                        2,103

                        

                        

                        $

                        16,662Hotel lessee investments

                        

                        260

                        

                        

                        

                        383

                        

                        

                        

                        (394

                        )

                        

                        

                        (182

                        )$

                        2,331

                        

                        

                        $

                        3,710

                        

                        

                        $

                        1,709

                        

                        

                        $

                        16,480
  In the first quarter of 2007, a 50%-owned joint venture sold the Embassy Suites Hotel in Covina, California. The sale of this hotel resulted in a gain of $15.6 million for this venture. Our basis in this unconsolidated hotel was lower than the venture’s basis, resulting in additional gain on sale.  In January 2008, a 50%-owned joint venture refinanced a maturing non-recourse mortgage debt secured by eight unconsolidated hotels. Of the $140 million in gross proceeds, $87 million were used to repay the maturing debt, and the balance was either retained in the venture or distributed to the joint venture
            partners. We received $19.0 million from this distribution.  In January 2008, a 50%-owned joint venture repaid (with contributions from the joint venturers) a maturing $12.0 million non-recourse loan secured by one hotel. Our contribution was $6.0 million.  9
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  3.Debt  Debt at June 30, 2008 and December 31, 2007 consisted of the following (in thousands):   Balance OutstandingEncumbered

                            Hotels

                        

                        Interest Rate at June 30, 2008

                        

                        Maturity Date

                        

                        

                        June 30, 2008

                        

                        

                        December 31, 2007Line of credit(a)

                        

                        none

                        

                        L + 0.80

                        

                        August 2011

                        

                        $

                        45,000

                        

                        $

                        -Senior term notes

                        

                        none

                        

                        8.50(b)

                        

                        June 2011

                        

                        

                        299,288

                        

                        

                        299,163Senior term notes

                        

                        none

                        

                        L + 1.875

                        

                        December 2011

                        

                        

                        215,000

                        

                        

                        215,000Other

                        

                        none

                        

                        L + 0.40

                        

                        July 2008(c)

                        

                        

                        4,554

                        

                        

                        8,350Total line of credit and senior debt(d)

                        

                        

                        

                        6.71

                        

                        

                        

                        

                        563,842

                        

                        

                        522,513Mortgage debt

                        

                        12 hotels

                        

                        L + 0.93(e)

                        

                        November 2009(f)

                        

                        

                        250,000

                        

                        

                        250,000Mortgage debt

                        

                        7 hotels

                        

                        6.57

                        

                        June 2009-2014

                        

                        

                        88,144

                        

                        

                        89,087Mortgage debt

                        

                        7 hotels

                        

                        7.32

                        

                        April 2009

                        

                        

                        119,013

                        

                        

                        120,827Mortgage debt

                        

                        8 hotels

                        

                        8.70

                        

                        May 2010

                        

                        

                        164,157

                        

                        

                        165,981Mortgage debt

                        

                        6 hotels

                        

                        8.73

                        

                        May 2010

                        

                        

                        117,962

                        

                        

                        119,568Mortgage debt

                        

                        2 hotels

                        

                        L + 1.55(g)

                        

                        May 2009(h)

                        

                        

                        176,124

                        

                        

                        175,980Mortgage debt

                        

                        1 hotel

                        

                        L + 2.85

                        

                        August 2008(c)

                        

                        

                        15,500

                        

                        

                        15,500Mortgage debt

                        

                        1 hotel

                        

                        5.81

                        

                        July 2016

                        

                        

                        12,326

                        

                        

                        12,509Other

                        

                        1 hotel

                        

                        various

                        

                        various

                        

                        

                        3,467

                        

                        

                        3,642Total mortgage debt(d)

                        

                        45 hotels

                        

                        5.98

                        

                        

                        

                        

                        946,693

                        

                        

                        953,094Total

                        

                        

                        

                        6.25%

                        

                        

                        

                        $

                        1,510,535

                        

                        $

                        1,475,607
  (a)

                        We have $250 million of borrowing capacity under our line of credit. The interest rate can range from 80 to 150 basis points over 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)

                        This loan was repaid in full in July 2008.
 (d)

                        Interest rates are calculated based on the weighted average debt outstanding at June 30, 2008.
 (e)

                        We have purchased an interest rate cap at 7.8% for this notional amount that expires in November 2009.
 (f)

                        This loan provides us three one-year extension options that permit, in our sole discretion, the maturity to be extended to 2011. In July 2008, we exercised our first one-year option to extend the maturity to November 2009.
 (g)

                        We have purchased interest rate caps at 6.25% for $177 million aggregate notional amounts that expire in May 2009.
 (h)

                        These loans provide us three one-year extension options that permit, in our sole discretion, the maturity to be extended to 2012.
  We reported interest expense of $24.8 million and $23.2 million for the three months ended June 30, 2008 and 2007, respectively, which is net of: (i) interest income of $0.4 million and $1.4 million, and (ii) capitalized interest of $0.3 million and $1.2 million, respectively. We reported
            interest expense of $50.8 million and $46.1 million for the six months ended June 30, 2008 and 2007, respectively, which is net of: (i) interest income of $1.0 million and $2.7 million, and (ii) capitalized interest of $0.7 million and $2.8 million, respectively.  10
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  4.

                        Hotel Operating Revenue, Departmental Expenses and Other Property Operating Costs
  Our 2008 financial statements include results of operations from the two hotels (the Renaissance 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 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

                            June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Room revenue

                        $

                        239,689

                        

                        

                        $

                        216,813

                        

                        

                        $

                        469,821

                        

                        

                        $

                        421,135Food and beverage revenue

                        

                        49,010

                        

                        

                        

                        35,212

                        

                        

                        

                        95,518

                        

                        

                        

                        66,985Other operating departments

                        

                        16,538

                        

                        

                        

                        13,504

                        

                        

                        

                        31,445

                        

                        

                        

                        25,948Total hotel operating revenue

                        $

                        305,237

                        

                        

                        $

                        265,529

                        

                        

                        $

                        596,784

                        

                        

                        $

                        514,068
  For the first six months of both 2008 and 2007, more than 99% 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, which are recorded as a bad debt expense. The remainder of our revenue was derived from other sources.  The following table summarizes the components of hotel departmental expenses from continuing operations (in thousands):  Three Months Ended June 30,2008

                        

                        2007Amount

                        

                        % of Total Hotel

                            Operating Revenue

                        

                        Amount

                        

                        % of Total Hotel

                            Operating RevenueRoom

                        $

                        56,871

                        

                        

                        18.6

                        %

                        

                        $

                        53,058

                        

                        

                        20.0

                        %Food and beverage

                        

                        36,096

                        

                        

                        11.8

                        

                        

                        

                        26,655

                        

                        

                        10.0Other operating departments

                        

                        7,170

                        

                        

                        2.4

                        

                        

                        

                        5,835

                        

                        

                        2.2Total hotel departmental expenses

                        $

                        100,137

                        

                        

                        32.8

                        %

                        

                        $

                        85,548

                        

                        

                        32.2

                        %
  Six Months Ended June 30,2008

                        

                        2007Amount

                        

                        % of Total Hotel

                            Operating Revenue

                        

                        Amount

                        

                        % of Total Hotel

                            Operating RevenueRoom

                        $

                        111,523

                        

                        

                        18.7

                        %

                        

                        $

                        101,841

                        

                        

                        19.8

                        %Food and beverage

                        

                        71,542

                        

                        

                        12.0

                        

                        

                        

                        51,190

                        

                        

                        10.0Other operating departments

                        

                        14,198

                        

                        

                        2.4

                        

                        

                        

                        10,782

                        

                        

                        2.1Total hotel departmental expenses

                        $

                        197,263

                        

                        

                        33.1

                        %

                        

                        $

                        163,813

                        

                        

                        31.9

                        %
   11
  
 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 other property operating costs from continuing operations (in thousands):  Three Months Ended June 30,2008

                        

                        2007Amount

                        

                        % of Total Hotel

                            Operating Revenue

                        

                        Amount

                        

                        % of Total Hotel

                            Operating RevenueHotel general and administrative expense

                        $

                        24,887

                        

                        

                        8.2

                        %

                        

                        $

                        21,452

                        

                        

                        8.1

                        %Marketing

                        

                        24,052

                        

                        

                        7.9

                        

                        

                        

                        21,459

                        

                        

                        8.1Repair and maintenance

                        

                        14,390

                        

                        

                        4.7

                        

                        

                        

                        13,908

                        

                        

                        5.2Utilities

                        

                        13,245

                        

                        

                        4.3

                        

                        

                        

                        11,765

                        

                        

                        4.4Total other property operating costs

                        $

                        76,574

                        

                        

                        25.1

                        %

                        

                        $

                        68,584

                        

                        

                        25.8

                        %
  Six Months Ended June 30,2008

                        

                        2007Amount

                        

                        % of Total Hotel

                            Operating Revenue

                        

                        Amount

                        

                        % of Total Hotel

                            Operating RevenueHotel general and administrative expense

                        $

                        50,148

                        

                        

                        8.4

                        %

                        

                        $

                        43,893

                        

                        

                        8.6

                        %Marketing

                        

                        47,990

                        

                        

                        8.1

                        

                        

                        

                        42,195

                        

                        

                        8.2Repair and maintenance

                        

                        29,151

                        

                        

                        4.9

                        

                        

                        

                        27,461

                        

                        

                        5.3Utilities

                        

                        26,410

                        

                        

                        4.4

                        

                        

                        

                        23,593

                        

                        

                        4.6Total other property operating costs

                        $

                        153,699

                        

                        

                        25.8

                        %

                        

                        $

                        137,142

                        

                        

                        26.7

                        %
  Hotel departmental expenses and other property operating costs include hotel employee compensation and benefit expenses of $86.1 million and $74.0 million for the three months ended June 30, 2008 and 2007, respectively, and $170.8 million and $145.4 million for the six months ended June 30, 2008
            and 2007, respectively.  12
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  5.

                        Taxes, Insurance and Lease Expense
  Taxes, insurance and lease expense from continuing operations were comprised of the following (in thousands):  Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Operating lease expense(a)

                        $

                        18,718

                        

                        

                        $

                        19,524

                        

                        

                        $

                        33,553

                        

                        

                        $

                        35,687Real estate and other taxes

                        

                        6,133

                        

                        

                        

                        8,618

                        

                        

                        

                        17,008

                        

                        

                        

                        17,220Property insurance, general liability insurance and other

                        

                        4,011

                        

                        

                        

                        3,280

                        

                        

                        

                        7,605

                        

                        

                        

                        7,744Total taxes, insurance and lease expense

                        $

                        28,862

                        

                        

                        $

                        31,422

                        

                        

                        $

                        58,166

                        

                        

                        $

                        60,651
  (a)

                        Includes hotel lease expense of $15.7 million and $17.3 million associated with 13 hotels leased by us from unconsolidated subsidiaries and $3.0 million and $2.3 million of ground lease expense for the three months ended June 30, 2008 and 2007, respectively, and hotel lease expense of $27.9 million and
                            $31.5 million associated with 13 hotels leased by us from unconsolidated subsidiaries and $5.6 million and $4.2 million of ground lease expense for the six months ended June 30, 2008 and 2007, respectively. Operating lease expense includes percentage rent (based on operating results) of $10.8 million and $11.2 million, respectively, for the three months ended June 30, 2008 and 2007, and $17.4 million and
                            $19.0 million, respectively, for the six months ended June 30, 2008 and 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 SFAS No. 144 for purposes of determining impairment charges and reporting discontinued operations.  In the first quarter of 2008, we identified six hotels as candidates to be sold. We tested these hotels for impairment under the provisions of SFAS No. 144 using undiscounted estimated cash flows over a revised estimated remaining hold period. Of the hotels tested, two hotels failed the test under SFAS No. 144, which resulted in an impairment charge during the first quarter
            ended March 31, 2008 of $17.1 million to write down these hotel assets to our then current estimate of their fair market value before selling expenses.  The six hotels are 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 industry weakens, or if we shorten our contemplated holding period for additional hotels.  7.

                        Gain on Involuntary Conversion
  During the second quarter of 2008, we reached a final settlement of our insurance claims related to our 2005 hurricane losses and realized a gain from involuntary conversion of $3.1 million as the final proceeds received exceeded our estimated basis in the assets requiring replacement.  13
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  8.Condominium Project  We completed development of our 184-unit Royale Palms condominium project in Myrtle Beach, South Carolina in 2007. In the second quarter of 2007, we recognized a gain on sale of condominiums of $14.9 million, under the completed contract method, and for full year 2007, we recognized $18.6 million of gains, net of $1.0 million of tax. At June 30, 2008, we had five
            remaining condominium units included in other assets that we expect to sell on a selective basis to maximize the selling price.  9.

                        Discontinued Operations
  Results of operations of eleven hotels sold in 2007 are included in discontinued operations. The following table summarizes the condensed financial information for those hotels (in thousands):  Three Months Ended

                            June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Operating revenue

                        $

                        -

                        

                        

                        $

                        10,949

                        

                        

                        $

                        -

                        

                        

                        $

                        26,447Operating expenses

                        

                        -

                        

                        

                        

                        (6,215

                        )

                        

                        

                        (13

                        )

                        

                        

                        (18,094

                        )Operating income (loss)

                        

                        -

                        

                        

                        

                        4,734

                        

                        

                        

                        (13

                        )

                        

                        

                        8,353Interest income (expense), net

                        

                        -

                        

                        

                        

                        6

                        

                        

                        

                        -

                        

                        

                        

                        (19

                        )Gain (loss) on sale of hotels, net of income tax

                        

                        -

                        

                        

                        

                        22,457

                        

                        

                        

                        -

                        

                        

                        

                        28,488Loss on early extinguishment of debt

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (901

                        )Minority interests

                        

                        -

                        

                        

                        

                        (847

                        )

                        

                        

                        -

                        

                        

                        

                        (1,081

                        )Income (loss) from discontinued operations

                        $

                        -

                        

                        

                        $

                        26,350

                        

                        

                        $

                        (13

                        )

                        

                        $

                        34,840
  In the second quarter of 2007, we sold eight hotels for aggregate proceeds of $126.3 million. In the first six months of 2007, we sold ten consolidated hotels for aggregate gross proceeds of $169.0 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 did not have any hotels designated as held for sale at June 30, 2008, and we have not sold any hotels in 2008. We include the operating results of hotels held for sale in discontinued operations. We consider a hotel as “held for sale” once we determine the criteria for this classification under the
            provisions of SAFS No. 144 has been met.  14
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   10.

                        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

                            June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Numerator:Income from continuing operations

                        $

                        23,553

                        

                        

                        $

                        29,811

                        

                        

                        $

                        10,616

                        

                        

                        $

                        50,907Less: Preferred distributions

                        

                        (9,678

                        )

                        

                        

                        (9,678

                        )

                        

                        

                        (19,356

                        )

                        

                        

                        (19,356

                        )Income (loss) from continuing operations

                            applicable to common unitholders

                        

                        13,875

                        

                        

                        

                        20,133

                        

                        

                        

                        (8,740

                        )

                        

                        

                        31,551Discontinued operations

                        

                        -

                        

                        

                        

                        26,350

                        

                        

                        

                        (13

                        )

                        

                        

                        34,840Net income (loss) applicable to common

                            unitholders

                        $

                        13,875

                        

                        

                        $

                        46,483

                        

                        

                        $

                        (8,753

                        )

                        

                        $

                        66,391Denominator:Denominator for basic earnings per unit

                        

                        63,176

                        

                        

                        

                        62,941

                        

                        

                        

                        63,173

                        

                        

                        

                        62,866Denominator for diluted earnings per unit

                        

                        63,322

                        

                        

                        

                        63,387

                        

                        

                        

                        63,173

                        

                        

                        

                        63,254Earnings (loss) per unit data:Basic:Income (loss) from continuing operations

                        $

                        0.22

                        

                        

                        $

                        0.32

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        0.50Discontinued operations

                        $

                        -

                        

                        

                        $

                        0.42

                        

                        

                        $

                        -

                        

                        

                        $

                        0.56Net income (loss)

                        $

                        0.22

                        

                        

                        $

                        0.74

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        1.06Diluted:Income (loss) from continuing operations

                        $

                        0.22

                        

                        

                        $

                        0.32

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        0.50Discontinued operations

                        $

                        -

                        

                        

                        $

                        0.41

                        

                        

                        $

                        -

                        

                        

                        $

                        0.55Net income (loss)

                        $

                        0.22

                        

                        

                        $

                        0.73

                        

                        

                        $

                        (0.14

                        )

                        

                        $

                        1.05
  The following securities, which could potentially dilute basic earnings (loss) per unit in the future, were not included in the computation of diluted earnings (loss) per unit, because they would have been antidilutive for the periods presented (in thousands):  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007FelCor’s restricted stock granted but not vested

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        120

                        

                        

                        

                        -Series A convertible preferred units

                        

                        9,985

                        

                        

                        

                        9,985

                        

                        

                        

                        9,985

                        

                        

                        

                        9,985
  Series A preferred distributions that would be excluded from net income (loss) applicable to common unitholders, if these Series A preferred units were dilutive, were $6.3 million for both the three months ended June 30, 2008 and 2007, and $12.6 million for the six months ended June 30, 2008 and
            2007.  15
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  11.Application of New Accounting Standards  The FASB issued Statement No. 157, Fair Value Measurements ("SFAS 157") which was effective for us on January 1, 2008. 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 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 has or will have a material effect on our financial position and results of operations.  The FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"), which was effective for us on January 1, 2008. SFAS 159 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. We did not make the one-time election upon adoption and therefore do not believe that the adoption of this standard has a material effect on our financial position and results of operations.  In December 2007, the FASB issued Statement No. 141 (revised 2007), "Business Combinations" ("SFAS 141(R)"), which establishes principles and requirements for how an acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the
            acquiree and goodwill acquired in a business combination. This statement is effective for us for business combinations for which the acquisition date is on or after January 1, 2009. We are currently assessing the potential impact that the adoption of SFAS 141(R) will have on our financial position and results of operations.  In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51” (“SFAS 160”), which establishes and expands accounting and reporting standards for minority interests, which will be recharacterized as noncontrolling interests, in a subsidiary and the deconsolidation of a
            subsidiary. SFAS 160 is effective for us on or after January 1, 2009. We are currently assessing the potential impact that the adoption of SFAS 160 will have on our financial position and results of operations.  12.

                        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.  16
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information  CONSOLIDATING BALANCE SHEET June 30, 2008 (in thousands)  ASSETSFelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedNet investment in hotel properties

                        $

                        120,475

                        

                        

                        $

                        969,435

                        

                        $

                        1,289,151

                        

                        

                        $

                        -

                        

                        

                        $

                        2,379,061Equity investment in consolidated entities

                        

                        1,361,450

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (1,361,450

                        )

                        

                        

                        -Investment in unconsolidated entities

                        

                        83,216

                        

                        

                        

                        27,202

                        

                        

                        1,607

                        

                        

                        

                        -

                        

                        

                        

                        112,025Cash and cash equivalents

                        

                        16,805

                        

                        

                        

                        51,775

                        

                        

                        2,282

                        

                        

                        

                        -

                        

                        

                        

                        70,862Restricted cash

                        

                        204

                        

                        

                        

                        3,663

                        

                        

                        12,317

                        

                        

                        

                        -

                        

                        

                        

                        16,184Accounts receivable

                        

                        4,424

                        

                        

                        

                        42,620

                        

                        

                        (20

                        )

                        

                        

                        -

                        

                        

                        

                        47,024Deferred expenses

                        

                        3,148

                        

                        

                        

                        197

                        

                        

                        3,404

                        

                        

                        

                        -

                        

                        

                        

                        6,749Other assets

                        

                        5,456

                        

                        

                        

                        21,029

                        

                        

                        4,648

                        

                        

                        

                        -

                        

                        

                        

                        31,133Total assets

                        $

                        1,595,178

                        

                        

                        $

                        1,115,921

                        

                        $

                        1,313,389

                        

                        

                        $

                        (1,361,450

                        )

                        

                        $

                        2,663,038LIABILITES AND PARTNERS’ CAPITALDebt

                        $

                        579,342

                        

                        

                        $

                        122,223

                        

                        $

                        808,970

                        

                        

                        $

                        -

                        

                        

                        $

                        1,510,535Distributions payable

                        

                        30,654

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        30,654Accrued expenses and other liabilities

                        

                        19,517

                        

                        

                        

                        98,619

                        

                        

                        13,230

                        

                        

                        

                        -

                        

                        

                        

                        131,366Total liabilities

                        

                        629,513

                        

                        

                        

                        220,842

                        

                        

                        822,200

                        

                        

                        

                        -

                        

                        

                        

                        1,672,555Redeemable units, at redemption value

                        

                        14,217

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        14,217Minority interest – other partnerships

                        

                        -

                        

                        

                        

                        640

                        

                        

                        24,178

                        

                        

                        

                        -

                        

                        

                        

                        24,818Preferred units

                        

                        478,774

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        478,774Common units

                        

                        472,674

                        

                        

                        

                        868,477

                        

                        

                        467,011

                        

                        

                        

                        (1,361,450

                        )

                        

                        

                        446,712Accumulated other comprehensive income

                        

                        -

                        

                        

                        

                        25,962

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        25,962Total partners’ capital

                        

                        951,448

                        

                        

                        

                        894,439

                        

                        

                        467,011

                        

                        

                        

                        (1,361,450

                        )

                        

                        

                        951,448Total liabilities, redeemable units

                            and partners' capital

                        $

                        1,595,178

                        

                        

                        $

                        1,115,921

                        

                        $

                        1,313,389

                        

                        

                        $

                        (1,361,450

                        )

                        

                        $

                        2,663,038
   17
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2007 (in thousands)  ASSETSFelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedNet investment in hotel properties

                        $

                        122,225

                        

                        

                        $

                        973,614

                        

                        $

                        1,304,218

                        

                        

                        $

                        -

                        

                        

                        $

                        2,400,057Equity investment in consolidated entities

                        

                        1,365,512

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (1,365,512

                        )

                        

                        

                        -Investment in unconsolidated entities

                        

                        97,810

                        

                        

                        

                        27,820

                        

                        

                        1,643

                        

                        

                        

                        -

                        

                        

                        

                        127,273Cash and cash equivalents

                        

                        7,889

                        

                        

                        

                        43,305

                        

                        

                        6,415

                        

                        

                        

                        -

                        

                        

                        

                        57,609Restricted cash

                        

                        364

                        

                        

                        

                        3,790

                        

                        

                        10,692

                        

                        

                        

                        -

                        

                        

                        

                        14,846Accounts receivable

                        

                        2,508

                        

                        

                        

                        35,198

                        

                        

                        165

                        

                        

                        

                        -

                        

                        

                        

                        37,871Deferred expenses

                        

                        3,839

                        

                        

                        

                        344

                        

                        

                        3,966

                        

                        

                        

                        -

                        

                        

                        

                        8,149Other assets

                        

                        14,593

                        

                        

                        

                        20,262

                        

                        

                        3,175

                        

                        

                        

                        -

                        

                        

                        

                        38,030Total assets

                        $

                        1,614,740

                        

                        

                        $

                        1,104,333

                        

                        $

                        1,330,274

                        

                        

                        $

                        (1,365,512

                        )

                        

                        $

                        2,683,835LIABILITES AND PARTNERS’ CAPITALDebt

                        $

                        538,012

                        

                        

                        $

                        124,469

                        

                        $

                        813,126

                        

                        

                        $

                        -

                        

                        

                        $

                        1,475,607Distributions payable

                        

                        30,493

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        30,493Accrued expenses and other liabilities

                        

                        27,923

                        

                        

                        

                        91,880

                        

                        

                        14,356

                        

                        

                        

                        -

                        

                        

                        

                        134,159Total liabilities

                        

                        596,428

                        

                        

                        

                        216,349

                        

                        

                        827,482

                        

                        

                        

                        -

                        

                        

                        

                        1,640,259Redeemable units, at redemption value

                        

                        21,109

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        21,109Minority interest – other partnerships

                        

                        -

                        

                        

                        

                        70

                        

                        

                        25,194

                        

                        

                        

                        -

                        

                        

                        

                        25,264Preferred units

                        

                        478,774

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        478,774Common units

                        

                        518,429

                        

                        

                        

                        860,464

                        

                        

                        477,598

                        

                        

                        

                        (1,365,512

                        )

                        

                        

                        490,979Accumulated other comprehensive income

                        

                        -

                        

                        

                        

                        27,450

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        27,450Total partners’ capital

                        

                        997,203

                        

                        

                        

                        887,914

                        

                        

                        477,598

                        

                        

                        

                        (1,365,512

                        )

                        

                        

                        997,203Total liabilities, redeemable units

                            and partners' capital

                        $

                        1,614,740

                        

                        

                        $

                        1,104,333

                        

                        $

                        1,330,274

                        

                        

                        $

                        (1,365,512

                        )

                        

                        $

                        2,683,835
   18
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Three Months Ended June 30, 2008 (in thousands)  FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedRevenues:Hotel operating revenue

                        $

                        -

                        

                        

                        $

                        305,237

                        

                        

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        305,237Percentage lease revenue

                        

                        7,258

                        

                        

                        

                        -

                        

                        

                        

                        47,916

                        

                        

                        

                        (55,174

                        )

                        

                        

                        -Other revenue

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        931

                        

                        

                        

                        -

                        

                        

                        

                        931Total revenue

                        

                        7,258

                        

                        

                        

                        305,237

                        

                        

                        

                        48,847

                        

                        

                        

                        (55,174

                        )

                        

                        

                        306,168Expenses:Hotel operating expenses

                        

                        -

                        

                        

                        

                        192,684

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        192,684Taxes, insurance and lease expense

                        

                        1,133

                        

                        

                        

                        76,631

                        

                        

                        

                        6,272

                        

                        

                        

                        (55,174

                        )

                        

                        

                        28,862Corporate expenses

                        

                        259

                        

                        

                        

                        2,997

                        

                        

                        

                        1,608

                        

                        

                        

                        -

                        

                        

                        

                        4,864Depreciation and amortization

                        

                        2,679

                        

                        

                        

                        15,029

                        

                        

                        

                        17,364

                        

                        

                        

                        -

                        

                        

                        

                        35,072Other expenses

                        

                        -

                        

                        

                        

                        103

                        

                        

                        

                        797

                        

                        

                        

                        -

                        

                        

                        

                        900Total operating expenses

                        

                        4,071

                        

                        

                        

                        287,444

                        

                        

                        

                        26,041

                        

                        

                        

                        (55,174

                        )

                        

                        

                        262,382Operating income

                        

                        3,187

                        

                        

                        

                        17,793

                        

                        

                        

                        22,806

                        

                        

                        

                        -

                        

                        

                        

                        43,786Interest expense, net

                        

                        (9,744

                        )

                        

                        

                        (2,825

                        )

                        

                        

                        (12,200

                        )

                        

                        

                        -

                        

                        

                        

                        (24,769

                        )Income (loss) before equity in income

                            from unconsolidated entities and

                            minority interests

                        

                        (6,557

                        )

                        

                        

                        14,968

                        

                        

                        

                        10,606

                        

                        

                        

                        -

                        

                        

                        

                        19,017Equity in income from consolidated entities

                        

                        26,018

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (26,018

                        )

                        

                        

                        -Equity in income (loss) from unconsolidated

                            entities

                        

                        2,087

                        

                        

                        

                        262

                        

                        

                        

                        (18

                        )

                        

                        

                        -

                        

                        

                        

                        2,331Minority interests

                        

                        -

                        

                        

                        

                        (626

                        )

                        

                        

                        (264

                        )

                        

                        

                        -

                        

                        

                        

                        (890

                        )Gain on involuntary conversion

                        

                        2,005

                        

                        

                        

                        145

                        

                        

                        

                        945

                        

                        

                        

                        -

                        

                        

                        

                        3,095Income from continuing operations

                        

                        23,553

                        

                        

                        

                        14,749

                        

                        

                        

                        11,269

                        

                        

                        

                        (26,018

                        )

                        

                        

                        23,553Net income

                        

                        23,553

                        

                        

                        

                        14,749

                        

                        

                        

                        11,269

                        

                        

                        

                        (26,018

                        )

                        

                        

                        23,553Preferred distributions

                        

                        (9,678

                        )

                        

                        

                        -

                        

                        

                        

                        -   -

                        

                        

                        

                        

                        

                        

                        

                        (9,678

                        )Net income applicable to unitholders

                        $

                        13,875

                        

                        

                        $

                        14,749

                        

                        

                        $

                        11,269

                        

                        

                        $

                        (26,018

                        )

                        

                        $

                        13,875
    19
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Three Months Ended June 30, 2007 (in thousands)  FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedRevenues:Hotel operating revenue

                        $

                        -

                        

                        

                        $

                        265,529

                        

                        

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        265,529Percentage lease revenue

                        

                        7,173

                        

                        

                        

                        -

                        

                        

                        

                        38,786

                        

                        

                        

                        (45,959

                        )

                        

                        

                        -Other revenue

                        

                        1

                        

                        

                        

                        -

                        

                        

                        

                        714

                        

                        

                        

                        -

                        

                        

                        

                        715Total revenue

                        

                        7,174

                        

                        

                        

                        265,529

                        

                        

                        

                        39,500

                        

                        

                        

                        (45,959

                        )

                        

                        

                        266,244Expenses:Hotel operating expense

                        

                        -

                        

                        

                        

                        168,075

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        168,075Taxes, insurance and lease expense

                        

                        1,273

                        

                        

                        

                        70,364

                        

                        

                        

                        5,744

                        

                        

                        

                        (45,959

                        )

                        

                        

                        31,422Corporate expenses

                        

                        296

                        

                        

                        

                        3,278

                        

                        

                        

                        1,681

                        

                        

                        

                        -

                        

                        

                        

                        5,255Depreciation

                        

                        2,088

                        

                        

                        

                        13,221

                        

                        

                        

                        11,846

                        

                        

                        

                        -

                        

                        

                        

                        27,155Other expenses

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        393

                        

                        

                        

                        -

                        

                        

                        

                        393Total operating expenses

                        

                        3,657

                        

                        

                        

                        254,938

                        

                        

                        

                        19,664

                        

                        

                        

                        (45,959

                        )

                        

                        

                        232,300Operating income

                        

                        3,517

                        

                        

                        

                        10,591

                        

                        

                        

                        19,836

                        

                        

                        

                        -

                        

                        

                        

                        33,944Interest expense, net

                        

                        (6,456

                        )

                        

                        

                        (1,830

                        )

                        

                        

                        (14,921

                        )

                        

                        

                        -

                        

                        

                        

                        (23,207

                        )Income (loss) before equity in income

                            from unconsolidated entities, minority

                            interests and gain on sale of assets

                        

                        (2,939

                        )

                        

                        

                        8,761

                        

                        

                        

                        4,915

                        

                        

                        

                        -

                        

                        

                        

                        10,737Equity in income from consolidated entities

                        

                        55,296

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (55,296

                        )

                        

                        

                        -Equity in income from unconsolidated entities

                        

                        3,617

                        

                        

                        

                        110

                        

                        

                        

                        (17

                        )

                        

                        

                        -

                        

                        

                        

                        3,710Minority interests in other partnerships

                        

                        -

                        

                        

                        

                        534

                        

                        

                        

                        (28

                        )

                        

                        

                        -

                        

                        

                        

                        506Gain on condominiums

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        14,858

                        

                        

                        

                        -

                        

                        

                        

                        14,858Income from continuing operations

                        

                        55,974

                        

                        

                        

                        9,405

                        

                        

                        

                        19,728

                        

                        

                        

                        (55,296

                        )

                        

                        

                        29,811Discontinued operations from consolidated

                            entities

                        

                        187

                        

                        

                        

                        25,038

                        

                        

                        

                        1,125

                        

                        

                        

                        -

                        

                        

                        

                        26,350Net income

                        

                        56,161

                        

                        

                        

                        34,443

                        

                        

                        

                        20,853

                        

                        

                        

                        (55,296

                        )

                        

                        

                        56,161Preferred distributions

                        

                        (9,678

                        )

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (9,678

                        )Net income applicable to unitholders

                        $

                        46,483

                        

                        

                        $

                        34,443

                        

                        

                        $

                        20,853

                        

                        

                        $

                        (55,296

                        )

                        

                        $

                        46,483
   20
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2008 (in thousands)  FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedRevenues:Hotel operating revenue

                        $

                        -

                        

                        

                        $

                        596,784

                        

                        

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        596,784Percentage lease revenue

                        

                        13,312

                        

                        

                        

                        -

                        

                        

                        

                        100,288

                        

                        

                        

                        (113,600

                        )

                        

                        

                        -Other revenue

                        

                        -

                        

                        

                        

                        4

                        

                        

                        

                        1,255

                        

                        

                        

                        -

                        

                        

                        

                        1,259Total revenue

                        

                        13,312

                        

                        

                        

                        596,788

                        

                        

                        

                        101,543

                        

                        

                        

                        (113,600

                        )

                        

                        

                        598,043Expenses:Hotel operating expenses

                        

                        -

                        

                        

                        

                        382,837

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        382,837Taxes, insurance and lease expense

                        

                        2,488

                        

                        

                        

                        155,519

                        

                        

                        

                        13,759

                        

                        

                        

                        (113,600

                        )

                        

                        

                        58,166Corporate expenses

                        

                        567

                        

                        

                        

                        6,853

                        

                        

                        

                        4,271

                        

                        

                        

                        -

                        

                        

                        

                        11,691Depreciation and amortization

                        

                        5,219

                        

                        

                        

                        29,585

                        

                        

                        

                        34,036

                        

                        

                        

                        -

                        

                        

                        

                        68,840Impairment loss

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        17,131

                        

                        

                        

                        -

                        

                        

                        

                        17,131Other expenses

                        

                        1

                        

                        

                        

                        368

                        

                        

                        

                        1,464

                        

                        

                        

                        -

                        

                        

                        

                        1,833Total operating expenses

                        

                        8,275

                        

                        

                        

                        575,162

                        

                        

                        

                        70,661

                        

                        

                        

                        (113,600

                        )

                        

                        

                        540,498Operating income

                        

                        5,037

                        

                        

                        

                        21,626

                        

                        

                        

                        30,882

                        

                        

                        

                        -

                        

                        

                        

                        57,545Interest expense, net

                        

                        (19,630

                        )

                        

                        

                        (5,574

                        )

                        

                        

                        (25,568

                        )

                        

                        

                        -

                        

                        

                        

                        (50,772

                        )Income (loss) before equity in income

                            from unconsolidated entities and

                            minority interests

                        

                        (14,593

                        )

                        

                        

                        16,052

                        

                        

                        

                        5,314

                        

                        

                        

                        -

                        

                        

                        

                        6,773Equity in income from consolidated entities

                        

                        21,029

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (21,029

                        )

                        

                        

                        -Equity in income (loss) from unconsolidated

                            entities

                        

                        2,162

                        

                        

                        

                        (417

                        )

                        

                        

                        (36

                        )

                        

                        

                        -

                        

                        

                        

                        1,709Minority interests

                        

                        -

                        

                        

                        

                        (483

                        )

                        

                        

                        (478

                        )

                        

                        

                        -

                        

                        

                        

                        (961

                        )Gain on involuntary conversion

                        

                        2,005

                        

                        

                        

                        145

                        

                        

                        

                        945

                        

                        

                        

                        -

                        

                        

                        

                        3,095Income from continuing operations

                        

                        10,603

                        

                        

                        

                        15,297

                        

                        

                        

                        5,745

                        

                        

                        

                        (21,029

                        )

                        

                        

                        10,616Discontinued operations from consolidated

                            entities

                        

                        -

                        

                        

                        

                        (13

                        )

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (13

                        )Net income

                        

                        10,603

                        

                        

                        

                        15,284

                        

                        

                        

                        5,745

                        

                        

                        

                        (21,029

                        )

                        

                        

                        10,603Preferred distributions

                        

                        (19,356

                        )

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (19,356

                        )Net income (loss) applicable to unitholders

                        $

                        (8,753

                        )

                        

                        $

                        15,284

                        

                        

                        $

                        5,745

                        

                        

                        $

                        (21,029

                        )

                        

                        $

                        (8,753

                        )
    21
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2007 (in thousands)  FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Eliminations

                        

                        Total ConsolidatedRevenues:Hotel operating revenue

                        $

                        -

                        

                        

                        $

                        514,068

                        

                        

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        514,068Percentage lease revenue

                        

                        12,750

                        

                        

                        

                        -

                        

                        

                        

                        80,785

                        

                        

                        

                        (93,535

                        )

                        

                        

                        -Other revenue

                        

                        116

                        

                        

                        

                        -

                        

                        

                        

                        729

                        

                        

                        

                        -

                        

                        

                        

                        845Total revenue

                        

                        12,866

                        

                        

                        

                        514,068

                        

                        

                        

                        81,514

                        

                        

                        

                        (93,535

                        )

                        

                        

                        514,913Expenses:Hotel operating expense

                        

                        -

                        

                        

                        

                        328,021

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        328,021Taxes, insurance and lease expense

                        

                        2,258

                        

                        

                        

                        140,821

                        

                        

                        

                        11,107

                        

                        

                        

                        (93,535

                        )

                        

                        

                        60,651Corporate expenses

                        

                        622

                        

                        

                        

                        7,270

                        

                        

                        

                        4,149

                        

                        

                        

                        -

                        

                        

                        

                        12,041Depreciation

                        

                        4,172

                        

                        

                        

                        25,299

                        

                        

                        

                        22,734

                        

                        

                        

                        -

                        

                        

                        

                        52,205Other expenses

                        

                        -

                        

                        

                        

                        22

                        

                        

                        

                        393

                        

                        

                        

                        -

                        

                        

                        

                        415Total operating expenses

                        

                        7,052

                        

                        

                        

                        501,433

                        

                        

                        

                        38,383

                        

                        

                        

                        (93,535

                        )

                        

                        

                        453,333Operating income

                        

                        5,814

                        

                        

                        

                        12,635

                        

                        

                        

                        43,131

                        

                        

                        

                        -

                        

                        

                        

                        61,580Interest expense, net

                        

                        (12,468

                        )

                        

                        

                        (3,668

                        )

                        

                        

                        (29,943

                        )

                        

                        

                        -

                        

                        

                        

                        (46,079

                        )Income (loss) before equity in income

                            from unconsolidated entities, minority

                            interests and gain on sale of assets

                        

                        (6,654

                        )

                        

                        

                        8,967

                        

                        

                        

                        13,188

                        

                        

                        

                        -

                        

                        

                        

                        15,501Equity in income from consolidated entities

                        

                        75,035

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (75,035

                        )

                        

                        

                        -Equity in income from unconsolidated

                            entities

                        

                        17,059

                        

                        

                        

                        (543

                        )

                        

                        

                        (36

                        )

                        

                        

                        -

                        

                        

                        

                        16,480Minority interests in other partnerships

                        

                        -

                        

                        

                        

                        1,125

                        

                        

                        

                        (338

                        )

                        

                        

                        -

                        

                        

                        

                        787Gain on condominiums

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        18,139

                        

                        

                        

                        -

                        

                        

                        

                        18,139Income from continuing operations

                        

                        85,440

                        

                        

                        

                        9,549

                        

                        

                        

                        30,953

                        

                        

                        

                        (75,035

                        )

                        

                        

                        50,907Discontinued operations from consolidated

                            entities

                        

                        307

                        

                        

                        

                        32,323

                        

                        

                        

                        2,210

                        

                        

                        

                        -

                        

                        

                        

                        34,840Net income

                        

                        85,747

                        

                        

                        

                        41,872

                        

                        

                        

                        33,163

                        

                        

                        

                        (75,035

                        )

                        

                        

                        85,747Preferred distributions

                        

                        (19,356

                        )

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (19,356

                        )Net income applicable to unitholders

                        $

                        66,391

                        

                        

                        $

                        41,872

                        

                        

                        $

                        33,163

                        

                        

                        $

                        (75,035

                        )

                        

                        $

                        66,391
   22
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  12.Consolidating Financial Information – (continued)  CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Six Months Ended June30, 2008 (in thousands)   FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Total ConsolidatedCash flows from (used in) operating activities

                        $

                        (7,197

                        )

                        

                        $

                        46,716

                        

                        

                        $

                        58,034

                        

                        

                        $

                        97,553Cash flows from (used in) investing activities

                        

                        18,812

                        

                        

                        

                        (37,526

                        )

                        

                        

                        (34,244

                        )

                        

                        

                        (52,958

                        )Cash flows from (used in) financing activities

                        

                        (2,699

                        )

                        

                        

                        (494

                        )

                        

                        

                        (27,923

                        )

                        

                        

                        (31,116

                        )Effect of exchange rates changes on cash

                        

                        -

                        

                        

                        

                        (226

                        )

                        

                        

                        -

                        

                        

                        

                        (226

                        )Change in cash and cash equivalents

                        

                        8,916

                        

                        

                        

                        8,470

                        

                        

                        

                        (4,133

                        )

                        

                        

                        13,253Cash and cash equivalents at beginning of period

                        

                        7,889

                        

                        

                        

                        43,305

                        

                        

                        

                        6,415

                        

                        

                        

                        57,609Cash and equivalents at end of period

                        $

                        16,805

                        

                        

                        $

                        51,775

                        

                        

                        $

                        2,282

                        

                        

                        $

                        70,862
   CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 2007 (in thousands)  FelCor L.P.

                        

                        Subsidiary Guarantors

                        

                        Non-Guarantor Subsidiaries

                        

                        Total ConsolidatedCash flows from (used in) operating activities

                        $

                        1,264

                        

                        

                        $

                        30,044

                        

                        

                        $

                        31,212

                        

                        

                        $

                        62,520Cash flows from (used in) investing activities

                        

                        (5,586

                        )

                        

                        

                        67,609

                        

                        

                        

                        (5,315

                        )

                        

                        

                        56,708Cash flows from (used in) financing activities

                        

                        62,794

                        

                        

                        

                        (93,057

                        )

                        

                        

                        (25,432

                        )

                        

                        

                        (55,695

                        )Effect of exchange rates changes on cash

                        

                        -

                        

                        

                        

                        914

                        

                        

                        

                        -

                        

                        

                        

                        914Change in cash and cash equivalents

                        

                        58,472

                        

                        

                        

                        5,510

                        

                        

                        

                        465

                        

                        

                        

                        64,447Cash and cash equivalents at beginning of period

                        

                        69,728

                        

                        

                        

                        46,966

                        

                        

                        

                        7,485

                        

                        

                        

                        124,179Cash and equivalents at end of period

                        $

                        128,200

                        

                        

                        $

                        52,476

                        

                        

                        $

                        7,950

                        

                        

                        $

                        188,626
   23
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Item 2.

                        Management’s Discussion and Analysis of Financial Condition and Results of Operations
  General
  We embarked on a comprehensive hotel renovation program in 2006, designed to improve the quality, returns on investment and competitive position of our hotels. In the second quarter of 2008, revenue per available room, or RevPAR, increased 8.7%, for our 53 hotels where renovations were completed in 2007 and market share for these hotels increased approximately seven percent, compared
            to the same period last year. Above-market RevPAR increases and improvements in market share at these hotels continues to demonstrate the positive impact of our renovation program. We expect that our renovated hotels will continue to outperform the industry averages.  During the second quarter we completed renovations at three hotels. Since we began our renovation program, we have completed renovations at 78 hotels, which comprise approximately 94% of our portfolio. For the remainder of 2008, we expect to have a meaningful amount of disruption at only one hotel, San Francisco Union Square. The redevelopment of this hotel to a Marriott remains on
            schedule to be completed in early 2009.  RevPAR at our Consolidated Hotels increased 4.7%, on a same-store basis, for both the quarter and six months ended June 30, 2008, compared to the same periods last year. Our improvement in RevPAR was substantially higher than the average of all US hotels for the same periods (1.2% and 1.5%, respectively). Our hotels also increased their market share approximately four percent for the
            quarter and approximately three percent for the six months ended June 30, 2008. Our RevPAR increases were driven by increases in Occupancy of 3.0% and 2.9%, for the three and six months ended June 30, 2008, respectively, and improvement in average daily rate, or ADR, of 1.6% and 1.7%, over the same periods, respectively. We attribute the increases in RevPAR largely to our recently renovated hotels.  Hotel EBITDA margins at our Consolidated Hotels improved by 215 basis points for the quarter and 101 basis points for the six months ended June 30, 2008, compared to the same periods last year. The improved margins are the result of the increases in ADR and a concerted effort by our hotel managers to monitor operating expenses.  In December 2007, we acquired two hotels managed by Renaissance Hotels & Resorts, an affiliate of Marriott International, Inc. The acquisition of these hotels makes the comparison of hotel operating results between the quarters and the six months ended June 30, 2008 and June 30, 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 Condition and Results of Operations. For purposes of these same-store comparisons, we have adjusted our June 30, 2007 information to remove discontinued
            operations and gains on sale of condominium units and to add the historical results of operations of the two Renaissance hotels. We believe that this is helpful for the investor’s understanding of our current year operating results.  In the first quarter of 2008, we identified six hotels as candidates to be sold. Because of our shorter remaining estimated hold period on these hotels, we tested these hotels under the provisions of SFAS No. 144 and as a result of this test we recorded impairment charges of $17.1 million related to two of these hotels in the first quarter of 2008. This impairment charge is
            reflected in the six months ended June 30, 2008 income from continuing operations, FFO and EBITDA.  We declared and paid a $0.35 per unit common distribution for both the first and second quarter of 2008. Based on our recently revised forecasts for the second half of the year and limited visibility for 2009, we intend to lower our common distribution payment to $0.15 per unit effective the third quarter of 2008. Given this limited visibility and our focus on liquidity and leverage,
            we are taking a more conservative approach by setting the new distribution to more closely reflect FelCor’s taxable net income distribution requirement, and will adjust it accordingly to meet our targeted payout ratio. The distribution reduction would equate to annual cash flow savings of approximately $50 million. FelCor’s board of directors will determine the amount of future common and preferred distributions for each quarter, based upon the actual operating
            results for that quarter, economic conditions, other operating trends, its financial condition and capital requirements, as well as FelCor’s minimum REIT distribution requirements.  24
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Financial Comparison (in thousands of dollars, except RevPAR and Hotel EBITDA margin)  Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        % Change

                            2008-2007

                        

                        2008

                        

                        2007

                        

                        % Change

                            2008-2007RevPAR

                        $

                        105.76

                        

                        

                        $

                        100.99

                        

                        

                        4.7

                        

                        

                        

                        $

                        103.66

                        

                        

                        $

                        99.04

                        

                        

                        4.7Hotel EBITDA(1)

                        $

                        97,353

                        

                        

                        $

                        86,769

                        

                        

                        12.2

                        

                        

                        

                        $

                        179,517

                        

                        

                        $

                        165,193

                        

                        

                        8.7Hotel EBITDA margin(1)

                        

                        31.9%

                        

                        

                        

                        29.7%

                        

                        

                        7.4

                        

                        

                        

                        

                        30.1%

                        

                        

                        

                        29.1%

                        

                        

                        3.4Income from continuing operations(2)

                        $

                        23,553

                        

                        

                        $

                        29,811

                        

                        

                        (21.0

                        )

                        

                        

                        $

                        10,616

                        

                        

                        $

                        50,907

                        

                        

                        (79.1

                        )Same-Store FFO(1) (3)

                        $

                        49,435

                        

                        

                        $

                        37,509

                        

                        

                        31.8

                        

                        

                        

                        $

                        64,138

                        

                        

                        $

                        64,951

                        

                        

                        (1.3

                        )Same-Store EBITDA(1)(4)

                        $

                        90,188

                        

                        

                        $

                        77,630

                        

                        

                        16.2

                        

                        

                        

                        $

                        143,979

                        

                        

                        $

                        156,938

                        

                        

                        (8.3

                        )
  ____________ (1)

                        A discussion of the use, limitations and importance of these 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 Condition and Results of Operations.
  (2)

                        Included in income from continuing operations are the following amounts (in thousands):
  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Impairment loss

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        (17,131

                        )

                        

                        $

                        -Conversion costs

                        

                        (103

                        )

                        

                        

                        -

                        

                        

                        

                        (362

                        )

                        

                        

                        -Gain on sale of unconsolidated hotels

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        11,182Gain on sale of condominiums

                        

                        -

                        

                        

                        

                        14,858

                        

                        

                        

                        -

                        

                        

                        

                        18,139Gain on involuntary conversion

                        

                        3,095

                        

                        

                        

                        -

                        

                        

                        

                        3,095

                        

                        

                        

                        -Abandoned projects

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (22

                        )
  (3)

                        Same-Store FFO has not been adjusted for the following items included in net income (in thousands):
  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Impairment loss

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        (17,131

                        )

                        

                        $

                        -Conversion costs

                        

                        (103

                        )

                        

                        

                        -

                        

                        

                        

                        (362

                        )

                        

                        

                        -Abandoned projects

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (22

                        )Charges related to debt extinguishment,

                            net of minority interests

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (811

                        )
   25
  
 FELCOR LODGING LIMITED PARTNERSHIP  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   (4)

                        Same-Store EBITDA has not been adjusted for the following amounts included in net income
 (in thousands):  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Impairment loss

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        (17,131

                        )

                        

                        $

                        -Conversion costs

                        

                        (103

                        )

                        

                        

                        -

                        

                        

                        

                        (362

                        )

                        

                        

                        -Gain on sale of hotels, net of income tax

                            and minority interests

                        

                        -

                        

                        

                        

                        21,799

                        

                        

                        

                        -

                        

                        

                        

                        27,830Gain on sale of hotels in unconsolidated

                            entities

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        11,182Gain on involuntary conversion

                        

                        3,095

                        

                        

                        

                        -

                        

                        

                        

                        3,095

                        

                        

                        

                        -Abandoned projects

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (22

                        )Charges related to debt extinguishment,

                            net of minority interests

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (811

                        )
  Results of Operations  Comparison of the Three Months Ended June 30, 2008 and 2007  For the three months ended June 30, 2008, our net income applicable to common unitholders was $13.9 million, or $0.22 per unit, compared to $46.5 million, or $0.73 per unit, for the same period in 2007. For the current year, this includes a $3.1 million gain related to involuntary conversions from the final settlement of 2005 hurricane claims. For 2007, net income
            included $42.1 million from (i) gains from sale of hotels ($22.5 million), (ii) gain on sale of condominiums ($14.9 million), and (iii) operating income from hotels sold in 2007, and included in discontinued operations ($4.7 million).  Our income from continuing operations was $23.6 million in the second quarter of 2008, compared to $29.8 million for the same period in 2007. Continuing operations in 2008 included a $3.1 million gain on involuntary conversion while the prior year included a $14.9 million gain from the sale of condominium units.  The second quarter of 2008 was our second complete quarter to include results of operations from two hotels (the Renaissance 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 reflected increases in our revenues and expenses associated with these hotels
            compared to the same period in 2007.  In the second quarter of 2008, total revenues were $306.2 million, a 15.0% increase compared to the same period in 2007. The increase in revenue is principally attributed to our 4.7% increase in RevPAR and $25.6 million of revenue from the two recently-acquired Renaissance hotels.  In the second quarter of 2008, hotel departmental expense increased $14.6 million compared to the same period in 2007, of which $12.2 million is attributable to the two recently-acquired hotels and the remainder primarily reflects expenses associated with increased occupancy compared to the same period in 2007. As a percentage of total revenue, hotel departmental expenses
            increased from 32.1% to 32.7% compared to the same period in 2007. Rooms expense decreased as a percentage of total revenue from 19.9% to 18.6%, but food and beverage expense increased as a percent of total revenue from 10.0% to 11.8% and other operating department expenses increased as a percent of total revenue from 2.2% to 2.3% compared to the same period in 2007. These changes in departmental expenses as a percent of total revenue are primarily due to the mix and nature of the
            business of the two recently-acquired Renaissance hotels, which are both resort properties. ADR at the two recently-acquired hotels was 50% higher than the remainder of the portfolio in the second quarter of 2008, which was the principal reason for the improvement in rooms expense as a percentage of total revenue. Food and  26
  
 beverage revenue generally has significantly higher expenses as a percent of revenue than room revenue, and the two Renaissance hotels contributed approximately 23% of our food and beverage revenue during the second quarter of 2008.  In the second quarter of 2008, other property-related costs increased $8.0 million compared to the same period in 2007, of which $6.1 million related to the two recently-acquired Renaissance hotels. As a percentage of total revenue, other property operating costs decreased from 25.8% to 25.0% compared to the same period in 2007. This improvement reflects decreased repairs
            and maintenance costs (as a consequence of our recent renovation program) as a percentage of revenue.  In the second quarter of 2008, management and franchise fees increased $2.0 million compared to the same period in 2007, of which $1.2 million resulted from increases in revenue and $0.8 million related to the two recently-acquired hotels. There was no change in management and franchise fees as a percentage of revenue in the second quarter of 2008 compared to the same
            period in 2007.  In the second quarter of 2008, taxes, insurance and lease expense decreased $2.6 million compared to the same period in 2007. The change from the prior year primarily relates to a decrease of $3.2 million in property taxes largely from reduced assessed values and resolution of estimated property tax accruals related to prior years partially offset by the taxes, insurance and
            lease expense related to the two recently-acquired Renaissance hotels, of $1.4 million.  Corporate expenses remained essentially unchanged in the second quarter of 2008 compared to the same period in 2007.  In the second quarter of 2008, depreciation and amortization expense increased $7.9 million, compared to the same period in 2007, of which $1.8 million related to the two recently-acquired Renaissance hotels, and the rest of the increase is attributed to increased depreciation associated with $227.5 million of the hotel capital expenditures incurred in 2007.  Net interest expense included in continuing operations for the second quarter increased $1.6 million compared to the same period in 2007. This change in interest expense was primarily attributable to (i) a $1.0 million decrease in interest income due to lower cash balances and interest rates earned on those balances; (ii) a $1.9 million increase in interest expense
            related to the mortgage debt on the acquired hotels; (iii) a $0.9 million reduction in interest capitalized related to lower renovation-related construction in progress balances; and (iv) partially offset by decreases in interest rates on floating rate debt compared to the second quarter of 2007.  Equity in income from unconsolidated entities for the second quarter decreased $1.4 million compared to the same period in 2007, primarily due to resetting several percentage leases in late 2007 at less favorable terms for our unconsolidated hotel lessors.  During the second quarter of 2008, we finally settled insurance claims relating to 2005 hurricane losses and realized a $3.1 million gain from involuntary conversion.  During the second quarter of 2007, we finalized the sale of 146 of the 184 units at our Royale Palms condominium project and recognized a $14.9 million gain on sale under the completed contract method.  Discontinued operations for the three months ended June 30, 2007, included operating income of $4.7 million and $0.8 million minority interest expense related to the eleven hotels we sold in 2007. Discontinued operations also included $22.5 million of gains related to the sale of eight hotels during the second quarter of 2007.  27
  
 Comparison of the Six Months Ended June 30, 2008 and 2007  For the six months ended June 30, 2008, our net loss applicable to common unitholders was $8.8 million, or $0.14 per unit, compared to net income applicable to common unitholders of $66.4 million, or $1.05 per unit, for the same period in 2007. For the current year, the loss included a net $14.0 million from an impairment charge on two hotels ($17.1 million),
            recorded in the first quarter; and a gain related to involuntary conversion from the final settlement of 2005 hurricane claims ($3.1 million). The prior year net income includes $66.2 million from (i) gains from sale of hotels ($28.5 million in discontinued operations and $11.2 million in equity in income from unconsolidated entities), (ii) gain on sale of condominiums ($18.1 million), and (iii) operating income from hotels sold in 2007 and included in
            discontinued operations ($8.4 million).  Our income from continuing operations was $10.6 million in the six months ended June 30, 2008, compared to $50.9 million for the same period in 2007. Continuing operations in 2008 included a $17.1 million impairment charge and a $3.1 million gain from involuntary conversion, while the prior year included gains of $29.3 million from the gain on sale of an
            unconsolidated hotel ($11.2 million) and gains on sale of condominium units ($18.1 million).  The second quarter of 2008 was our second complete quarter to include results of operations from two hotels (the Renaissance 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 reflected increases in our revenues and expenses associated with these hotels
            compared to the same period in 2007.  In the six months ended June 30, 2008, total revenues were $598.0 million, a 16.1% increase compared to the same period in 2007. The increase in revenue is principally attributed to our 4.7% increase in RevPAR and $55.2 million of revenue from the two recently-acquired Renaissance hotels.  In the six months ended June 30, 2008, hotel departmental expense increased $33.5 million compared to the same period in 2007, of which $25.4 million is attributable to the two recently-acquired hotels and the remainder primarily reflects expenses associated with increased occupancy compared to the same period in 2007. As a percentage of total revenue, hotel
            departmental expenses increased from 31.8% to 33.0% compared to the same period in 2007. Rooms expense decreased as a percentage of total revenue from 19.8% to 18.6%, but food and beverage expense increased as a percent of total revenue from 9.9% to 12.0% and other operating department expenses increased as a percent of total revenue from 2.1% to 2.4% compared to the same period in 2007. The change in departmental expenses as a percent of total revenue is primarily due to the mix
            and nature of the business of the two recently-acquired Renaissance hotels, which are both resort properties. ADR at the two recently-acquired hotels was 60% higher than the remainder of the portfolio in the six months ended June 30, 2008, which was the principal reason for the improvement in rooms expense as a percentage of total revenue. Food and beverage generally has significantly higher expenses as a percent of revenue than room revenue and, the two Renaissance hotels
            contributed nearly 25% of our food and beverage revenue during the six months ended June 30, 2008.  In the six months ended June 30, 2008, other property-related costs increased $16.6 million compared to the same period in 2007, of which $12.1 million related to the two recently-acquired Renaissance hotels. As a percentage of total revenue, other property operating costs decreased from 26.6% to 25.7% compared to the same period in 2007. This improvement reflects
            decreased repairs and maintenance costs (as a consequence of our recent renovation program) as a percentage of revenue.  In the six months ended June 30, 2008, management and franchise fees increased $4.8 million compared to the same period in 2007, of which $3.1 million resulted from increases in revenue and $1.7 million related to the two recently-acquired hotels. There was no change in management and franchise fees as a percentage of revenue in the six months ended June 30,
            2008 compared to the same period in 2007.  28
  
 In the six months ended June 30, 2008, taxes, insurance and lease expense decreased $2.5 million compared to the same period in 2007. The change from the prior year primarily relates to a decrease of $3.6 million in percentage rent expense due to the resetting of several of our percentage leases in late 2007 at more favorable terms for our consolidated hotel lessees and
            a decrease of $1.2 million in property taxes largely from reduced assessed values and successful resolution of estimated property tax accruals related to prior years, partially offset by the taxes, insurance and lease expense related to the two recently-acquired Renaissance hotels of $2.8 million for the six months ended June 30, 2008.  Corporate expenses remained essentially unchanged in the six months ended June 30, 2008 compared to the same period in 2007.  In the six months ended June 30, 2008, depreciation and amortization expense increased $16.6 million, compared to the same period in 2007, of which increase $3.6 million related to the two recently-acquired Renaissance hotels, and the rest of the increase is attributed to increased depreciation associated with $227.5 million of the hotel capital expenditures
            incurred in 2007.  In the first quarter of 2008, we identified six hotels as candidates to be sold. We tested these hotels for impairment under the provisions of SFAS No. 144 using undiscounted estimated cash flows over a revised estimated remaining hold period. Of the hotels tested, two hotels failed the test under SFAS No. 144, which resulted in an impairment charge during the first quarter
            ended March 31, 2008 of $17.1 million to write down these hotel assets to our current estimate of their fair market value before selling expenses.  Net interest expense included in continuing operations for the six months ended June 30, 2008 increased $4.7 million compared to the same period in 2007. This increase was primarily attributable to (i) a $1.7 million decrease in interest income due to lower cash balances and interest rates earned on those balances; (ii) a $4.2 million increase in interest
            expense related to the mortgage debt on the acquired hotels; (iii) a $2.1 million reduction in capitalized interest from lower renovation-related construction in progress balances; and (iv) partially offset by decreases in interest rates on floating rate debt compared to the first six months of 2007.  Equity in income from unconsolidated entities decreased by $14.8 million in the six months ended June 30, 2008 compared to the same period in 2007, primarily due to $11.2 million of income received from the gain on the sale of an unconsolidated hotel during the first quarter of 2007 and resetting several percentage leases in late 2007 at less favorable terms for our
            unconsolidated hotel lessors.  During the first six months of 2008, we finally settled insurance claims relating to 2005 hurricane losses and realized a $3.1 million gain from involuntary conversion.  During the six months of 2007, we finalized the sale of 177 of the 184 units at our Royale Palms condominium project and recognized an $18.1 million gain on sale under the completed contract method.  Discontinued operations for the six months ended June 30, 2007, included operating income of $8.4 million, $0.9 million of charges related to early debt repayment, and $1.1 million of minority interest expense related to the eleven hotels we sold in 2007. Discontinued operations also included $28.5 million of gains related to the sale of ten hotels during the first
            six months of 2007.  Non-GAAP Financial Measures  We refer in this report to certain “non-GAAP financial measures.” These measures, including FFO, Same-Store FFO, Same-Store EBITDA, Same-Store Hotel EBITDA and Hotel EBITDA margin, 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 limitations of such measures.  29
  
 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 to FFO and Same-Store FFO  Three Months Ended June 30,2008

                        

                        2007Dollars

                        

                        Units

                        

                        Per Unit Amount

                        

                        Dollars

                        

                        Units

                        

                        Per Unit AmountNet income

                        $

                        23,553

                        

                        

                        

                        

                        

                        

                        

                        

                        $

                        56,161Preferred distributions

                        

                        (9,678

                        )

                        

                        

                        

                        

                        

                        

                        

                        

                        (9,678

                        )Net income applicable to common unitholders

                        

                        13,875

                        

                        

                        63,322

                        

                        $

                        0.22

                        

                        

                        

                        46,483

                        

                        

                        63,387

                        

                        $

                        0.73Depreciation and amortization

                        

                        35,072

                        

                        

                        -

                        

                        

                        0.55

                        

                        

                        

                        27,155

                        

                        

                        -

                        

                        

                        0.43Depreciation, unconsolidated entities and discontinued operations

                        

                        3,583

                        

                        

                        -

                        

                        

                        0.06

                        

                        

                        

                        2,848

                        

                        

                        -

                        

                        

                        0.04Gain on involuntary conversion

                        

                        (3,095

                        )

                        

                        -

                        

                        

                        (0.05

                        )

                        

                        

                        -

                        

                        

                        -

                        

                        

                        -Gain on sale of hotels

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (21,799

                        )

                        

                        -

                        

                        

                        (0.34

                        )FFO

                        

                        49,435

                        

                        

                        63,322

                        

                        

                        0.78

                        

                        

                        

                        54,687

                        

                        

                        63,387

                        

                        

                        0.86Preferred distributions on Series A preferred units

                        

                        6,279

                        

                        

                        9,985

                        

                        

                        (0.02

                        )

                        

                        

                        6,279

                        

                        

                        9,985

                        

                        

                        (0.03

                        )FFO per unit assuming Series A Preferred Unit conversion(a)

                        $

                        55,714

                        

                        

                        73,307

                        

                        $

                        0.76

                        

                        

                        $

                        60,966

                        

                        

                        73,372

                        

                        $

                        0.83
  Three Months Ended June 30,2008

                        

                        2007Dollars

                        

                        

                        Units

                        

                        Per Unit Amount

                        

                        

                        Dollars

                        

                        

                        Units

                        

                        Per Unit AmountFFO

                        $

                        49,435

                        

                        

                        63,322

                        

                        $

                        0.78

                        

                        

                        $

                        54,687

                        

                        

                        63,387

                        

                        $

                        0.86FFO from discontinued operations

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (4,566

                        )

                        

                        -

                        

                        

                        (0.07

                        )FFO from acquired hotels(b)

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        2,246

                        

                        

                        -

                        

                        

                        0.04Gain on sale of condominiums

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (14,858

                        )

                        

                        -

                        

                        

                        (0.24

                        )Same-Store FFO

                        

                        49,435

                        

                        

                        63,322

                        

                        

                        0.78

                        

                        

                        $

                        37,509

                        

                        

                        63,387

                        

                        $

                        0.59Preferred distributions on Series A preferred units

                        

                        6,279

                        

                        

                        9,985

                        

                        

                        (0.02

                        )Same-Store FFO per unit assuming Series A Preferred Unit
                            conversion(a)

                        $

                        55,714

                        

                        

                        73,307

                        

                        $

                        0.76
  (a)

                        For calculation of FFO per unit and Same-Store FFO per unit it is more dilutive to assume the conversion of our Series A Convertible Preferred Units into common units when our quarterly FFO per unit or Same-Store FFO per unit exceeds $0.63.
 (b)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  30
  
 Reconciliation of Net Income to FFO and Same-Store FFO  Six Months Ended June 30,2008

                        

                        2007Dollars

                        

                        Units

                        

                        Per Unit Amount

                        

                        Dollars

                        

                        Units

                        

                        Per Unit AmountNet income

                        $

                        10,603

                        

                        

                        

                        

                        

                        

                        

                        

                        $

                        85,747Preferred distributions

                        

                        (19,356

                        )

                        

                        

                        

                        

                        

                        

                        

                        

                        (19,356

                        )Net income (loss) applicable to common unitholders

                        

                        (8,753

                        )

                        

                        63,173

                        

                        $

                        (0.14

                        )

                        

                        

                        66,391

                        

                        

                        63,254

                        

                        $

                        1.05Depreciation and amortization

                        

                        68,840

                        

                        

                        -

                        

                        

                        1.09

                        

                        

                        

                        52,205

                        

                        

                        -

                        

                        

                        0.84Depreciation, unconsolidated entities and discontinued operations

                        

                        7,133

                        

                        

                        -

                        

                        

                        0.11

                        

                        

                        

                        5,711

                        

                        

                        -

                        

                        

                        0.09Gain on involuntary conversion

                        

                        (3,095

                        )

                        

                        -

                        

                        

                        (0.05

                        )

                        

                        

                        -

                        

                        

                        -

                        

                        

                        -Gain on sale of hotels

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (27,830

                        )

                        

                        -

                        

                        

                        (0.45

                        )Gain on sale of hotels in unconsolidated entities

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (11,182

                        )

                        

                        -

                        

                        

                        (0.18

                        )Conversion of options and unvested restricted units

                        

                        -

                        

                        

                        120

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        -

                        

                        

                        -FFO

                        $

                        64,125

                        

                        

                        63,293

                        

                        $

                        1.01

                        

                        

                        

                        85,295

                        

                        

                        63,254

                        

                        

                        1.35Preferred distributions on Series A Preferred Units

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        12,558

                        

                        

                        9,985

                        

                        

                        (0.01

                        )FFO per unit assuming Series A Preferred Unit conversion(a)

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        $

                        97,853

                        

                        

                        73,239

                        

                        $

                        1.34
  (a)

                        For calculation of FFO per unit it is more dilutive to assume the conversion of our Series A Convertible Preferred Units into common units when our FFO per unit for six months exceeds $1.26.
  Six Months Ended June 30,2008

                        

                        2007Dollars

                        

                        Units

                        

                        Per Unit Amount

                        

                        Dollars

                        

                        Units

                        

                        Per Unit AmountFFO

                        $

                        64,125

                        

                        

                        63,293

                        

                        $

                        1.01

                        

                        

                        $

                        85,295

                        

                        

                        63,254

                        

                        $

                        1.35FFO from discontinued operations

                        

                        13

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (7,835

                        )

                        

                        -

                        

                        

                        (0.12

                        )FFO from acquired hotels(b)

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        5,630

                        

                        

                        -

                        

                        

                        0.09Gain on sale of condominiums

                        

                        -

                        

                        

                        -

                        

                        

                        -

                        

                        

                        

                        (18,139

                        )

                        

                        -

                        

                        

                        (0.29

                        )Same-Store FFO

                        $

                        64,138

                        

                        

                        63,293

                        

                        $

                        1.01

                        

                        

                        $

                        64,951

                        

                        

                        63,254

                        

                        $

                        1.03
  (b)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  FFO and Same-Store FFO have not been adjusted for the following amounts included in net income (loss) applicable to common unitholders (in thousands):  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Impairment loss

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        (17,131

                        )

                        

                        $

                        -Conversion costs

                        

                        (103

                        )

                        

                        

                        -

                        

                        

                        

                        (362

                        )

                        

                        

                        -Abandoned projects

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (22

                        )Charges related to debt extinguishment,

                            net of minority interests

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (811

                        )
   31
  
 Reconciliation of Net Income to EBITDA and Same-Store EBITDA (in thousands)  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Net income

                        $

                        23,553

                        

                        

                        $

                        56,161

                        

                        

                        $

                        10,603

                        

                        

                        $

                        85,747Depreciation and amortization

                        

                        35,072

                        

                        

                        

                        27,155

                        

                        

                        

                        68,840

                        

                        

                        

                        52,205Depreciation, unconsolidated entities and discontinued operations

                        

                        3,583

                        

                        

                        

                        2,848

                        

                        

                        

                        7,133

                        

                        

                        

                        5,711Interest expense

                        

                        25,196

                        

                        

                        

                        24,627

                        

                        

                        

                        51,745

                        

                        

                        

                        48,746Interest expense, unconsolidated entities and discontinued operations

                        

                        1,327

                        

                        

                        

                        1,489

                        

                        

                        

                        2,923

                        

                        

                        

                        3,063Amortization of FelCor stock compensation

                        

                        1,457

                        

                        

                        

                        1,207

                        

                        

                        

                        2,722

                        

                        

                        

                        2,614EBITDA

                        

                        90,188

                        

                        

                        

                        113,487

                        

                        

                        

                        143,966

                        

                        

                        

                        198,086EBITDA from discontinued operations

                        

                        -

                        

                        

                        

                        (26,365

                        )

                        

                        

                        13

                        

                        

                        

                        (34,880

                        )EBITDA from acquired hotels(a)

                        

                        -

                        

                        

                        

                        5,366

                        

                        

                        

                        -

                        

                        

                        

                        11,871Gain on sale of condominiums

                        

                        -

                        

                        

                        

                        (14,858

                        )

                        

                        

                        -

                        

                        

                        

                        (18,139

                        )Same-Store EBITDA

                        $

                        90,188

                        

                        

                        $

                        77,630

                        

                        

                        $

                        143,979

                        

                        

                        $

                        156,938
  (a)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  EBITDA and Same-Store EBITDA have not been adjusted for the following amounts included in net income (in thousands):  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Impairment loss

                        $

                        -

                        

                        

                        $

                        -

                        

                        

                        $

                        (17,131

                        )

                        

                        $

                        -Conversion costs

                        

                        (103

                        )

                        

                        

                        -

                        

                        

                        

                        (362

                        )

                        

                        

                        -Gain on involuntary conversion

                        

                        3,095

                        

                        

                        

                        -

                        

                        

                        

                        3,095

                        

                        

                        

                        -Gain on sale of hotels

                        

                        -

                        

                        

                        

                        21,799

                        

                        

                        

                        -

                        

                        

                        

                        27,830Gain on sale of hotels in unconsolidated entities

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        11,182Abandoned projects

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (22

                        )Charges related to debt extinguishment,

                            net of minority interests

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (811

                        )
   32
  
 The following tables detail our computation of Hotel EBITDA, Hotel EBITDA margin, hotel operating expenses and the reconciliation of hotel operating expenses to total operating expenses with respect to our hotels included in continuing operations at the dates presented.  Hotel EBITDA and Hotel EBITDA Margin (dollars in thousands)  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Total revenues

                        $

                        306,168

                        

                        

                        $

                        266,244

                        

                        

                        $

                        598,043

                        

                        

                        $

                        514,913Other revenue

                        

                        (931

                        )

                        

                        

                        (715

                        )

                        

                        

                        (1,259

                        )

                        

                        

                        (845

                        )Revenue from acquired hotels(a)

                        

                        -

                        

                        

                        

                        26,186

                        

                        

                        

                        -

                        

                        

                        

                        54,171Same-Store hotel operating revenue

                        

                        305,237

                        

                        

                        

                        291,715

                        

                        

                        

                        596,784

                        

                        

                        

                        568,239Same-Store hotel operating expenses

                        

                        207,884

                        

                        

                        

                        204,946

                        

                        

                        

                        417,267

                        

                        

                        

                        403,046Hotel EBITDA

                        $

                        97,353

                        

                        

                        $

                        86,769

                        

                        

                        $

                        179,517

                        

                        

                        $

                        165,193Hotel EBITDA margin(b)

                        

                        31.9%

                        

                        

                        

                        29.7%

                        

                        

                        

                        30.1%

                        

                        

                        

                        29.1%
  (a)

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

                        Hotel EBITDA as a percentage of hotel operating revenue.
  Reconciliation of Total Operating Expenses to Same-Store Hotel Operating Expenses (dollars in thousands)  Three Months Ended

                        

                        Six Months EndedJune 30,

                        

                        June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Total operating expenses

                        $

                        262,382

                        

                        

                        $

                        232,300

                        

                        

                        $

                        540,498

                        

                        

                        $

                        453,333Unconsolidated taxes, insurance and lease expense

                        

                        2,075

                        

                        

                        

                        1,896

                        

                        

                        

                        4,197

                        

                        

                        

                        3,599Consolidated hotel lease expense

                        

                        (15,737

                        )

                        

                        

                        (17,267

                        )

                        

                        

                        (27,933

                        )

                        

                        

                        (31,525

                        )Corporate expenses

                        

                        (4,864

                        )

                        

                        

                        (5,255

                        )

                        

                        

                        (11,691

                        )

                        

                        

                        (12,041

                        )Depreciation and amortization

                        

                        (35,072

                        )

                        

                        

                        (27,155

                        )

                        

                        

                        (68,840

                        )

                        

                        

                        (52,205

                        )Impairment loss

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        (17,131

                        )

                        

                        

                        -Other expenses

                        

                        (900

                        )

                        

                        

                        (393

                        )

                        

                        

                        (1,833

                        )

                        

                        

                        (415

                        )Expenses from acquired hotels(a)

                        

                        -

                        

                        

                        

                        20,820

                        

                        

                        

                        -

                        

                        

                        

                        42,300Same-Store Hotel operating expenses

                        $

                        207,884

                        

                        

                        $

                        204,946

                        

                        

                        $

                        417,267

                        

                        

                        $

                        403,046
  (a)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  33
  
  The following tables reconcile net income to Hotel EBITDA and the ratio of operating income to total revenue to Hotel EBITDA margin.  Reconciliation of Net Income to Hotel EBITDA (in thousands)  Three Months EndedJune 30,

                        

                        Six Months EndedJune 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Net income

                        $

                        23,553

                        

                        

                        $

                        56,161

                        

                        

                        $

                        10,603

                        

                        

                        $

                        85,747Discontinued operations

                        

                        -

                        

                        

                        

                        (26,350

                        )

                        

                        

                        13

                        

                        

                        

                        (34,840

                        )EBITDA from acquired hotels(a)

                        

                        -

                        

                        

                        

                        5,366

                        

                        

                        

                        -

                        

                        

                        

                        11,871Equity in income from unconsolidated entities

                        

                        (2,331

                        )

                        

                        

                        (3,710

                        )

                        

                        

                        (1,709

                        )

                        

                        

                        (16,480

                        )Minority interests

                        

                        890

                        

                        

                        

                        (506

                        )

                        

                        

                        961

                        

                        

                        

                        (787

                        )Consolidated hotel lease expense

                        

                        15,737

                        

                        

                        

                        17,267

                        

                        

                        

                        27,933

                        

                        

                        

                        31,525Unconsolidated taxes, insurance and lease expense

                        

                        (2,075

                        )

                        

                        

                        (1,896

                        )

                        

                        

                        (4,197

                        )

                        

                        

                        (3,599

                        )Interest expense, net

                        

                        24,769

                        

                        

                        

                        23,207

                        

                        

                        

                        50,772

                        

                        

                        

                        46,079Corporate expenses

                        

                        4,864

                        

                        

                        

                        5,255

                        

                        

                        

                        11,691

                        

                        

                        

                        12,041Depreciation and amortization

                        

                        35,072

                        

                        

                        

                        27,155

                        

                        

                        

                        68,840

                        

                        

                        

                        52,205Impairment loss

                        

                        -

                        

                        

                        

                        -

                        

                        

                        

                        17,131

                        

                        

                        

                        -Other expenses

                        

                        900

                        

                        

                        

                        393

                        

                        

                        

                        1,833

                        

                        

                        

                        415Gain on sale of condominiums

                        

                        -

                        

                        

                        

                        (14,858

                        )

                        

                        

                        -

                        

                        

                        

                        (18,139

                        )Gain on involuntary conversion

                        

                        (3,095

                        )

                        

                        

                        -

                        

                        

                        

                        (3,095

                        )

                        

                        

                        -Other revenue

                        

                        (931

                        )

                        

                        

                        (715

                        )

                        

                        

                        (1,259

                        )

                        

                        

                        (845

                        )Hotel EBITDA

                        $

                        97,353

                        

                        

                        $

                        86,769

                        

                        

                        $

                        179,517

                        

                        

                        $

                        165,193
  (a)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  Reconciliation of Ratio of Operating Income to Total Revenues to Hotel EBITDA Margin  Three Months Ended June 30,

                        

                        Six Months Ended

                            June 30,2008

                        

                        2007

                        

                        2008

                        

                        2007Ratio of operating income to total revenues

                        14.3

                        %

                        

                        11.6

                        %

                        

                        9.6

                        %

                        

                        10.8

                        %Other revenue

                        (0.3

                        )

                        

                        (0.2

                        )

                        

                        (0.2

                        )

                        

                        (0.1

                        )Revenue from acquired hotels(a)

                        -

                        

                        

                        9.0

                        

                        

                        -

                        

                        

                        9.5Unconsolidated taxes, insurance and lease expense

                        (0.7

                        )

                        

                        (0.7

                        )

                        

                        (0.7

                        )

                        

                        (0.6

                        )Consolidated hotel lease expense

                        5.2

                        

                        

                        5.9

                        

                        

                        4.7

                        

                        

                        5.5Other expenses

                        0.3

                        

                        

                        0.1

                        

                        

                        0.3

                        

                        

                        0.1Corporate expenses

                        1.6

                        

                        

                        1.8

                        

                        

                        2.0

                        

                        

                        2.1Depreciation and amortization

                        11.5

                        

                        

                        9.3

                        

                        

                        11.5

                        

                        

                        9.2Impairment loss

                        -

                        

                        

                        -

                        

                        

                        2.9

                        

                        

                        -Expenses from acquired hotels(a)

                        -

                        

                        

                        (7.1

                        )

                        

                        -

                        

                        

                        (7.4

                        )Hotel EBITDA margin

                        31.9

                        %

                        

                        29.7

                        %

                        

                        30.1

                        %

                        

                        29.1

                        %
  (a)

                        We have included amounts for two Renaissance hotels acquired in December 2007, prior to our ownership of these hotels, for comparison purposes.
  34
  
 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, EBITDA, Hotel EBITDA and Hotel 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, or NAREIT, defines FFO as net income or loss (computed in accordance with GAAP), 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.  To derive same-store comparisons, we have adjusted FFO and EBITDA 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.  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 margin are useful 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 from continuing operations all revenues and expenses not directly associated with hotel operations including 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 assets and implicitly assume that the value of
            real estate assets diminishes predictably over time, accurately reflect an adjustment in the value of our assets. We also eliminate 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. Hotel EBITDA and Hotel EBITDA margins
            are presented on a same-store basis including the historical results of operations from the two Renaissance hotels acquired in December 2007.  35
  
 Limitations of Non-GAAP Measures  FelCor’s management and Board of Directors use FFO, EBITDA, Hotel EBITDA and Hotel 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 use Hotel EBITDA and Hotel 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, EBITDA, Hotel EBITDA and Hotel EBITDA margin, as presented by us, may not be comparable to FFO, EBITDA, Hotel EBITDA and Hotel 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 per unit, or EBITDA be 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 per unit should not be used as a measure of amounts that accrue directly to the benefit of unitholders. FFO, EBITDA, Hotel EBITDA and Hotel 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.  Pro Rata Share of Rooms Owned  The following table sets forth, as of June 30, 2008, the pro rata share of hotel rooms owned by us after giving consideration to the portion of rooms owned by our partners in our consolidated and unconsolidated joint ventures:  Hotels

                        

                        Room Countat

                            June 30, 2008Consolidated hotels in continuing operations

                        85

                        

                        

                        

                        25,007Unconsolidated hotel operations

                        4

                        

                        

                        

                        647Total hotels

                        89

                        

                        

                        

                        25,65450% joint ventures

                        17

                        

                        

                        

                        (2,032

                        )60% joint ventures

                        1

                        

                        

                        

                        (214

                        )75% joint ventures

                        1

                        

                        

                        

                        (55

                        )90% joint ventures

                        3

                        

                        

                        

                        (68

                        )97% joint venture

                        1

                        

                        

                        

                        (10

                        )Total owned rooms by joint venture partners

                        

                        

                        

                        

                        (2,379

                        )Pro rata share of rooms owned

                        

                        

                        

                        

                        23,275
   36
  
 Hotel Portfolio Composition  The following tables set forth, as of June 30, 2008, for 85 Consolidated Hotels distribution by brand, by our top markets, by type of location, and by market segment.  Brand

                        

                        Hotels

                        

                        Rooms

                        

                        % of

                            Total Rooms

                        

                        % of 2007

                            HotelEBITDA (a)Embassy Suites Hotels

                        

                        47

                        

                        12,129

                        

                        49

                        

                        58Holiday Inn

                        

                        17

                        

                        6,306

                        

                        25

                        

                        19Sheraton and Westin

                        

                        9

                        

                        3,217

                        

                        13

                        

                        14Doubletree

                        

                        7

                        

                        1,472

                        

                        6

                        

                        7Renaissance and Hotel 480

                        

                        3

                        

                        1,324

                        

                        5

                        

                        -

                        (b)Hilton

                        

                        2

                        

                        559

                        

                        2

                        

                        2Top MarketsSouth Florida

                        

                        5

                        

                        1,436

                        

                        6

                        

                        7Atlanta

                        

                        5

                        

                        1,462

                        

                        6

                        

                        7Los Angeles area

                        

                        4

                        

                        899

                        

                        4

                        

                        6San Francisco area

                        

                        6

                        

                        2,141

                        

                        8

                        

                        6Orlando

                        

                        5

                        

                        1,690

                        

                        7

                        

                        5Dallas

                        

                        4

                        

                        1,333

                        

                        5

                        

                        4Minneapolis

                        

                        3

                        

                        736

                        

                        3

                        

                        4Phoenix

                        

                        3

                        

                        798

                        

                        3

                        

                        4Northern New Jersey

                        

                        3

                        

                        756

                        

                        3

                        

                        4San Diego

                        

                        1

                        

                        600

                        

                        2

                        

                        3Washington, D.C.

                        

                        1

                        

                        443

                        

                        2

                        

                        3Chicago

                        

                        3

                        

                        795

                        

                        3

                        

                        3San Antonio

                        

                        3

                        

                        874

                        

                        4

                        

                        3Philadelphia

                        

                        2

                        

                        729

                        

                        3

                        

                        3Boston

                        

                        2

                        

                        532

                        

                        2

                        

                        2LocationSuburban

                        

                        33

                        

                        8,360

                        

                        33

                        

                        36Airport

                        

                        20

                        

                        6,206

                        

                        26

                        

                        26Urban

                        

                        20

                        

                        6,362

                        

                        25

                        

                        25Resort

                        

                        12

                        

                        4,079

                        

                        16

                        

                        13SegmentUpper-upscale

                        

                        68

                        

                        18,701

                        

                        75

                        

                        81Full service

                        

                        17

                        

                        6,306

                        

                        25

                        

                        19
  (a)

                        Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Quarterly Report 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.
  37
  
 Hotel Operating Statistics  The following tables set forth occupancy, ADR and RevPAR for the second quarter and the first six months of 2008 and 2007, and the percentage changes thereof between the periods presented, for hotels included in our consolidated operations.  Operating Statistics by Brand  xx

                        Occupancy (%)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceEmbassy Suites Hotels

                        78.2

                        

                        75.3

                        

                        3.8

                        

                        

                        75.6

                        

                        73.9

                        

                        2.3Holiday Inn

                        78.0

                        

                        73.6

                        

                        6.0

                        

                        

                        74.0

                        

                        68.5

                        

                        8.0Sheraton and Westin

                        70.1

                        

                        71.6

                        

                        (2.1

                        )

                        

                        68.1

                        

                        70.2

                        

                        (3.0

                        )Doubletree

                        79.9

                        

                        71.2

                        

                        12.1

                        

                        

                        77.7

                        

                        71.4

                        

                        8.8Renaissance and Hotel 480(a)

                        68.2

                        

                        78.0

                        

                        (12.7

                        )

                        

                        69.4

                        

                        75.8

                        

                        (8.4

                        )Hilton

                        70.4

                        

                        74.0

                        

                        (4.9

                        )

                        

                        61.3

                        

                        56.5

                        

                        8.5Total hotels

                        76.5

                        

                        74.3

                        

                        3.0

                        

                        

                        73.7

                        

                        71.6

                        

                        2.9ADR ($)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceEmbassy Suites Hotels

                        142.90

                        

                        140.99

                        

                        1.4

                        

                        

                        147.40

                        

                        144.62

                        

                        1.9Holiday Inn

                        123.67

                        

                        117.03

                        

                        5.7

                        

                        

                        120.94

                        

                        115.10

                        

                        5.1Sheraton and Westin

                        128.04

                        

                        127.65

                        

                        0.3

                        

                        

                        129.06

                        

                        129.62

                        

                        (0.4

                        )Doubletree

                        145.53

                        

                        146.22

                        

                        (0.5

                        )

                        

                        149.64

                        

                        147.88

                        

                        1.2Renaissance and Hotel 480(a)

                        187.26

                        

                        186.65

                        

                        0.3

                        

                        

                        199.33

                        

                        197.09

                        

                        1.1Hilton

                        139.77

                        

                        139.10

                        

                        0.5

                        

                        

                        125.53

                        

                        127.86

                        

                        (1.8

                        )Total hotels

                        138.22

                        

                        136.00

                        

                        1.6

                        

                        

                        140.62

                        

                        138.28

                        

                        1.7RevPAR ($)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceEmbassy Suites Hotels

                        111.71

                        

                        106.18

                        

                        5.2

                        

                        

                        111.40

                        

                        106.86

                        

                        4.2Holiday Inn

                        96.44

                        

                        86.11

                        

                        12.0

                        

                        

                        89.47

                        

                        78.87

                        

                        13.4Sheraton and Westin

                        89.76

                        

                        91.38

                        

                        (1.8

                        )

                        

                        87.91

                        

                        90.97

                        

                        (3.4

                        )Doubletree

                        116.21

                        

                        104.15

                        

                        11.6

                        

                        

                        116.32

                        

                        105.65

                        

                        10.1Renaissance and Hotel 480(a)

                        127.64

                        

                        145.67

                        

                        (12.4

                        )

                        

                        138.36

                        

                        149.36

                        

                        (7.4

                        )Hilton

                        98.38

                        

                        102.93

                        

                        (4.4

                        )

                        

                        77.00

                        

                        72.28

                        

                        6.5Total hotels

                        105.76

                        

                        100.99

                        

                        4.7

                        

                        

                        103.66

                        

                        99.04

                        

                        4.7
  (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.
  38
  
 Operating Statistics for Our Top Markets  Occupancy (%)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceSouth Florida

                        78.3

                        

                        72.4

                        

                        8.2

                        

                        

                        82.7

                        

                        79.5

                        

                        4.0Atlanta

                        75.9

                        

                        78.1

                        

                        (2.8

                        )

                        

                        76.1

                        

                        76.3

                        

                        (0.3

                        )Los Angeles area

                        78.1

                        

                        79.1

                        

                        (1.2

                        )

                        

                        75.8

                        

                        78.3

                        

                        (3.2

                        )San Francisco area

                        79.7

                        

                        78.9

                        

                        1.0

                        

                        

                        75.3

                        

                        72.9

                        

                        3.4Orlando

                        80.8

                        

                        80.6

                        

                        0.3

                        

                        

                        81.4

                        

                        79.9

                        

                        1.9Dallas

                        68.6

                        

                        65.9

                        

                        4.2

                        

                        

                        69.2

                        

                        68.1

                        

                        1.6Minneapolis

                        76.1

                        

                        78.5

                        

                        (3.1

                        )

                        

                        71.5

                        

                        73.9

                        

                        (3.2

                        )Phoenix

                        66.8

                        

                        68.0

                        

                        (1.7

                        )

                        

                        71.4

                        

                        74.9

                        

                        (4.8

                        )Northern New Jersey

                        75.6

                        

                        76.7

                        

                        (1.3

                        )

                        

                        71.0

                        

                        68.3

                        

                        4.0San Diego

                        83.0

                        

                        73.9

                        

                        12.3

                        

                        

                        81.8

                        

                        76.2

                        

                        7.3Washington, D.C.

                        70.6

                        

                        73.8

                        

                        (4.3

                        )

                        

                        57.2

                        

                        68.2

                        

                        (16.1

                        )Chicago

                        81.7

                        

                        73.7

                        

                        10.8

                        

                        

                        73.3

                        

                        66.9

                        

                        9.6San Antonio

                        83.1

                        

                        83.3

                        

                        (0.2

                        )

                        

                        80.1

                        

                        77.6

                        

                        3.2Philadelphia

                        82.0

                        

                        72.4

                        

                        13.3

                        

                        

                        72.3

                        

                        64.2

                        

                        12.6Boston

                        85.3

                        

                        70.2

                        

                        21.6

                        

                        

                        77.2

                        

                        61.1

                        

                        26.3ADR ($)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceSouth Florida

                        137.88

                        

                        136.12

                        

                        1.3

                        

                        

                        170.13

                        

                        169.74

                        

                        0.2Atlanta

                        120.70

                        

                        121.00

                        

                        (0.3

                        )

                        

                        123.89

                        

                        123.11

                        

                        0.6Los Angeles area

                        158.73

                        

                        158.32

                        

                        0.3

                        

                        

                        157.87

                        

                        154.54

                        

                        2.2San Francisco area

                        142.66

                        

                        138.57

                        

                        3.0

                        

                        

                        139.64

                        

                        135.16

                        

                        3.3Orlando

                        104.66

                        

                        103.44

                        

                        1.2

                        

                        

                        114.67

                        

                        112.94

                        

                        1.5Dallas

                        124.23

                        

                        122.26

                        

                        1.6

                        

                        

                        127.23

                        

                        126.57

                        

                        0.5Minneapolis

                        141.76

                        

                        142.94

                        

                        (0.8

                        )

                        

                        143.28

                        

                        141.12

                        

                        1.5Phoenix

                        134.74

                        

                        136.17

                        

                        (1.0

                        )

                        

                        162.11

                        

                        160.24

                        

                        1.2Northern New Jersey

                        165.94

                        

                        157.64

                        

                        5.3

                        

                        

                        164.09

                        

                        155.21

                        

                        5.7San Diego

                        169.35

                        

                        156.12

                        

                        8.5

                        

                        

                        161.20

                        

                        154.28

                        

                        4.5Washington, D.C.

                        162.52

                        

                        169.09

                        

                        (3.9

                        )

                        

                        162.57

                        

                        170.86

                        

                        (4.9

                        )Chicago

                        132.15

                        

                        136.50

                        

                        (3.2

                        )

                        

                        127.09

                        

                        130.22

                        

                        (2.4

                        )San Antonio

                        115.80

                        

                        111.04

                        

                        4.3

                        

                        

                        114.83

                        

                        110.33

                        

                        4.1Philadelphia

                        158.99

                        

                        145.77

                        

                        9.1

                        

                        

                        149.20

                        

                        135.85

                        

                        9.8Boston

                        167.10

                        

                        157.89

                        

                        5.8

                        

                        

                        153.37

                        

                        150.49

                        

                        1.9RevPAR ($)Three Months Ended June 30,

                        

                        Six Months Ended June 30,2008

                        

                        2007

                        

                        %Variance

                        

                        2008

                        

                        2007

                        

                        %VarianceSouth Florida

                        107.99

                        

                        98.50

                        

                        9.6

                        

                        

                        140.68

                        

                        135.02

                        

                        4.2Atlanta

                        91.61

                        

                        94.51

                        

                        (3.1

                        )

                        

                        94.25

                        

                        93.92

                        

                        0.4Los Angeles area

                        123.99

                        

                        125.21

                        

                        (1.0

                        )

                        

                        119.72

                        

                        121.04

                        

                        (1.1

                        )San Francisco area

                        113.70

                        

                        109.33

                        

                        4.0

                        

                        

                        105.19

                        

                        98.48

                        

                        6.8Orlando

                        84.56

                        

                        83.32

                        

                        1.5

                        

                        

                        93.31

                        

                        90.21

                        

                        3.4Dallas

                        85.22

                        

                        80.52

                        

                        5.8

                        

                        

                        88.09

                        

                        86.23

                        

                        2.2Minneapolis

                        107.82

                        

                        112.26

                        

                        (4.0

                        )

                        

                        102.48

                        

                        104.23

                        

                        (1.7

                        )Phoenix

                        90.01

                        

                        92.55

                        

                        (2.7

                        )

                        

                        115.68

                        

                        120.05

                        

                        (3.6

                        )Northern New Jersey

                        125.50

                        

                        120.84

                        

                        3.8

                        

                        

                        116.49

                        

                        105.98

                        

                        9.9San Diego

                        140.60

                        

                        115.43

                        

                        21.8

                        

                        

                        131.81

                        

                        117.54

                        

                        12.1Washington, D.C.

                        114.67

                        

                        124.72

                        

                        (8.1

                        )

                        

                        93.06

                        

                        116.59

                        

                        (20.2

                        )Chicago

                        107.90

                        

                        100.61

                        

                        7.2

                        

                        

                        93.22

                        

                        87.11

                        

                        7.0San Antonio

                        96.25

                        

                        92.51

                        

                        4.0

                        

                        

                        92.00

                        

                        85.65

                        

                        7.4Philadelphia

                        130.44

                        

                        105.59

                        

                        23.5

                        

                        

                        107.80

                        

                        87.19

                        

                        23.6Boston

                        142.60

                        

                        110.77

                        

                        28.7

                        

                        

                        118.35

                        

                        91.92

                        

                        28.8
   39
  
 Hotel Portfolio Listing  The following table provides the name, location, number of rooms, our ownership percentage and brand names of each of our hotels.  State

                        

                        

                        Rooms

                        

                        

                        % Owned

                        (a)

                        

                        BrandConsolidated HotelsBirmingham(b)

                        AL

                        242

                        

                        Embassy Suites HotelPhoenix – Biltmore(b)

                        AZ

                        232

                        

                        Embassy Suites HotelPhoenix Crescent Hotel(b)

                        AZ

                        342

                        

                        SheratonPhoenix Tempe(b)

                        AZ

                        224

                        

                        Embassy Suites HotelDana Point – Doheny Beach

                        CA

                        196

                        

                        Doubletree Guest SuitesIndian Wells – Esmeralda Resort & Spa(b)

                        CA

                        560

                        

                        Renaissance ResortLos Angeles – Anaheim (Located near Disneyland Park)(b)

                        CA

                        222

                        

                        Embassy Suites HotelLos Angeles – El Segundo – International Airport –South

                        CA

                        349

                        97%

                        Embassy Suites HotelMilpitas – Silicon Valley(b)

                        CA

                        266

                        

                        Embassy Suites HotelNapa Valley(b)

                        CA

                        205

                        

                        Embassy Suites HotelOxnard – Mandalay Beach Resort & Conference Center

                        CA

                        248

                        

                        Embassy Suites HotelSan Diego – On the Bay

                        CA

                        600

                        

                        Holiday InnSan Francisco – Burlingame Airport

                        CA

                        340

                        

                        Embassy Suites HotelSan Francisco – South San Francisco Airport(b)

                        CA

                        312

                        

                        Embassy Suites HotelSan Francisco – Fisherman’s Wharf

                        CA

                        585

                        

                        Holiday InnSan Francisco – Hotel 480 Union Square

                        CA

                        403

                        

                        Independent(c)San Rafael – Marin County/Conference Center(b)

                        CA

                        235

                        50%

                        Embassy Suites HotelSanta Barbara – Goleta

                        CA

                        160

                        

                        Holiday InnSanta Monica – Beach at the Pier

                        CA

                        132

                        

                        Holiday InnWilmington(b)

                        DE

                        244

                        90%

                        DoubletreeBoca Raton(b)

                        FL

                        263

                        

                        Embassy Suites HotelCocoa Beach – Oceanfront

                        FL

                        500

                        

                        Holiday InnDeerfield Beach – Boca Raton/Deerfield Beach Resort(b)

                        FL

                        244

                        

                        Embassy Suites HotelFt. Lauderdale – 17th Street(b)

                        FL

                        358

                        

                        Embassy Suites HotelFt. Lauderdale – Cypress Creek(b)

                        FL

                        253

                        

                        Sheraton SuitesJacksonville – Baymeadows(b)

                        FL

                        277

                        

                        Embassy Suites HotelMiami – International Airport(b)

                        FL

                        318

                        

                        Embassy Suites HotelOrlando – International Airport(b)

                        FL

                        288

                        

                        Holiday InnOrlando – International Drive – Resort

                        FL

                        652

                        

                        Holiday InnOrlando – International Drive South/Convention Center(b)

                        FL

                        244

                        

                        Embassy Suites HotelOrlando– (North)

                        FL

                        277

                        

                        Embassy Suites HotelOrlando – Walt Disney World Resort

                        FL

                        229

                        

                        Doubletree Guest SuitesSt. Petersburg – Vinoy Resort & Golf Club(b)

                        FL

                        361

                        

                        Renaissance ResortTampa– On Tampa Bay(b)

                        FL

                        203

                        

                        Doubletree Guest SuitesAtlanta – Airport(b)

                        GA

                        232

                        

                        Embassy Suites HotelAtlanta – Buckhead(b)

                        GA

                        316

                        

                        Embassy Suites HotelAtlanta – Galleria(b)

                        GA

                        278

                        

                        Sheraton SuitesAtlanta – Gateway – Atlanta Airport

                        GA

                        395

                        

                        SheratonAtlanta – Perimeter Center(b)

                        GA

                        241

                        50%

                        Embassy Suites HotelChicago – Lombard/Oak Brook(b)

                        IL

                        262

                        50%

                        Embassy Suites HotelChicago – Northshore/Deerfield (Northbrook) (b)

                        IL

                        237

                        

                        Embassy Suites HotelChicago – O’Hare Airport(b)

                        IL

                        296

                        

                        Sheraton SuitesIndianapolis – North(b)

                        IN

                        221

                        75%

                        Embassy Suites HotelKansas City – Overland Park(b)

                        KS

                        199

                        50%

                        Embassy Suites HotelLexington – Lexington Green(b)

                        KY

                        174

                        

                        Hilton Suites
   40
  
 Hotel Portfolio Listing (continued)  State

                        

                        

                        Rooms

                        

                        

                        % Owned(a)

                        

                        

                        BrandBaton Rouge(b)

                        LA

                        223

                        

                        Embassy Suites HotelNew Orleans(b)

                        LA

                        370

                        

                        Embassy Suites HotelNew Orleans – French Quarter

                        LA

                        374

                        

                        Holiday InnBoston – Beacon Hill

                        MA

                        303

                        

                        Holiday InnBoston – Marlborough(b)

                        MA

                        229

                        

                        Embassy Suites HotelBaltimore – BWI Airport(b)

                        MD

                        251

                        90%

                        Embassy Suites HotelBloomington(b)

                        MN

                        218

                        

                        Embassy Suites HotelMinneapolis – Airport(b)

                        MN

                        310

                        

                        Embassy Suites HotelSt. Paul – Downtown(b)

                        MN

                        208

                        

                        Embassy Suites HotelKansas City – Plaza

                        MO

                        266

                        50%

                        Embassy Suites HotelCharlotte(b)

                        NC

                        274

                        50%

                        Embassy Suites HotelCharlotte SouthPark

                        NC

                        208

                        

                        Doubletree Guest SuitesRaleigh(b)

                        NC

                        203

                        

                        Doubletree Guest SuitesRaleigh – Crabtree(b)

                        NC

                        225

                        50%

                        Embassy Suites HotelParsippany(b)

                        NJ

                        274

                        50%

                        Embassy Suites HotelPiscataway – Somerset(b)

                        NJ

                        221

                        

                        Embassy Suites HotelSecaucus – Meadowlands(b)

                        NJ

                        261

                        50%

                        Embassy Suites HotelPhiladelphia – Historic District

                        PA

                        364

                        

                        Holiday InnPhiladelphia – Society Hill(b)

                        PA

                        365

                        

                        SheratonPittsburgh – At University Center (Oakland)(b)

                        PA

                        251

                        

                        Holiday InnCharleston – Mills House (Historic Downtown)(b)

                        SC

                        214

                        

                        Holiday InnMyrtle Beach – At Kingston Plantation

                        SC

                        255

                        

                        Embassy Suites HotelMyrtle Beach Resort

                        SC

                        385

                        

                        HiltonNashville – Airport/Opryland Area

                        TN

                        296

                        

                        Embassy Suites HotelNashville – Opryland/Airport (Briley Parkway)

                        TN

                        383

                        

                        Holiday InnAustin(b)

                        TX

                        189

                        90%

                        Doubletree Guest SuitesAustin – Central(b)

                        TX

                        260

                        50%

                        Embassy Suites HotelCorpus Christi(b)

                        TX

                        150

                        

                        Embassy Suites HotelDallas – DFW International Airport-South(b)

                        TX

                        305

                        

                        Embassy Suites HotelDallas – Love Field(b)

                        TX

                        248

                        

                        Embassy Suites HotelDallas – Market Center

                        TX

                        244

                        

                        Embassy Suites HotelDallas – Park Central

                        TX

                        536

                        60%

                        WestinHouston – Medical Center

                        TX

                        287

                        

                        Holiday Inn & SuitesSan Antonio – International Airport(b)

                        TX

                        261

                        50%

                        Embassy Suites HotelSan Antonio – International Airport(b)

                        TX

                        397

                        

                        Holiday InnSan Antonio – N.W. I-10(b)

                        TX

                        216

                        50%

                        Embassy Suites HotelBurlington Hotel & Conference Center(b)

                        VT

                        309

                        

                        SheratonVienna – At Tysons Corner(b)

                        VA

                        443

                        50%

                        SheratonCanadaToronto – Airport

                        Ontario

                        446

                        

                        Holiday InnToronto – Yorkdale

                        Ontario

                        370

                        

                        Holiday InnUnconsolidated OperationsHays(b)

                        KS

                        191

                        50%

                        Holiday InnSalina(b)

                        KS

                        192

                        50%

                        Holiday InnSalina – I-70(b)

                        KS

                        93

                        50%

                        Holiday Inn Express & SuitesNew Orleans – Chateau LeMoyne (In French

                            Quarter/Historic Area)(b)

                        LA

                        171

                        50%

                        Holiday Inn
  (a)

                        We own 100% of the real estate interests unless otherwise noted.
 (b)

                        This hotel was encumbered by mortgage debt or a capital lease obligation at June 30, 2008.
 (c)

                        Upon the completion of its renovation, in early 2009, this hotel will be rebranded as a Marriott.
  41
  
 Liquidity and Capital Resources  Hotel operations provide most of the cash needed to meet our cash requirements, including distributions to unitholders and repayments of indebtedness. For the six months ended June 30, 2008, net cash flow provided by operating activities, consisting primarily of hotel operations, was $97.6 million. At June 30, 2008, we had $71 million of cash on hand, including
            approximately $47 million held under management agreements to meet minimum working capital requirements.  We declared and paid a $0.35 per unit common distribution for both the first and second quarter of 2008. Based on our recently revised forecasts for the second half of the year and limited visibility for 2009, we intend to lower our common distribution payment to $0.15 per unit effective the third quarter of 2008. Given this limited visibility and our focus on liquidity and leverage,
            we are taking a more conservative approach by setting the new distribution to more closely reflect FelCor’s taxable net income distribution requirement, and will adjust it accordingly to meet our targeted payout ratio. The distribution reduction would equate to annual cash flow savings of approximately $50 million. FelCor’s board of directors will determine the amount of future common and preferred distributions for each quarter, based upon the actual operating
            results for that quarter, economic conditions, other operating trends, its financial condition and capital requirements, as well as FelCor’s minimum REIT distribution requirements.  We currently expect to have approximately $179 million to $185 million of cash flow from operating activities for 2008. This forecast assumes that RevPAR increases between 4.0% and 5.0% and Hotel EBITDA margin increases of approximately 40 basis points. Our current operating plan for 2008 contemplates that we will make aggregate common distribution payments of
            $80 million, preferred distribution payments of $39 million and normal recurring principal payments of $22 million, leaving surplus cash flow (before capital expenditures or additional debt reduction) of approximately $38 to $44 million. In 2008, we plan to spend approximately $150 million for capital expenditures, which will be funded from cash and borrowings under our line of credit. In July 2008, we repaid our maturing $15.5 million mortgage note
            with borrowing under our line of credit, and we have no remaining scheduled debt maturities until 2009.  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 lends volatility in our operating results. If our
            hotel RevPAR decreases and/or Hotel EBITDA margins shrink, our operations, earnings and/or cash flow could suffer a material adverse effect.  Debt  Line of Credit
 At June 30, 2008, we had borrowings of $45 million outstanding under our $250 million line of credit. The interest rate on our line of credit was LIBOR plus 0.80% at June 30, 2008.  Mortgage Debt At June 30, 2008, we had $947 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. These hotels currently exceed the minimum debt service
            coverage ratio; however, under the terms of the loan agreements, the lock-box provisions remain in place until the loan is repaid. None of these hotels have ever fallen below the applicable debt 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 to meet 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. At June 30, 2008, the debt service coverage ratio for both hotels exceeded 1:1.  42
  
  Our hotel mortgage debt is non-recourse to us and most contain provisions 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.  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 meet FelCor’s REIT qualification test; repurchase partnership units; or merge. As of the date of this filing, we have satisfied all such tests. Under the terms of one of our indentures, we are prohibited from repurchasing any of our partnership 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 satisfy the 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,or making distributions on our preferred or common units, except to the extent necessary to satisfy FelCor’s REIT qualification requirement that it distribute currently at least 90%
            of its taxable income.  We currently anticipate that we will meet our financial covenant and incurrence tests based on current RevPAR expectations. For 2008, we currently anticipate that our full year 2008 portfolio RevPAR will be 4.0% to 5.0% higher than 2007.  Other Debt. In late 2007, we were notified that a AAA-rated money 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 $4.3 million and in July 2008 have repaid the short-term loan.  Interest Rate Caps. To fulfill requirements under certain loans, we owned interest rate caps with aggregate notional amounts of $427.2 million at both June 30, 2008 and December 31, 2007. These interest rate cap agreements were not designated as hedges and have insignificant fair values at both June 30, 2008 and December 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. Competition may, 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 quarterly fluctuations in our revenues. Quarterly earnings also may be adversely affected by events beyond our control, such as 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.  43
  
 Disclosure Regarding Forward-Looking Statements  This report and the documents incorporated by reference in this report 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.  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, or the SEC.  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 deviations from these plans, intentions or
            expectations will not be material. 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 to the SEC. We undertake no obligation to publicly update any forward-looking statements to reflect future circumstances or changes in our expectations.  Item 3. Quantitative and Qualitative Disclosures About Market Risk  Quantitative and Qualitative Disclosures About Market Risk  At June 30, 2008, approximately 53% of our consolidated debt had fixed interest rates.
  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.  44
  
 Expected Maturity Date at June 30, 2008 (dollars in thousands)  2008

                        

                        

                        2009

                        

                        

                        2010

                        

                        

                        2011

                        

                        

                        2012

                        

                        Thereafter

                        

                        

                        Total

                        

                        

                        Fair ValueLiabilitiesFixed rate:Debt

                        $

                        7,090

                        

                        $

                        142,427

                        

                        $

                        274,014

                        

                        $

                        303,029

                        

                        $

                        2,415

                        

                        $

                        75,836

                        

                        $

                        804,811

                        

                        $

                        828,268Average interest rate

                        

                        8.00%

                        

                        

                        7.27%

                        

                        

                        8.70%

                        

                        

                        8.49%

                        

                        

                        6.49%

                        

                        

                        6.54%

                        

                        

                        8.15%Floating rate:Debt

                        

                        270,054

                        

                        

                        177,483

                        

                        

                        -

                        

                        

                        260,000

                        

                        

                        -

                        

                        

                        -

                        

                        

                        707,537

                        

                        

                        658,055Average interest rate

                        

                        4.16%

                        

                        

                        5.10%

                        

                        

                        -

                        

                        

                        6.42%

                        

                        

                        -

                        

                        

                        -

                        

                        

                        5.23%Total debt

                        $

                        277,144

                        

                        $

                        319,910

                        

                        $

                        274,014

                        

                        $

                        563,029

                        

                        $

                        2,415

                        

                        $

                        75,836

                        

                        $

                        1,512,348Average interest rate

                        

                        4.26%

                        

                        

                        6.07%

                        

                        

                        8.70%

                        

                        

                        7.53%

                        

                        

                        6.49%

                        

                        

                        6.54%

                        

                        

                        6.78%Net discount

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        (1,813

                        )Total debt

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        

                        $

                        1,510,535
  Item 4. Controls and Procedures  (a)Evaluation of disclosure controls and procedures.           We have no employees. As a limited partnership, we are managed by our general partner. Under the supervision and with the participation of FelCor’s management,
            including its chief executive officer and chief financial 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) promulgated under 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’s chief executive officer and chief financial 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 to FelCor’s management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.  (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.  45
  
 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 Exhibit10.1

                        FelCor Lodging Trust Incorporated 2005 Restricted Stock and Stock Option Plan (including amendments) (filed as Exhibit 4.4 to FelCor’s Registration Statement on Form S-8 (Registration No. 333-151066) and incorporated herein by reference).31.1

                        Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2

                        Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1

                        Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2

                        Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   46
  
  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 PARTNERSHIPa Delaware Limited PartnershipBy:

                        FelCor Lodging Trust IncorporatedIts General PartnerDate: August 6, 2008

                        By:

                        /s/ Lester C. JohnsonName: Lester C. Johnson

                            Title:    Senior Vice President and Chief Accounting Officer
    47