• Renovation Projects Completed in Second Quarter 1999
• Hotel Performance Statistics (all hotels)

FFO results for the quarter were in line with consensus analyst estimates.

Second Quarter Highlights:

Financial Performance:

• Revenues increased 101%
• EBITDA increased 87% and EBITDA per share increased 10%
• Net income available to common shareholders increased 73%
• FFO per share and unit increased 5.0%
• Total portfolio (184 hotels) RevPAR increased 1.3% and comparable hotels (134 hotels) RevPAR increased 0.3%
• Crowne Plaza^® non-comparable hotels (10 hotels) RevPAR increased 22.6%
• Holiday�branded comparable hotels (37 hotels) RevPAR increased 1.8%
• Doubletree-branded comparable hotels (15 hotels) RevPAR increased 3.2%
• Sold two non-strategic hotels for an aggregate sales price of $5.4 million

• Completed renovations at 20 hotels totaling $123.6 million 
• Ten additional hotels are undergoing renovation
• Capital expenditures to the hotel portfolio totaled $67 million 
• Approximately 2.5% of room nights were out-of-service

• Raised $550 million of new long-term debt (five and 10 year maturities), which was used to prepay the $250 million term loan due December 31, 1999, and reduce outstanding borrowings under the Company�s Line of Credit. An extraordinary charge of $1.1 million was incurred for the early retirement of the $250 million term loan.
• Declared dividends of $0.55 per share on its Common Stock (current annualized dividend yield of 11.5%), $0.4875 per share on its $1.95 Series A Cumulative Convertible Preferred Stock and $0.5625 per depositary share evidencing its 9% Series B Cumulative Redeemable Preferred Stock.

before extraordinary charge

$ 0.53

$ 1.05

 FelCor�s total hotel portfolio RevPAR increased 1.3% for the quarter and 1.5% year to date. The comparable hotel portfolio RevPAR increased 0.3% for the quarter and 0.6% year to date. Changes in comparable hotel RevPAR for the quarter, by brand, are as follows:

Embassy Suites hotels in New Orleans, Louisiana (90), Jacksonville, Florida (67) and Orlando, Florida (67). Revenue at these hotels increased 13% in the quarter.

 Hotels in California, Texas, Florida and Georgia account for approximately 54% of the total comparable hotels� room revenues in the quarter. RevPAR changes for the second quarter 1999 versus 1998 and the percentage of the total comparable hotels� room revenues from these four states are as follows:

RevPAR increased 3.9% for the non-comparable hotels in the quarter and 3.1% year to date. Included in the non-comparable hotels for the quarter are 25 hotels which completed renovation programs in 1998 and 25 hotels undergoing renovation in 1999. RevPAR increased 16.5% in the quarter for those hotels that completed their renovation program in 1998 and RevPAR decreased 18.2% for those hotels undergoing renovation in 1999.

Highlights from the non-comparable hotel portfolio include 10 Crowne Plaza hotels, which produced a 22.6% average increase in RevPAR for the quarter over the prior year quarter. More significantly, the average daily rate (ADR) at these 10 Crowne Plaza hotels increased 14.0% for the quarter over the prior year quarter. Likewise, ADR at the Bristol-managed non-comparable hotels (35 hotels) increased 10.9% in the quarter.

Hotel Renovation, Redevelopment, and Rebranding:

Through June 30, 1999, FelCor had spent $129 million (of a planned $160 million) on 1999 renovations, redevelopment, and rebranding at more than 50 hotels. An additional $20 million of capital expenditures were made to maintain the remaining hotels in a competitive condition. During the quarter, approximately $56 million was spent on the 1999 renovation program and $11 million was spent on other capital improvements. The renovation and redevelopment program for 1999 was approximately 80% complete as of the end of the second quarter. Approximately $50 million of renovations were completed at the Allerton Crowne Plaza hotel in Chicago, Illinois, which was closed during most of the first half of 1999. The remaining 1999 renovation expenditures will be used to complete the 10 projects in process at the end of the second quarter and to complete 10 additional smaller renovation projects. In 2000, FelCor expects to spend approximately $40 million under its renovation and redevelopment program.

Thirty hotels (18 of which are Bristol-operated hotels) were undergoing renovation, redevelopment, or rebranding during the quarter, which resulted in approximately 113,000 room nights out-of-service, or approximately 2.5% of available room nights. This included 15 Holiday Inn or Holiday Inn Select, six Embassy Suites, three Doubletree, three Sheraton, and three Crowne Plaza hotels. Approximately 3.0% of available rooms were out-of-service for the first six months of 1999. Many of these projects include renovations to the hotels� exterior, public areas, meeting spaces and restaurants, which typically has a negative impact on hotel revenues. 

Included in the 30 hotels undergoing renovation during the quarter were 20 hotels, containing approximately 5,800 rooms, where the renovations were completed during the quarter. Many of these renovation projects began in 1998. The renovation and redevelopment expenditures on these 20 hotels totaled $123.6 million. A listing of these hotels is included as supplemental information in this press release.

"Through June 30, 1999, over $550 million of capital improvements have been made to FelCor�s hotel portfolio since FelCor and Bristol became public companies in 1994 and 1995, respectively. This is in addition to the normal yearly capital expenditures of approximately 4% of room revenues and aggressive maintenance and repair programs. Because of these recent capital improvements, we believe that our hotels are in better condition than the industry average," stated Corcoran.

Capitalization:

During the second quarter, FelCor completed $550 million of long-term debt financings. The proceeds from these loans were used to prepay FelCor�s $250 million unsecured term loan, which was to mature on December 31, 1999, and to reduce outstanding borrowings under its existing $850 million Line of Credit. These debt financings consisted of:

• A Five-year, $375 million Senior Term Loan (LIBOR + 250 bps)
• A Ten-year, $100 million Mortgage debt (7.54% Fixed)
• A Ten-year, $75 million Mortgage debt (7.55% Fixed)

FelCor�s conservative financial profile is evidenced by the following:

• Interest coverage ratio of 3.5x 
• Total debt to annualized EBITDA of 4.2x
• Borrowing capacity of $303 million under the Line of Credit 
• Consolidated debt equal to 38% of investment in hotels at cost
• Fixed interest rate debt equal to 62% of total debt
• Weighted average maturity of fixed interest rate debt of approximately six years 
• Mortgage debt-to-total assets of 11%
• Debt of less than $9 million and $32 million maturing in the remainder of 1999 and 2000, respectively.

FelCor�s hotel portfolio consists of 187 hotels and nearly 50,000 rooms and suites and is concentrated primarily in the upscale and full-service segments. FelCor is the owner of the largest number of Embassy Suites, Crowne Plaza, Holiday Inn and independently owned Doubletree-branded hotels. Other leading hotel brands under which FelCor=s hotels are operated include Sheraton Suites, Sheraton and Westin^®. FelCor has a current market capitalization of approximately $3.4 billion. Additional information can be found on the Company�s website at www.felcor.com.

With the exception of historical information, the matters discussed in this news release include "forward looking statements"within the meaning of the federal securities laws that are qualified by cautionary statements contained herein and in FelCor=s filings with the Securities and Exchange Commission.