In April 2000, Bass Hotels & Resorts acquired the interests as a result of its acquisition of Bristol Hotels & Resorts. As permitted by the REIT Modernization Act, which became effective January 1, 2001, FelCor will acquire the lessee interests held by Bass and contribute them to a taxable REIT subsidiary of FelCor. Bass will continue to manage the properties under long term management contracts.  For financial reporting purposes, a portion of the future management fees to be paid under the long term management agreements (having a present value of approximately $125 million) will be considered by FelCor as lease termination costs and will be expensed in the third quarter of 2001.  A corresponding liability will be set up on FelCor�s books and amortized over the term of the management agreements.

�The completion of this transaction allows us to better align our interests with those of our trusted brand owner/manager, Bass Hotels & Resorts,� said Thomas J. Corcoran, Jr., FelCor�s President & CEO.  

In February 2001, FelCor announced the completion, subject to certain lender consents, of its acquisition of all the equity interests in DJONT, which lease its Hilton and Starwood-branded hotels, effective January 1, 2001.  DJONT also was contributed to a taxable REIT subsidiary.  The cost of acquiring DJONT, together with assumed liabilities, will be expensed in the first quarter 2001.
FelCor�s hotel portfolio consists of 186 hotels with 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 $3.5 billion. 

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.