Financial Highlights: 

First Quarter 2000 (as compared to first quarter 1999):

• Revenues, after adding back deferred rent of $8.9 million, increased 7% from $126.9 million to $135.7 million
• EBITDA increased 5.1% from $106.9 million to $112.4 million
• EBITDA per share and unit increased 16.3% from $1.41 to $1.64
• FFO per share and unit increased 3.1% from $0.97 to $1.00
• Net income per share, after adding back deferred rent of $8.9 million, decreased from $0.45 to $0.36
• Total hotel portfolio (188 hotels) RevPAR increased 6.0%
• Comparable hotels (149 hotels) RevPAR increased 2.8% 
• Non-comparable hotels (39 hotels) RevPAR increased 20.7%

• Completed renovations at five hotels during the quarter with 11 additional hotels undergoing renovation at the end of the quarter.
• Added 90 rooms to our Doubletree^® hotel in Wilmington, Delaware.
• Renovation expenditures on the hotel portfolio totaled $14.7 million during the quarter and an additional $9.9 million was spent on maintenance capital expenditures.
• Room nights out-of-service, due to renovation, were less than 1% during the quarter.

Capitalization:

• During the first quarter 2000, FelCor repurchased a total of approximately 2.4 million common shares for approximately $42.7 million.

• On April 26, 2000, FelCor closed a 10-year, $145 million First Mortgage Term Loan, which is secured by seven Sheraton^® hotels and carries an 8.73% fixed interest rate. On May 2, 2000, FelCor closed $186 million of 10-year, First Mortgage Term Loans which are secured by eight Embassy Suites^® hotels and carry an 8.69% fixed interest rate. The loans are non-recourse, mature in May 2010, and amortize over 25 years. The proceeds of these loans were used to fund FelCor�s share repurchase program and reduce borrowings under its $850 million Line of Credit.

• FelCor declared first quarter dividends of $0.55 per share on its Common Stock (an annualized dividend yield of approximately 10.9% as of May 1, 2000), $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. 

Net income available to common shareholders, after adding back rent deferred under Staff Accounting Bulletin No. 101 (SAB 101), declined from $30.6 million to $21.6 million in the first quarter 2000.

• Starting in 2000, 68 of FelCor�s 188 hotels� Percentage Leases were changed to provide for the computation of rent on an annual, rather than quarterly basis, which should result in no change in annual Percentage Rent or cash flows. However, the change requires the deferral of $8.9 million of revenue during the First Quarter 2000 under SAB 101. This deferred rent is expected to be fully earned and recognized as Percentage Lease Revenue by the end of 2000.

• Taxes, insurance and other, as a percentage of total revenues after adding back deferred rent, increased from 13% to 14% for the quarter. This increase is primarily the result of increased real estate tax assessments from the hotel acquisitions and approximately $500 million of renovations over the past several years.

• Depreciation expense, as a percentage of total revenues after adding back deferred rent, increased from 29% to 30% for the quarter. This increase resulted primarily from $235 million in capital expenditures during 1999 and first quarter 2000.

• Interest expense increased, as a percentage of total revenue after adding back deferred rent, from 22% to 28% for the quarter over the prior year period. In 1999, FelCor refinanced less expensive short term debt totaling more than $600 million to extend maturities, resulting in increased interest expense. In addition, FelCor�s total borrowings have increased by approximately $230 million since March 31, 1999, primarily to fund its renovation, redevelopment and rebranding program, and share repurchases.

Comparable hotel RevPAR changes for the first quarter 2000 versus 1999 are as follows:

FelCor�s conservative financial profile is evidenced by the following at March 31, 2000:

• Annual interest coverage ratio of 3.1x
• Total debt to annual EBITDA of 4.6x
• Consolidated debt equal to 42% of its investment in hotels at cost
• Annual FFO payout ratio of approximately 55%

• Borrowing capacity of $447 million under its Line of Credit
• Fixed interest rate debt equal to 67% of total debt
• Weighted average maturity of fixed interest rate debt of approximately seven years
• Mortgage debt-to-total assets of 19%
• Debt of approximately $41 million maturing in 2000

In April, the Company updated its website at www.felcor.com to offer a new design, improved navigation and new hotel photography along with more financial information for its shareholders. The new investor relations enhancements include a corporate overview, historical stock charts and price history tables, analyst coverage, earnings estimates and financial fundamentals such as dividend information, institutional ownership and performance ratios.

FelCor�s hotel portfolio consists of 188 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 $3.4 billion. Additional information can be found on the Company�s website at www.felcor.com.

DJONT Non-comparable Hotels include 18 hotels and Bristol Non-comparable Hotels include 21 hotels undergoing redevelopment in 
either the first quarter 2000 or 1999.