FelCor Revises 2Q Earnings Guidance

IRVING, TX— FelCor Lodging Trust, one of the nations largest hotel REITs, is lowering its second quarter earnings guidance as a result of a slower than expected economic recovery and the related weak lodging demand of corporate transient travelers. The company estimates second quarter Funds From Operations (FFO) per share of $0.65 to $0.70, compared to the current analyst consensus estimates of $0.77, and expects EBITDA for the quarter of $92 million to $96 million. In addition, RevPAR was down 8.9% in April, 13.1% in May, and 9.5% for the first 18 days of June— compared to the same periods for 2001. Combined, the companys 2002 RevPAR for the second quarter period through June 18, was 10.5% below that of the same period last year. However, FelCors hotel portfolio occupancy is relatively strong, with occupancy estimated to be approximately 65% for the second quarter of 2002. Approximately 57% of the companys decline in RevPAR for the second quarter through June 18, compared to the same period of 2001, is the result of a decline in average daily rate (ADR). Although RevPAR for the second quarter is below previously provided guidance, it reflects substantial improvement from the first quarter RevPAR decline of 18.1%. At the end of the second quarter, FelCor anticipates that it will have $125 million to $135 million of cash and cash equivalents and a fully paid down line of credit, which has $615 million of capacity. The company has no near term debt maturities, and its weighted average debt life is seven years.