1048789--3/15/2006--FelCor_Lodging

related topics

{provision, law, control}

{debt, indebtedness, cash}

{loan, real, estate}

{investment, property, distribution}

{acquisition, growth, future}

{competitive, industry, competition}

{personnel, key, retain}

{regulation, change, law}

{stock, price, operating}

Our financial leverage is high. We have restrictive debt covenants that could adversely affect our ability to finance our operations or engage in other business activities. Future or existing relationships may result in certain of FelCor s directors and officers having interests that conflict with ours. We are subject to the risks inherent in the hospitality industry. Our ability to grow or sustain our business may be limited by our ability to attract debt or equity financing, and we may have difficulty accessing capital on attractive terms. We own, and may acquire, interests in hotel joint ventures with third parties that expose us to some risk of additional liabilities or capital requirements. As a REIT, FelCor is subject to specific tax laws and regulations, the violation of which could subject us to significant tax liabilities. Departure of FelCor s key personnel would deprive us of the institutional knowledge, expertise and leadership they provide. We are subject to the risks of real estate ownership, which could increase our costs of operations. FelCor s charter contains limitations on ownership and transfer of shares of its stock that could adversely affect attempted transfers of FelCor s capital stock. Some provisions in FelCor s charter and bylaws and Maryland law make a takeover of FelCor more difficult.

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1048789--3/15/2006--FelCor_Lodging_LP