UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2018~~March 31, 2019



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-220497 (Rangers Sub I, LLC)

Commission File Number 333-39595-01 (FelCor Lodging Limited Partnership)

RANGERS SUB I, LLC

FELCOR LODGING LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)



Maryland (Rangers Sub I, LLC)		30-1001580
Delaware (FelCor Lodging Limited Partnership)		75-2544994
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)



c/o RLJ Lodging Trust
3 Bethesda Metro Center, Suite 1000
Bethesda, Maryland		20814
(Address of Principal Executive Offices)		(Zip Code)

(301) 280-7777

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Rangers Sub I, LLC (refer to the Note below) o Yes ý No

FelCor Lodging Limited Partnership (refer to the Note below) o Yes ý No

Note: As voluntary filers not subject to the filing requirements of the Securities Exchange Act of 1934, the registrants have filed all reports pursuant to Section 13 or 15(d) for the preceding 12 months as if they were subject to such filing requirements.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Rangers Sub I, LLC ý Yes o No

FelCor Lodging Limited Partnership ý Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Rangers Sub I, LLC:



Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	ý	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

FelCor Lodging Limited Partnership:



Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	ý	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Rangers Sub I, LLC o Yes ý No

FelCor Lodging Limited Partnership o Yes ý No

Securities registered pursuant to Section 12(b) of the Exchange Act:



Title of Class	Trading Symbol	Name of Exchange on Which Registered

Not applicable (1)

(1) Neither Rangers Sub I, LLC nor FelCor Lodging Limited Partnership has securities registered pursuant to Section 12(b) of the Act.

As of ~~November 7, 2018,~~May 9, 2019, RLJ Lodging Trust, L.P. owns 100% of the percentage interests of Rangers Sub I, LLC. As of ~~November 7, 2018,~~May 9, 2019, FelCor Holdings Trust, a wholly-owned subsidiary of RLJ Lodging Trust, L.P., owns 99% of the percentage interests of FelCor Lodging Limited Partnership, and Rangers General Partner, LLC, a wholly-owned subsidiary of RLJ Lodging Trust, L.P., owns 1% of the percentage interests of FelCor Lodging Limited Partnership.

EXPLANATORY NOTE

On August 31, 2017 (the "Acquisition Date"), RLJ Lodging Trust ("RLJ"), RLJ Lodging Trust, L.P. ("RLJ LP"), Rangers Sub I, LLC, a wholly owned subsidiary of RLJ LP ("Rangers"), and Rangers Sub II, LP, a wholly owned subsidiary of RLJ LP ("Partnership Merger Sub") consummated the transactions contemplated by the Agreement and Plan of Merger (the "Merger Agreement") dated as of April 23, 2017 with FelCor Lodging Trust Incorporated ("FelCor") and FelCor Lodging Limited Partnership ("FelCor LP"), pursuant to which Partnership Merger Sub merged with and into FelCor LP, with FelCor LP surviving as a wholly owned subsidiary of RLJ LP (the "Partnership Merger"), and, immediately thereafter, FelCor merged with and into Rangers, with Rangers surviving as a wholly owned subsidiary of RLJ LP (the "REIT Merger" and, together with the Partnership Merger, the "Mergers").

Where it is important to distinguish between the entities, we either refer specifically to ~~Rangers; FelCor (as predecessor~~Rangers or to ~~Rangers); or~~ FelCor LP. Otherwise, we use the terms "we" or "our" to refer to ~~(i)~~ Rangers and FelCor LP, collectively (including their consolidated subsidiaries) ~~following the Mergers and (ii) FelCor and FelCor LP, collectively (including their consolidated subsidiaries) prior to consummation of the Mergers, unless the content indicates otherwise.~~.

This quarterly report on Form 10-Q for the quarter ended ~~September 30, 2018~~March 31, 2019 combines the filings for Rangers and FelCor LP. Rangers indirectly owns a 99% partnership interest in FelCor LP. Through FelCor LP, Rangers owns hotel properties and conducts other business.

We believe combining the periodic reports for Rangers and FelCor LP into a single combined report results in the following benefits:

presents the business as a whole (the same way management views and operates the business);

eliminates duplicative disclosure and provides a more streamlined presentation (a substantial portion of our disclosure applies to both Rangers and FelCor LP); and

saves time and cost by preparing combined reports instead of separate reports.

Rangers consolidates FelCor LP for financial reporting purposes. Rangers has no assets other than its indirect investment in FelCor LP and no liabilities separate from FelCor LP. Therefore, the reported assets and liabilities for Rangers and FelCor LP are substantially identical.

RLJ LP owns 100% of Rangers. Rangers indirectly owns 99% of FelCor LP. A wholly-owned subsidiary of RLJ LP owns the remaining 1% of FelCor LP, which is a noncontrolling interest that is reflected within the equity section of the consolidated balance sheets and in the consolidated statements of equity. Apart from the different equity treatment, the consolidated financial statements for Rangers and FelCor LP are nearly identical, except that net income (loss) attributable to the 1% noncontrolling interest in FelCor LP is deducted from Rangers' net income (loss) in order to arrive at net income (loss) attributable to Rangers.

We present the sections in this report combined unless separate disclosure is required for clarity.

~~RLJ accounted for the Mergers noted above under the acquisition method of accounting in ASC 805,~~ ~~Business Combinations~~. In accordance with the guidance, RLJ elected to apply pushdown accounting to our consolidated financial statements in order to reflect the new basis of accounting established by RLJ for the individual assets acquired and the liabilities assumed in the Mergers. Accordingly, our consolidated financial statements for the periods before and after the Acquisition Date reflect different bases of accounting, and the financial positions and the results of operations for those periods are not comparable. As a result, the consolidated financial statements and the notes to those financial statements are separated into two distinct periods; the periods prior to the Acquisition Date are identified as "Predecessor," and the periods after the Acquisition Date are identified as "Successor." The new basis of accounting for the assets and liabilities that existed on the Acquisition Date will be used in the preparation of our future financial statements and footnotes.

Table of Contents

TABLE OF CONTENTS



		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Rangers Sub I, LLC
	Consolidated Financial Statements (unaudited)
	Balance Sheets	1
	Statements of Operations and Comprehensive Income ~~(Loss)~~	2
	Statements of Changes in Equity	43
	Statements of Cash Flows	75
	FelCor Lodging Limited Partnership
	Consolidated Financial Statements (unaudited)
	Balance Sheets	86
	Statements of Operations and Comprehensive Income ~~(Loss)~~	97
	Statements of Partners' Capital	118
	Statements of Cash Flows	1410
	Notes to the Consolidated Financial Statements	1511

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4127
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5333
Item 4.	Controls and Procedures	5434

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	5434
Item 1A.	Risk Factors	5434
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5434
Item 3.	Defaults Upon Senior Securities	5435
Item 4.	Mine Safety Disclosures	5535
Item 5.	Other Information	5535
Item 6.	Exhibits	5636

Signatures		5737

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Rangers Sub I, LLC

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)


	September 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Assets
Investment in hotel properties, net	$	2,122,454	$	2,497,880	$	2,114,988	$	2,123,423
Investment in unconsolidated joint ventures	15,807		16,912		15,876		15,716
Cash and cash equivalents	15,735		14,728		13,294		21,351
Restricted cash reserves	5,225		3,303		4,111		3,211
Related party rent receivable	45,612		80,090		25,781		16,501
Lease right-of-use assets					83,852		—
Intangible assets, net	46,907		118,170		—		46,260
Prepaid expense and other assets	5,101		12,691		7,472		6,552
Assets of hotel properties held for sale, net	25,177		—
Related party prepaid interest					—		180
Total assets	$	2,282,018	$	2,743,774	$	2,265,374	$	2,233,194

Liabilities and Equity
Debt, net	$	713,632	$	1,299,105	$	624,631	$	626,628
Related party debt					85,000		85,000
Accounts payable and other liabilities	47,042		54,191		26,670		43,389
Related party lease termination fee payable	17,548		7,707
Lease liabilities					49,336		—
Accrued interest	9,588		12,286		9,588		2,463
Related party accrued interest					220		—
Distributions payable	122		126		—		126
Total liabilities	787,932		1,373,415		795,445		757,606

Commitments and Contingencies (Note 9)

Equity
Member's equity:
Member's equity	1,364,041		1,302,739		1,359,436		1,334,154
Retained earnings	65,260		4,090		87,640		76,695
Total member's equity	1,429,301		1,306,829		1,447,076		1,410,849
Noncontrolling interest:
Noncontrolling interest in consolidated joint ventures	5,918		5,900		8,236		6,059
Noncontrolling interest in FelCor LP	14,437		13,200		14,617		14,250
Total noncontrolling interest	20,355		19,100		22,853		20,309
Preferred equity in a consolidated joint venture, liquidation value of $45,515 and $45,430 at September 30, 2018 and December 31, 2017, respectively	44,430		44,430
Preferred equity in a consolidated joint venture, liquidation value of $45,544 at December 31, 2018					—		44,430
Total equity	1,494,086		1,370,359		1,469,929		1,475,588
Total liabilities and equity	$	2,282,018	$	2,743,774	$	2,265,374	$	2,233,194

The accompanying notes are an integral part of these consolidated financial statements.

Rangers Sub I, LLC

Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~

(Amounts in ~~thousands, except share and per share data)~~thousands)

(unaudited)

Successor Predecessor Successor Predecessor
For the three months ended September 30, September 1 through September 30,
July 1
through
August 31,
For the nine months ended September 30, September 1 through
September 30,
January 1 through
August 31,
2018 2017 2017 2018 2017 2017
Revenues
Operating revenues
Room revenue $ —
$ —
$ 111,977
$ —
$ —
$ 425,682
Food and beverage revenue —
—
20,577
—
—
90,572
Related party lease revenue 57,811
20,854
—
172,011
20,854
—
Other revenue —
—
10,417
—
—
35,261
Total revenues $ 57,811
$ 20,854
$ 142,971
$ 172,011
$ 20,854
$ 551,515
Expenses

Operating expenses

Room expense $ —
$ —
$ 28,652
$ —
$ —
$ 112,813
Food and beverage expense —
—
17,325
—
—
71,828
Management and franchise fee expense —
—
4,625
—
—
19,901
Other operating expense —
—
37,272
—
—
147,827
Total property operating expenses —
—
87,874
—
—
352,369
Depreciation and amortization 19,292
5,974
17,699
60,496
5,974
73,065
Impairment loss —

—
—
—
—
35,109
Property tax, insurance and other 13,947
4,449
12,647
42,834
4,449
44,278
General and administrative (564 ) 192
2,785
595
192
16,006
Transaction costs 194
1,039
61,932
2,369
1,039
68,248
Total operating expenses 32,869
11,654
182,937
106,294
11,654
589,075
Operating income (loss) 24,942
9,200
(39,966 ) 65,717
9,200
(37,560 )
Other income 1
—
—
111
—
100
Interest income 70
3
46
153
3
126
Interest expense (8,467 ) (4,779 ) (12,908 ) (30,221 ) (4,779 ) (51,690 )
Gain (loss) on sale of hotel properties, net 24,254
—
(891 ) 14,930
—
(1,764 )
(Loss) gain on extinguishment of indebtedness, net (1,656 ) —
(3,278 ) 11,280
—
(3,278 )
Income (loss) before equity in income from unconsolidated joint ventures 39,144
4,424
(56,997 ) 61,970
4,424
(94,066 )
Equity in income from unconsolidated joint ventures 218
115
556
945
115
1,074
Income (loss) before income tax benefit (expense) 39,362
4,539
(56,441 ) 62,915
4,539
(92,992 )
Income tax benefit (expense) —
—
551
—
—
(499 )
Income (loss) from continuing operations 39,362
4,539
(55,890 ) 62,915
4,539
(93,491 )
Loss from discontinued operations —
—
(3,415 ) —
—
(3,415 )

Net income (loss) and comprehensive income (loss) 39,362
4,539
(59,305 ) 62,915
4,539
(96,906 )
Net (income) loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures (52 ) (51 ) 108
(18 ) (51 ) 545
Noncontrolling interest in FelCor LP (389 ) (45 ) 274
(618 ) (45 ) 495
Preferred distributions - consolidated joint venture (374 ) (122 ) (252 ) (1,109 ) (122 ) (979 )
Net income (loss) and comprehensive income (loss) attributable to Rangers 38,547
4,321
(59,175 ) 61,170
4,321
(96,845 )
Preferred dividends —
—
(4,186 ) —
—
(16,744 )
Net income (loss) and comprehensive income (loss) attributable to ownership interests/common shareholders $ 38,547
$ 4,321
$ (63,361 ) $ 61,170
$ 4,321
$ (113,589 )

Basic and diluted per common share data:
Loss from continuing operations per share attributable to common shareholders

$ (0.43 ) $ (0.80 )
Net loss per share attributable to common shareholders

$ (0.46 )

$ (0.83 )
Weighted-average number of common shares

137,904,668

137,331,743



	For the three months ended March 31,
	2019			2018
Revenues
Operating revenues
Related party lease revenue	$	49,921		$	53,550
Total revenues	49,921			53,550
Expenses
Operating expenses
Depreciation and amortization	18,294			20,712
Property tax, insurance and other	10,508			14,831
General and administrative	414			608
Transaction costs	252			1,528
Total operating expenses	29,468			37,679
Other income	49			8
Interest income	95			30
Interest expense	(7,247		)	(13,147		)
Related party interest expense	(1,166		)	—
Loss on sale of hotel properties, net	—			(9,366		)
Gain on extinguishment of indebtedness	—			12,929
Income before equity in income from unconsolidated joint ventures	12,184			6,325
Equity in income from unconsolidated joint ventures	107			116
Net income and comprehensive income	12,291			6,441
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	104			76
Noncontrolling interest in FelCor LP	(111		)	(62		)
Preferred distributions - consolidated joint venture	(186		)	(366		)
Redemption of preferred equity - consolidated joint venture	(1,153		)	—
Net income and comprehensive income attributable to Rangers	$	10,945		$	6,089

The accompanying notes are an integral part of these consolidated financial statements.

Rangers Sub I, LLC

Consolidated Statements of Changes in Equity

(Amounts in thousands)

(unaudited)


	Member's Equity					Noncontrolling Interest											Member's Equity					Noncontrolling Interest
	Equity			Retained Earnings		FelCor LP			Consolidated Joint Ventures		Preferred Equity in a Consolidated Joint Venture			Total Equity			Equity			Retained Earnings		FelCor LP			Consolidated Joint Ventures			Preferred Equity in a Consolidated Joint Venture			Total Equity
Successor - Balance at December 31, 2017	$	1,302,739		$	4,090	$	13,200		$	5,900	$	44,430		$	1,370,359
Net income and comprehensive income	—			61,170		618			18		1,109			62,915
Balance at December 31, 2018																	$	1,334,154		$	76,695	$	14,250		$	6,059		$	44,430		$	1,475,588
Net income (loss) and comprehensive income (loss)																	—			10,945		111			(104		)	1,339			12,291
Contributions	667,115			—		6,738			—		—			673,853			73,108			—		738			—			—			73,846
Distributions	(605,813		)	—		(6,119		)	—		—			(611,932		)	(47,826		)	—		(482		)	—			—			(48,308		)
Preferred distributions - consolidated joint venture	—			—		—			—		(1,109		)	(1,109		)	—			—		—			—			(186		)	(186		)
Successor - Balance at September 30, 2018	$	1,364,041		$	65,260	$	14,437		$	5,918	$	44,430		$	1,494,086
Redemption of preferred equity - consolidated joint venture																	—			—		—			—			(45,583		)	(45,583		)
Contributions from joint venture partners																	—			—		—			2,281			—			2,281
Balance at March 31, 2019																	$	1,359,436		$	87,640	$	14,617		$	8,236		$	—		$	1,469,929

The accompanying notes are an integral part of these consolidated financial statements.

~~Rangers Sub I, LLC~~

~~Consolidated Statements of Changes in Equity~~

~~(Amounts in thousands, except share data)~~

~~(unaudited)~~

Shareholders’ Equity Noncontrolling Interest
Preferred Stock Common Stock
Shares Amount Shares
Par
Value

Additional
Paid-in Capital
Accumulated Deficit
Consolidated
Joint
Ventures
Preferred Equity in a Consolidated Joint Venture
Total
Equity
Predecessor - Balance at December 31, 2016 12,879,475
$ 309,337
137,990,097
$ 1,380
$ 2,576,988
$ (2,706,408 ) $ 7,503
$ 43,783
$ 232,583
Net income (loss) and comprehensive income (loss) —
—
—
—
—
(96,845 ) (545 ) 979
(96,411 )
Issuance of stock awards —
—
1,998,497
20
839
—
—
—
859
Amortization of share-based compensation —
—
—
—
11,946
—
—
—
11,946
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock —
—
(893,309 ) (9 ) —
(6,425 ) —
—
(6,434 )
Allocation to the redeemable noncontrolling interests in FelCor LP —
—
—
—
(196 ) —
—
—
(196 )
Contribution from the noncontrolling interests —
—
—
—
—
—
333
—
333
Distribution to noncontrolling interests —
—
—
—
—
—
(150 ) —
(150 )
Distributions on Series A preferred shares —
—
—
—
—
(16,744 ) —
—
(16,744 )
Distributions on common shares and units —
—
—
—
—
(22,468 ) —
—
(22,468 )
Preferred distributions - consolidated joint venture —
—
—
—
—
—
—
(979 ) (979 )
Issuance of preferred equity in a consolidated joint venture —
—
—
—
—
—
—
647
647
Predecessor - Balance at August 31, 2017 12,879,475
$ 309,337
139,095,285
$ 1,391
$ 2,589,577
$ (2,848,890 ) $ 7,141
$ 44,430
$ 102,986

~~The accompanying notes are an integral part of these consolidated financial statements.~~

Rangers Sub I, LLC

Consolidated Statements of Changes in Equity

(Amounts in thousands)

(unaudited)

Member's Equity Noncontrolling Interest
Equity Retained Earnings FelCor LP
Consolidated
Joint
Ventures
Preferred Equity in a Consolidated Joint Venture
Total
Equity

Successor - Balance at September 1, 2017 $ 1,462,053
$ —
$ 14,769
$ 5,157
$ 44,430
$ 1,526,409
Distribution of FelCor TRS (78,882 ) —
(797 ) 78
—
(79,601 )
Net income and comprehensive income —
4,321
45
51
122
4,539
Contributions 35,190
—
355
—
—
35,545
Distributions (18,932 ) —
(191 ) —
—
(19,123 )
Preferred distributions - consolidated joint venture —
—
—
—
(122 ) (122 )
Successor - Balance at September 30, 2017 $ 1,399,429
$ 4,321
$ 14,181
$ 5,286
$ 44,430
$ 1,467,647



	Member's Equity					Noncontrolling Interest
	Equity			Retained Earnings		FelCor LP			Consolidated Joint Ventures			Preferred Equity in a Consolidated Joint Venture			Total Equity
Balance at December 31, 2017	$	1,302,739		$	4,090	$	13,200		$	5,900		$	44,430		$	1,370,359
Net income (loss) and comprehensive income (loss)	—			6,089		62			(76		)	366			6,441
Contributions	592,053			—		5,980			—			—			598,033
Distributions	(205,932		)	—		(2,080		)	—			—			(208,012		)
Preferred distributions - consolidated joint venture	—			—		—			—			(366		)	(366		)
Balance at March 31, 2018	$	1,688,860		$	10,179	$	17,162		$	5,824		$	44,430		$	1,766,455

The accompanying notes are an integral part of these consolidated financial statements.

Rangers Sub I, LLC

Consolidated Statements of Cash Flows

(Amounts in thousands)

(unaudited)


	Successor							Predecessor
	For the nine months ended September 30,			September 1 through September 30,			January 1 through August 31,			For the three months ended March 31,
	2018			2017			2017			2019				2018
Cash flows from operating activities
Net income (loss)	$	62,915		$	4,539		$	(96,906	)
Adjustments to reconcile net income (loss) to cash flow provided by operating activities:
(Gain) loss on sale of hotel properties and other assets, net	(14,930		)	—			5,079
Net income										$	12,291			$	6,441
Adjustments to reconcile net income to cash flow provided by operating activities:
Loss on sale of hotel properties, net										—				9,366
Depreciation and amortization	60,496			5,974			73,065			18,294				20,712
Amortization of deferred financing costs	217			—			2,803			—				72
Other amortization	(2,877		)	(526		)	—			(650		)		(1,533		)
Equity in income from unconsolidated joint ventures	(945		)	(115		)	(1,074		)	(107		)		(116		)
Distributions of income from unconsolidated joint ventures	2,050			750			333			550				250
Amortization of fixed stock and directors' compensation	—			—			3,833
Equity-based severance	—			—			8,372
(Gain) loss on extinguishment of indebtedness, net	(11,280		)	—			3,278
Impairment loss	—			—			35,109
Gain on extinguishment of indebtedness										—				(12,929		)
Changes in assets and liabilities:
Related party rent receivable	34,477			—			—			(9,280		)		33,336
Hotel and other receivables, net	—			(12,582		)	(6,155		)
Prepaid expense and other assets	5,723			12			2,954			(1,034		)		3,300
Related party prepaid interest										180				—
Accounts payable and other liabilities	68			1,349			54,361			(2,376		)		(6,903		)
Advance deposits and deferred revenue	—			—			4,426
Accrued interest	(2,698		)	(10,563		)	9,862			7,125				(2,698		)
Net cash flow provided by (used in) operating activities	133,216			(11,162		)	99,340
Related party accrued interest										220				—
Net cash flow provided by operating activities										25,213				49,298
Cash flows from investing activities
Proceeds from the sale of hotel properties, net	434,361			—			73,416			—				116,624
Improvements and additions to hotel properties	(58,209		)	(55		)	(63,802		)	(13,039		)		(18,141		)
Additions to property and equipment	(4		)	—			—			—				(3		)
Distributions from unconsolidated joint ventures in excess of earnings	—			—			840
Net cash flow provided by (used in) investing activities	376,148			(55		)	10,454
Contributions to unconsolidated joint ventures										(603		)		—
Net cash flow (used in) provided by investing activities										(13,642		)		98,480
Cash flows from financing activities
Proceeds from borrowings	—			—			66,000
Repayments of borrowings	(569,033		)	(471		)	(121,691		)	(650		)		(539,512		)
Repurchase of common shares to satisfy employee withholding requirements	—			—			(6,434		)
Contributions from members	673,853			35,545			—			73,846				598,033
Distributions to members	(610,132		)	(19,123		)	—			(48,308		)		(206,212		)
Distribution of FelCor TRS	—			(51,867		)	—
Distributions on preferred shares	—			—			(18,836		)
Distributions on common shares	—			—			(30,926		)
Distributions on Operating Partnership units	—			—			(134		)
Payments of deferred financing costs	(10		)	—					—			(2		)		(10		)
Distributions to noncontrolling interests	—			—				(150		)
Contributions from noncontrolling interests	—			—				333
Preferred distributions - consolidated joint venture	(1,113		)	(126		)		(977		)	(312		)		(366		)
Net proceeds from the issuance of preferred equity in a consolidated joint venture	—			—				647
Redemption of preferred equity - consolidated joint venture										(45,583		)		—
Contributions from joint venture partners										2,281				—
Net cash flow used in financing activities	(506,435		)	(36,042		)		(112,168		)	(18,728		)		(148,067		)
Net change in cash, cash equivalents, and restricted cash reserves	2,929			(47,259		)		(2,374		)	(7,157		)		(289		)
Cash, cash equivalents, and restricted cash reserves, beginning of period	18,031			64,434				66,808
Cash, cash equivalents, and restricted cash reserves, beginning of year										24,562				18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	20,960		$	17,175			$	64,434		$	17,405			$	17,742

The accompanying notes are an integral part of these consolidated financial statements.

FelCor Lodging Limited Partnership

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)


	September 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Assets
Investment in hotel properties, net	$	2,122,454	$	2,497,880	$	2,114,988	$	2,123,423
Investment in unconsolidated joint ventures	15,807		16,912		15,876		15,716
Cash and cash equivalents	15,735		14,728		13,294		21,351
Restricted cash reserves	5,225		3,303		4,111		3,211
Related party rent receivable	45,612		80,090		25,781		16,501
Lease right-of-use assets					83,852		—
Intangible assets, net	46,907		118,170		—		46,260
Prepaid expense and other assets	5,101		12,691		7,472		6,552
Assets of hotel properties held for sale, net	25,177		—
Related party prepaid interest					—		180
Total assets	$	2,282,018	$	2,743,774	$	2,265,374	$	2,233,194

Liabilities and Partners' Capital
Debt, net	$	713,632	$	1,299,105	$	624,631	$	626,628
Related party debt					85,000		85,000
Accounts payable and other liabilities	47,042		54,191		26,670		43,389
Related party lease termination fee payable	17,548		7,707
Lease liabilities					49,336		—
Accrued interest	9,588		12,286		9,588		2,463
Related party accrued interest					220		—
Distributions payable	122		126		—		126
Total liabilities	787,932		1,373,415		795,445		757,606

Commitments and Contingencies (Note 9)

Partners' Capital
Partners’ capital:
Partners' capital	1,377,819		1,315,898		1,373,168		1,347,630
Retained earnings	65,919		4,131		88,525		77,469
Total partners’ capital, excluding noncontrolling interest	1,443,738		1,320,029		1,461,693		1,425,099
Noncontrolling interest in consolidated joint ventures	5,918		5,900		8,236		6,059
Preferred capital in a consolidated joint venture, liquidation value of $45,515 and $45,430 at September 30, 2018 and December 31, 2017, respectively	44,430		44,430
Preferred capital in a consolidated joint venture, liquidation value of $45,544 at December 31, 2018					—		44,430
Total partners' capital	1,494,086		1,370,359		1,469,929		1,475,588
Total liabilities and partners' capital	$	2,282,018	$	2,743,774	$	2,265,374	$	2,233,194

The accompanying notes are an integral part of these consolidated financial statements.

FelCor Lodging Limited Partnership

Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~

(Amounts in ~~thousands, except unit and per unit data)~~thousands)

(unaudited)

Successor Predecessor Successor Predecessor
For the three months ended September 30,
September 1
through
September 30,

July 1
through
August 31,
For the nine months ended September 30, September 1
through
September 30,
January 1 through
August 31,
2018 2017 2017 2018 2017 2017
Revenues
Operating revenues
Room revenue $ —
$ —
$ 111,977
$ —
$ —
$ 425,682
Food and beverage revenue —
—
20,577
—
—
90,572
Related party lease revenue 57,811
20,854
—
172,011
20,854
—
Other revenue —
—
10,417
—
—
35,261
Total revenues $ 57,811
$ 20,854
$ 142,971
$ 172,011
$ 20,854
$ 551,515
Expenses

Operating expenses

Room expense $ —
$ —
$ 28,652
$ —
$ —
$ 112,813
Food and beverage expense —
—
17,325
—
—
71,828
Management and franchise fee expense —
—
4,625
—
—
19,901
Other operating expense —
—
37,272
—
—
147,827
Total property operating expenses —
—
87,874
—
—
352,369
Depreciation and amortization 19,292
5,974
17,699
60,496
5,974
73,065
Impairment loss —
—
—
—
—
35,109
Property tax, insurance and other 13,947
4,449
12,647
42,834
4,449
44,278
General and administrative (564 ) 192
2,785
595
192
16,006
Transaction costs 194
1,039
61,932
2,369
1,039
68,248
Total operating expenses 32,869
11,654
182,937
106,294
11,654
589,075
Operating income (loss) 24,942
9,200
(39,966 ) 65,717
9,200
(37,560 )
Other income 1
—
—
111
—
100
Interest income 70
3
46
153
3
126
Interest expense (8,467 ) (4,779 ) (12,908 ) (30,221 ) (4,779 ) (51,690 )
Gain (loss) on sale of hotel properties, net 24,254
—
(891 ) 14,930
—
(1,764 )
(Loss) gain on extinguishment of indebtedness, net (1,656 ) —
(3,278 ) 11,280
—
(3,278 )
Income (loss) before equity in income from unconsolidated joint ventures 39,144
4,424
(56,997 ) 61,970
4,424
(94,066 )
Equity in income from unconsolidated joint ventures 218
115
556
945
115
1,074
Income (loss) before income tax benefit (expense) 39,362
4,539
(56,441 ) 62,915
4,539
(92,992 )
Income tax benefit (expense) —
—
551
—
—
(499 )
Income (loss) from continuing operations 39,362
4,539
(55,890 ) 62,915
4,539
(93,491 )

Loss from discontinued operations —
—
(3,415 ) —
—
(3,415 )
Net income (loss) and comprehensive income (loss) 39,362
4,539
(59,305 ) 62,915
4,539
(96,906 )
Net (income) loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures (52 ) (51 ) 108
(18 ) (51 ) 545
Preferred distributions - consolidated joint venture (374 ) (122 ) (252 ) (1,109 ) (122 ) (979 )
Net income (loss) and comprehensive income (loss) attributable to FelCor LP 38,936
4,366
(59,449 ) 61,788
4,366
(97,340 )
Preferred distributions —
—
(4,186 ) —
—
(16,744 )
Net income (loss) and comprehensive income (loss) attributable to FelCor LP partners and common unitholders $ 38,936
$ 4,366
$ (63,635 ) $ 61,788
$ 4,366
$ (114,084 )

Basic and diluted per common unit data:
Loss from continuing operations per unit attributable to common unitholders

$ (0.43 )

$ (0.80 )
Net loss per unit attributable to common unitholders

$ (0.46 )

$ (0.83 )
Weighted-average number of common units 138,514,851

137,941,926



	For the three months ended March 31,
	2019			2018
Revenues
Operating revenues
Related party lease revenue	$	49,921		$	53,550
Total revenues	49,921			53,550
Expenses
Operating expenses
Depreciation and amortization	18,294			20,712
Property tax, insurance and other	10,508			14,831
General and administrative	414			608
Transaction costs	252			1,528
Total operating expenses	29,468			37,679
Other income	49			8
Interest income	95			30
Interest expense	(7,247		)	(13,147		)
Related party interest expense	(1,166		)	—
Loss on sale of hotel properties, net	—			(9,366		)
Gain on extinguishment of indebtedness	—			12,929
Income before equity in income from unconsolidated joint ventures	12,184			6,325
Equity in income from unconsolidated joint ventures	107			116
Net income and comprehensive income	12,291			6,441
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	104			76
Preferred distributions - consolidated joint venture	(186		)	(366		)
Redemption of preferred capital - consolidated joint venture	(1,153		)	—
Net income and comprehensive income attributable to FelCor LP	$	11,056		$	6,151

The accompanying notes are an integral part of these consolidated financial statements.

FelCor Lodging Limited Partnership

Consolidated Statements of Partners' Capital

(Amounts in thousands)

(unaudited)


	Partners' Capital					Noncontrolling Interest								Partners' Capital					Noncontrolling Interest
	Capital			Retained Earnings		Consolidated Joint Ventures		Preferred Capital in a Consolidated Joint Venture			Total Partners' Capital			Capital			Retained Earnings		Consolidated Joint Ventures			Preferred Capital in a Consolidated Joint Venture			Total Partners' Capital
Successor - Balance at December 31, 2017	$	1,315,898		$	4,131	$	5,900	$	44,430		$	1,370,359
Net income and comprehensive income	—			61,788		18		1,109			62,915
Balance at December 31, 2018														$	1,347,630		$	77,469	$	6,059		$	44,430		$	1,475,588
Net income (loss) and comprehensive income (loss)														—			11,056		(104		)	1,339			12,291
Contributions	673,853			—		—		—			673,853			73,846			—		—			—			73,846
Distributions	(611,932		)	—		—		—			(611,932		)	(48,308		)	—		—			—			(48,308		)
Preferred distributions - consolidated joint venture	—			—		—		(1,109		)	(1,109		)	—			—		—			(186		)	(186		)
Successor - Balance at September 30, 2018	$	1,377,819		$	65,919	$	5,918	$	44,430		$	1,494,086
Redemption of preferred equity - consolidated joint venture														—			—		—			(45,583		)	(45,583		)
Contributions from joint venture partners														—			—		2,281			—			2,281
Balance at March 31, 2019														$	1,373,168		$	88,525	$	8,236		$	—		$	1,469,929

The accompanying notes are an integral part of these consolidated financial statements.

FelCor Lodging Limited Partnership

Consolidated Statements of Partners' Capital

(Amounts in thousands)

(unaudited)

Partners’ Capital Noncontrolling Interest
Preferred Units Common Units
Consolidated
Joint
Ventures
Preferred Capital in a Consolidated Joint Venture
Total
Partners' Capital
Predecessor - Balance at December 31, 2016 $ 309,337
$ (128,040 ) $ 7,503
$ 43,783
$ 232,583
Net income (loss) and comprehensive income (loss) —
(97,340 ) (545 ) 979
(96,906 )
Issuance of FelCor restricted stock —
859
—
—
859
Amortization of FelCor share-based compensation —
11,946
—
—
11,946
Shares acquired to satisfy minimum required federal and state tax withholding on vesting FelCor restricted stock —
(6,434 ) —
—
(6,434 )
Allocation to the redeemable units in the Operating Partnership —
433
—
—
433
Contribution from the noncontrolling interests —
—
333
—
333
Distribution to noncontrolling interests —
—
(150 ) —
(150 )
Distributions on preferred units —
(16,744 ) —
—
(16,744 )
Distributions on common units —
(22,602 ) —
—
(22,602 )
Preferred distributions - consolidated joint venture —
—
—
(979 ) (979 )
Issuance of preferred capital in a consolidated joint venture —
—
—
647
647
Predecessor - Balance at August 31, 2017 $ 309,337
$ (257,922 ) $ 7,141
$ 44,430
$ 102,986

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~FelCor Lodging Limited Partnership~~

~~Consolidated Statements of Partners' Capital~~

~~(Amounts in thousands)~~

~~(unaudited)~~

Partners' Capital Noncontrolling Interest
Capital Retained Earnings
Consolidated
Joint
Ventures
Preferred Capital in a Consolidated Joint Venture
Total
Partners' Capital

Successor - Balance at September 1, 2017 $ 1,476,822
$ —
$ 5,157
$ 44,430
$ 1,526,409
Distribution of FelCor TRS (79,679 ) —
78
—
(79,601 )
Net income and comprehensive income —
4,366
51
122
4,539
Contributions 35,545
—
—
—
35,545
Distributions (19,123 ) —
—
—
(19,123 )
Preferred distributions - consolidated joint venture —
—
—
(122 ) (122 )
Successor - Balance at September 30, 2017 $ 1,413,565
$ 4,366
$ 5,286
$ 44,430
$ 1,467,647



	Partners' Capital					Noncontrolling Interest
	Capital			Retained Earnings		Consolidated Joint Ventures			Preferred Capital in a Consolidated Joint Venture			Total Partners' Capital
Balance at December 31, 2017	$	1,315,898		$	4,131	$	5,900		$	44,430		$	1,370,359
Net income (loss) and comprehensive income (loss)	—			6,151		(76		)	366			6,441
Contributions	598,033			—		—			—			598,033
Distributions	(208,012		)	—		—			—			(208,012		)
Preferred distributions - consolidated joint venture	—			—		—			(366		)	(366		)
Balance at March 31, 2018	$	1,705,919		$	10,282	$	5,824		$	44,430		$	1,766,455

The accompanying notes are an integral part of these consolidated financial statements.

FelCor Lodging Limited Partnership

Consolidated Statements of Cash Flows

(Amounts in thousands)

(unaudited)


	Successor							Predecessor
	For the nine months ended September 30,			September 1 through September 30,			January 1 through August 31,			For the three months ended March 31,
	2018			2017			2017			2019				2018
Cash flows from operating activities
Net income (loss)	$	62,915		$	4,539		$	(96,906	)
Adjustments to reconcile net income (loss) to cash flow provided by operating activities:
(Gain) loss on sale of hotel properties and other assets, net	(14,930		)	—			5,079
Net income										$	12,291			$	6,441
Adjustments to reconcile net income to cash flow provided by operating activities:
Loss on sale of hotel properties, net										—				9,366
Depreciation and amortization	60,496			5,974			73,065			18,294				20,712
Amortization of deferred financing costs	217			—			2,803			—				72
Other amortization	(2,877		)	(526		)	—			(650		)		(1,533		)
Equity in income from unconsolidated joint ventures	(945		)	(115		)	(1,074		)	(107		)		(116		)
Distributions of income from unconsolidated joint ventures	2,050			750			333			550				250
Amortization of fixed stock and directors' compensation	—			—			3,833
Equity-based severance	—			—			8,372
(Gain) loss on extinguishment of indebtedness, net	(11,280		)	—			3,278
Impairment loss	—			—			35,109
Gain on extinguishment of indebtedness										—				(12,929		)
Changes in assets and liabilities:
Related party rent receivable	34,477			—			—			(9,280		)		33,336
Hotel and other receivables, net	—			(12,582		)	(6,155		)
Prepaid expense and other assets	5,723			12			2,954			(1,034		)		3,300
Related party prepaid interest										180				—
Accounts payable and other liabilities	68			1,349			54,361			(2,376		)		(6,903		)
Advance deposits and deferred revenue	—			—			4,426
Accrued interest	(2,698		)	(10,563		)	9,862			7,125				(2,698		)
Net cash flow provided by (used in) operating activities	133,216			(11,162		)	99,340
Related party accrued interest										220				—
Net cash flow provided by operating activities										25,213				49,298
Cash flows from investing activities
Proceeds from the sale of hotel properties, net	434,361			—			73,416			—				116,624
Improvements and additions to hotel properties	(58,209		)	(55		)	(63,802		)	(13,039		)		(18,141		)
Additions to property and equipment	(4		)	—			—			—				(3		)
Distributions from unconsolidated joint ventures in excess of earnings	—			—			840
Net cash flow provided by (used in) investing activities	376,148			(55		)	10,454
Contributions to unconsolidated joint ventures										(603		)		—
Net cash flow (used in) provided by investing activities										(13,642		)		98,480
Cash flows from financing activities
Proceeds from borrowings	—			—			66,000
Repayments of borrowings	(569,033		)	(471		)	(121,691		)	(650		)		(539,512		)
Repurchase of FelCor common shares to satisfy employee withholding requirements	—			—			(6,434		)
Contributions from partners	673,853			35,545			—			73,846				598,033
Distributions to partners	(610,132		)	(19,123		)	—			(48,308		)		(206,212		)
Distribution of FelCor TRS	—			(51,867		)	—
Distributions to preferred unitholders	—			—			(18,836		)
Distributions to common unitholders	—			—			(30,926		)
Distributions to FelCor LP limited partners	—			—			(134		)
Payments of deferred financing costs	(10		)	—					—			(2		)		(10		)
Distributions to noncontrolling interests	—			—				(150		)
Contributions from noncontrolling interests	—			—				333
Preferred distributions - consolidated joint venture	(1,113		)	(126		)		(977		)	(312		)		(366		)
Net proceeds from the issuance of preferred capital in a consolidated joint venture	—			—				647
Redemption of preferred capital - consolidated joint venture										(45,583		)		—
Contributions from joint venture partners										2,281				—
Net cash flow used in financing activities	(506,435		)	(36,042		)		(112,168		)	(18,728		)		(148,067		)
Net change in cash, cash equivalents, and restricted cash reserves	2,929			(47,259		)		(2,374		)	(7,157		)		(289		)
Cash, cash equivalents, and restricted cash reserves, beginning of period	18,031			64,434				66,808
Cash, cash equivalents, and restricted cash reserves, beginning of year										24,562				18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	20,960		$	17,175			$	64,434		$	17,405			$	17,742

The accompanying notes are an integral part of these consolidated financial statements.

Rangers Sub I, LLC and FelCor Lodging Limited Partnership

Notes to the Consolidated Financial Statements

(unaudited)

1. Organization

Rangers Sub I, LLC ("Rangers") is a Maryland limited liability company and a wholly-owned subsidiary of RLJ Lodging Trust, L.P. ("RLJ LP"). FelCor Lodging Trust Incorporated ("FelCor") merged into and with Rangers on August 31, 2017, as further described in Note 3. In the Rangers consolidated financial statements, FelCor is presented as the Predecessor and Rangers is presented as the Successor. Rangers owns an indirect 99% partnership interest in FelCor Lodging Limited Partnership ("FelCor LP"). Rangers General Partner, LLC, also a wholly-owned subsidiary of RLJ LP, owns the remaining 1% partnership interest and is the sole general partner of FelCor LP. Rangers and FelCor LP are collectively referred to as the "Company." Substantially all of the Company’s assets and liabilities are held by, and all of its operations are conducted through FelCor LP. The Company owns primarily premium-branded, upper-upscale hotels located in major markets and resort locations.

As of ~~September 30, 2018~~March 31, 2019, the Company owned 3130 hotel properties with approximately ~~9,365~~8,800 rooms, located in 13 states. The Company, through wholly-owned subsidiaries, owned a 100% interest in 2827 hotel properties, a 95% controlling interest in The Knickerbocker, and 50% interests in entities owning two hotel properties. The Company consolidates its real estate interests in the 2928 hotel properties in which it holds a controlling financial interest, and the Company records the real estate interests in the two hotels in which it holds an indirect 50% interest using the equity method of accounting. The Company leases 3029 of its 3130 hotel properties to subsidiaries of RLJ LP.

2. Summary of Significant Accounting Policies

The combined Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 of Rangers and FelCor LP contains a discussion of the Company's significant accounting policies. Other than noted below, there have been no other significant changes to the Company's significant accounting policies since December 31, ~~2017.~~2018.

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. The unaudited financial statements include all adjustments that are necessary, in the opinion of management, to fairly state the consolidated balance sheets, statements of operations and comprehensive income, ~~(loss),~~ statements of changes in equity (partners' capital) and statements of cash flows.

The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, ~~2017~~2018, included in the combined Annual Report on Form 10-K of Rangers and FelCor LP filed with the SEC on March ~~2, 2018.~~1, 2019.

The consolidated financial statements include the accounts of Rangers, FelCor LP and its wholly-owned subsidiaries, and joint ventures in which the Company has a majority voting interest and control. For the controlled subsidiaries that are not wholly-owned, the third-party ownership interest represents a noncontrolling interest, which is presented separately in the consolidated financial statements. The Company also records the real estate interests in two joint ventures in which it holds an indirect 50% interest using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income and comprehensive income, shareholders’ equity or cash flows.

Use of Estimates

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Revenue~~Leases

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board ~~("FASB"~~(the "FASB") issued Accounting Standards Update ("ASU") ~~2014-09,~~2016-02, ~~Revenue from Contracts with Customers~~Leases (Topic 842), which ~~supersedes or replaces nearly all GAAP revenue~~provides the principles for the recognition, ~~guidance. The guidance establishes~~measurement, presentation and disclosure of leases for both parties to a ~~new control-based revenue recognition model that changes the basis for deciding when revenue is recognized over time or at a point in time~~contract (i.e. lessees and expands the disclosures about revenue. The guidance also applies to sales of real estate and the new principles-based approach is largely based on the transfer of control of the real estate to the buyer.lessors). The Company adopted this standard on January 1, ~~2018~~2019 using the modified retrospective transition ~~method. Based~~approach. There are two methods of applying the modified retrospective transition approach and the Company elected to not adjust the comparative periods in the consolidated financial statements and footnotes, so the Company did not recognize a cumulative effect adjustment on the ~~Company's assessment, the adoption~~date of ~~this standard did not have an impact to the Company's consolidated financial statements.~~adoption. The comparative historical periods will be presented in accordance with ASC 840, Leases.

~~Lease Revenue~~Lessors

As a lessor in a lease contract, the Company classifies its leases as either an operating lease, direct financing lease, or a sales-type lease. The Company's hotel properties are leased through intercompany lease ~~agreements.~~contracts. The Company's hotel property-owning subsidiaries (the "Lessors") lease the hotel properties to lessees owned by FelCor TRS Holdings, LLC ("FelCor TRS"), a subsidiary of RLJ LP (the "Lessees"). The Company classifies these lease contracts as operating leases, so the Company will continue to recognize the underlying leased asset as an investment in hotel properties on the consolidated balance sheets. Base lease revenue is ~~reported as income by the Lessor~~recognized on a straight-line basis over the lease term. Percentage lease revenue is ~~reported as income by the Lessor~~recognized over the lease term when it is earned and becomes receivable from the Lessees, according to the provisions of the respective lease ~~agreements. The Lessees are in compliance with their rental obligations under their respective lease agreements.~~

For the Predecessor period, the Company’s revenue consisted of room revenue, food and beverage revenue, and revenue from other hotel operating departments (such as parking fees, golf, pool and other resort fees, gift shop sales and other guest service fees). These revenues were recorded net of any sales and occupancy taxes collected from the hotel guests. All rebates or discounts were recorded as a reduction to revenue, and there are no material contingent obligations with respect to rebates and discounts offered by the hotels. All revenues were recorded on an accrual basis as they were earned. An allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the existing accounts receivable portfolio and it was recorded as a bad debt expense. The allowance for doubtful accounts was calculated as a percentage of the aged accounts receivable. Any cash received prior to a guest's arrival was recorded as an advance deposit from the guest and recognized as revenue at the time of the guest's occupancy at the hotel property.

~~Investment in Hotel Properties~~

~~The Company’s acquisitions generally consist of land, land improvements, buildings, building improvements, furniture, fixtures and equipment ("FF&E"), and inventory.~~contracts. The Company may also acquire intangible assets or liabilities related to in-place leases, management agreements, franchise agreements and advanced bookings. The Company allocates the purchase price among the assets acquired and the liabilities assumed based on their respective fair values at the date of acquisition. The Company determines the fair value by using market data and independent appraisals available to us and making numerous estimates and assumptions. Transaction costs are expensed for acquisitions that are considered business combinations and capitalized for asset acquisitions.

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~. The guidance clarifies the definition of a business by adding guidance to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single asset or a group of similar identifiable asset(s), then the transaction is considered to be an asset acquisition (or disposition). As a result of this standard, the Company anticipates the majority of its hotel purchases will be considered asset acquisitions as opposed to business combinations, although the determination will be made on a transaction-by-transaction basis. Transaction costs associated with asset acquisitions will be capitalized rather than expensed as incurred. The Company adopted this guidance on January 1, 2018 on a prospective basis. The Company does not believe the accounting for each future acquisition (or disposal) of assets or a business will be materially different, therefore, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the estimated useful lives of 15 years for land improvements, 15 years for building improvements, 40 years for buildings and three to five years for FF&E. Maintenance and repairs are expensed and major renewals or improvements to the hotel properties are capitalized. Indirect project costs, including interest, salaries and benefits, travel and other related costs that are directly attributable to the development, are also capitalized. Upon the sale or disposition of a hotel property, the asset and related accumulated depreciation accounts are removed and the related gain or loss is included in the gain or loss on sale of hotel properties in the consolidated statements of operations and comprehensive income. A sale or disposition of a hotel

property that represents a strategic shift that has or will have a major effect on the Company's operations and financial results is presented as discontinued operations in the consolidated statements of operations and comprehensive income.

In accordance with the guidance on impairment or disposal of long-lived assets, the Company does not consider the "held for sale" classification on the consolidated balance sheet until it is probable that the sale will be completed within one year and the other requisite criteria for such classification have been met. The Company does not depreciate assets so long as they are classified as held for sale. Upon designation as held for sale and quarterly thereafter, the Company reviews the realizability of the carrying value, less costs to sell, in accordance with the guidance. Any such adjustment to the carrying value is recorded as an impairment loss.

The Company assesses the carrying value of its hotel properties whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The recoverability is measured by comparing the carrying amount to the estimated future undiscounted cash flows which take into account current market conditions and the Company’s intent with respect to holding or disposing of the hotel properties. If the Company’s analysis indicates that the carrying value is not recoverable on an undiscounted cash flow basis, the Company will recognize an impairment loss for the amount by which the carrying value exceeds the fair value. The fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions or third-party appraisals.

~~Sale of Real Estate~~

ASU 2014-09 also applies to the sale of real estate and the new principles-based approach is largely based on the transfer of control of the real estate to the buyer. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This guidance clarifies that ASC 610-20 applies to the derecognition of nonfinancial assets, including real estate, and in substance nonfinancial assets, which are defined as assets or a group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. As a result of this guidance, sales and partial sales of real estate assets will be accounted for similar to all other sales of nonfinancial and in substance nonfinancial assets. The Company adopted this guidance on January 1, 2018 using the modified retrospective transition method. Based on the Company's assessment, the adoption of this guidance did not have an impact on the Company's consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The guidance will require lessees to recognize a right-of-use asset and a lease liability for most of their leases on the balance sheet, and an entity will need to classify its leases as either an operating or finance lease in order to determine the income statement presentation. Leases with a term of 12 months or less will be accounted for similar to the existing guidance today for operating leases. Lessors will classify their leases using an approach that is substantially equivalent to the existing guidance today for operating, direct financing, or sales-type leases. Lessors may only ~~capitalize~~capitalizes the incremental direct costs of leasing, so any indirect costs of leasing will be expensed as incurred. The ~~guidance requires~~Lessees are in compliance with their rental obligations under their respective lease agreements.

Lessees

As a lessee in a lease contract, the Company recognizes a lease right-of-use asset and a lease liability on the consolidated balance sheet. The Company is a lessee in a variety of lease contracts, such as ground leases, parking leases, office leases and equipment leases. The Company classifies its leases as either an ~~entity to separate~~operating lease or a finance lease based on the principle of whether or not the lease ~~components from~~is effectively a financed purchase of the ~~non-lease components~~leased asset. For operating leases, the Company recognizes lease expense on a straight-line basis over the term of the lease. For finance leases, the Company recognizes lease expense on the effective interest method, which results in ~~a contract, with~~the interest component of each lease payment being recognized as interest expense and the lease ~~components~~right-of-use asset being ~~accounted for in accordance~~amortized into amortization expense using the straight-line method over the term of the lease. For leases with ~~ASC 842 and~~an initial term of 12 months or less, the non-lease components being accounted for in accordance with other applicable accounting guidance. The guidance is effective for annual reporting periods beginning after December 15, 2018, and the interim periods within those annual periods, with early adoption permitted. The Company will ~~adopt this new standard on January 1, 2019. The Company has~~ not ~~yet completed its analysis on this standard, but it believes the application of the new standard will result in the recording of~~recognize a lease right-of-use asset and a lease liability on the consolidated balance sheet and lease expense will be recognized on a straight-line basis over the lease term.

At the lease commencement date, the Company determines the lease term by incorporating the fixed, non-cancelable lease term plus any lease extension option terms that are reasonably certain of being exercised. The ability to extend the lease term is at the Company's sole discretion. The Company calculates the present value of the future lease payments over the lease term in order to determine the lease liability and the related lease right-of-use asset that is recognized on the consolidated balance sheet.

Certain lease contracts may include an option to purchase the leased property, which is at the Company's sole discretion. The Company's lease contracts do not contain any material residual value guarantees or material restrictive covenants.

The Company's leases include a base lease payment, which is recognized as lease expense on a straight-line basis over the lease term. In addition, certain of the Company's leases may include an additional lease payment that is based on either (i) a percentage of the respective hotel property's financial results, or (ii) the frequency to which the leased asset is used, or (iii) the lease payments are adjusted periodically for inflation; all of which are recognized as variable lease expense, when incurred, in the consolidated statements of operations and comprehensive income.

The Company will use the implicit rate in a lease contract in order to determine the present value of the future lease payments over the lease term. If the implicit rate in the lease contract is not available, then the Company will use its incremental borrowing rate at the lease commencement date. The Company determined its incremental borrowing rate for each lease contract by using the U.S. Treasury interest rates yield curve, and then making adjustments for the lease term, the Company’s credit spread, the Company’s ability to borrow on a secured basis, the quality and condition of the leased asset and the current economic environment. For purposes of adopting ASC 842, the Company used its incremental borrowing rate on January 1, 2019 for the operating leases that commenced prior to that date.

The Company elected the following practical expedients in adopting the new standard:

The Company elected the package of practical expedients that allows the Company to not reassess:


(i)	whether any expired or existing contracts meet the definition of a lease;


(ii)	the lease classification for any expired or existing leases; and


(iii)	the initial direct costs for any existing leases.

The Company elected a practical expedient to make an accounting policy election to not recognize a right-of-use asset and a lease liability for leases with an initial term of 12 months or less.

The Company elected a practical expedient to allow the Company to not reassess whether an existing land easement not previously accounted for as a lease under ASC 840 would now be considered to be a lease under ASC 842.

The Company elected the practical expedient whereby lessors, by class of underlying asset, are not required to separate the nonlease components from the lease components, if certain conditions are met.

Upon adoption of this standard on January 1, 2019, the Company recognized lease liabilities and the related lease right-of-use assets on the consolidated balance sheet for its ground leases, parking leases and ~~equipment leases, which represent~~office leases. In addition to recognizing the ~~majority~~lease liabilities and the related lease right-of-use assets on the date of adoption, the ~~Company's current operating~~Company reclassified its below market ground lease ~~payments.~~ intangible assets from intangible assets, net on the consolidated balance sheet to the lease right-of-use assets. In addition, the Company reclassified its above market ground lease liabilities and deferred rent liabilities from accounts payable and other liabilities on the consolidated balance sheet to the lease right-of-use assets.

The ~~Company does not expect~~following table summarizes the ~~adoption~~impact of adopting this ~~standard will materially affect its~~guidance on the consolidated ~~statements~~balance sheet (in thousands):



	January 1, 2019
	As Previously Reported		Impact of the Adoption of ASC 842			As Adjusted
Lease right-of-use assets	$	—	$	84,913		$	84,913
Intangible assets, net	$	46,260	$	(46,260	)	$	—
Accounts payable and other liabilities	$	43,389	$	(11,048	)	$	32,341
Lease liabilities	$	—	$	49,701		$	49,701

There was no impact to the Company’s consolidated statement of operations and comprehensive ~~income.~~income and the consolidated statement of cash flows. Refer to Note 9, Commitments and Contingencies, for the Company's disclosures about its lease contracts.

Recently Issued Accounting Pronouncements

In August 2018, the SEC issued SEC Final Rule 33-10532, Disclosure Update and Simplification. The amendments ~~simplify or eliminate duplicative, overlapping, or outdated disclosure requirements. The amendments also~~ add certain disclosure requirements, such as requiring entities to disclose the current and comparative quarter and year-to-date changes in shareholders' equity for interim periods. The amended rules are effective for reports filed on or after November 5, 2018. However, the SEC issued Compliance & Disclosure Interpretation 105.09 that allows entities to defer the adoption of the new disclosure requirement relating to changes in shareholders' equity for interim periods until the Form 10-Q for the quarterly period that begins after November 5, 2018. The Company ~~will adopt~~adopted the new disclosure requirement relating to changes in shareholders' equity for interim periods on January 1, 2019. Based on the Company's assessment, the adoption of the new disclosures ~~will~~did not have a material impact on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The guidance modifies the disclosure requirements for fair value measurements by removing or modifying some of the disclosures, while also adding new disclosures. The guidance is effective for annual reporting periods beginning after December 15, 2019, and the interim periods within those annual periods, with early adoption permitted. The Company will adopt this new standard on January 1, 2020. Based on the Company's assessment, the adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

3.~~Merger with RLJ~~

On August 31, 2017 (the "Acquisition Date"), RLJ Lodging Trust ("RLJ"), RLJ LP, Rangers, and Rangers Sub II, LP, a wholly-owned subsidiary of RLJ LP ("Partnership Merger Sub"), consummated the transactions contemplated by the definitive Agreement and Plan of Merger (the "Merger Agreement"), dated as of April 23, 2017, with FelCor and FelCor LP pursuant to which Partnership Merger Sub merged with and into FelCor LP, with FelCor LP surviving as a wholly-owned subsidiary of RLJ LP (the "Partnership Merger"), and, immediately thereafter, FelCor merged with and into Rangers, with Rangers surviving as a wholly-owned subsidiary of RLJ LP (the "REIT Merger" and, together with the Partnership Merger, the "Mergers").

~~RLJ accounted for the Mergers under the acquisition method of accounting in ASC 805,~~ ~~Business Combinations~~. In accordance with the guidance, RLJ elected to apply pushdown accounting to the Company's consolidated financial statements in order to reflect the new basis of accounting established by RLJ for the individual assets acquired and the liabilities assumed in the Mergers. Accordingly, the consolidated financial statements of the Company for the periods before and after the Acquisition Date reflect different bases of accounting, and the financial positions and the results of operations for those periods are not comparable. As a result, the consolidated financial statements and the notes to those financial statements are separated into two distinct periods; the periods prior to the Acquisition Date are identified as "Predecessor," and the periods after the Acquisition Date are identified as "Successor". The new basis of accounting for the assets and liabilities that existed on the Acquisition Date will be used in the preparation of the Company's future financial statements and footnotes.

At the closing of the Mergers, FelCor LP had controlling financial interests in the Lessors, and FelCor TRS and its property-operating subsidiaries, the Lessees. The hotel properties were leased through intercompany lease agreements between the Lessors and the Lessees, resulting in the Lessees' lease payments being eliminated in consolidation. Immediately after the consummation of the Mergers and the push down of the allocation of the purchase price consideration, FelCor LP distributed its equity interests in FelCor TRS to RLJ LP. The Company accounted for the distribution as a transaction amongst entities under common control. As a result of the distribution of the equity interests in FelCor TRS, the Lessees' lease payments pursuant to the leases are no longer eliminated in consolidation.

The following table reflects the new basis of accounting for the assets and liabilities that existed on the Acquisition Date and the impact of the distribution of the equity interests in FelCor TRS to RLJ LP:

August 31, 2017
New Basis Before
FelCor TRS Distribution
FelCor TRS
Distribution

New Basis After
FelCor TRS Distribution
Investment in hotel properties $ 2,661,114
$ (2,000 ) $ 2,659,114
Investment in unconsolidated joint ventures 25,651
(7,900 ) 17,751
Cash and cash equivalents 47,396
(40,878 ) 6,518
Restricted cash reserves 17,038
(10,989 ) 6,049
Hotel and other receivables 28,308
(28,308 ) —
Deferred income tax assets 58,170
(58,170 ) —
Intangible assets 139,673
(20,262 ) 119,411
Prepaid expenses and other assets 23,811
(11,417 ) 12,394
Debt (1,305,337 ) —
(1,305,337 )
Accounts payable and other liabilities (118,360 ) 52,995
(65,365 )
Advance deposits and deferred revenue (23,795 ) 23,795
—
Accrued interest (22,612 ) —
(22,612 )
Distributions payable (4,312 ) —
(4,312 )
Total equity $ 1,526,745
$ (103,134 ) $ 1,423,611

~~RLJ used the following valuation methodologies, inputs, and assumptions to estimate the fair value of the assets acquired, the liabilities assumed, and the equity interests acquired:~~

Investment in hotel properties — RLJ estimated the fair values of the land and improvements, buildings and improvements, and furniture, fixtures, and equipment at the hotel properties by using a combination of the market, cost, and income approaches. These valuation methodologies are based on significant Level 3 inputs in the fair value hierarchy, such as estimates of future income growth, capitalization rates, discount rates, capital expenditures, and cash flow projections at the respective hotel properties.

Investment in unconsolidated joint ventures — RLJ estimated the fair value of its real estate interests in the unconsolidated joint ventures by using the same valuation methodologies for the investment in hotel properties noted above. In addition, RLJ estimated the fair value of an unconsolidated joint venture's mortgage loan by using the same valuation methodology for the debt noted below. RLJ recognized the net assets acquired based on its respective ownership interest in the joint venture according to the joint venture agreement.

Deferred income tax assets — RLJ estimated the future realizable value of the deferred income tax assets by estimating the amount of the net operating loss that will be utilized in future periods by the acquired taxable REIT subsidiaries. RLJ then applied its applicable effective tax rate against the net operating losses to determine the appropriate deferred income tax assets to recognize. This valuation methodology is based on Level 3 inputs in the fair value hierarchy.

Intangible assets — RLJ estimated the fair value of its below market ground lease intangible assets by calculating the present value of the difference between the contractual rental amounts paid according to the in-place lease agreements and the market rental rates for similar leased space, measured over a period equal to the remaining non-cancelable term of the lease. This valuation methodology is based on Level 3 inputs in the fair value hierarchy. The below market ground lease intangible assets are amortized over the remaining terms of the respective leases as adjustments to rental expense in property tax, insurance and other in the consolidated statements of operations and comprehensive income (loss). The Company estimated the fair value of the advanced bookings intangible assets by using the income approach to determine the projected cash flows that a hotel property will receive as a result of future hotel room and guest events that have already been reserved and pre-booked at the hotel property as of the Acquisition Date. This valuation methodology is based on Level 3 inputs in the fair value hierarchy. The advanced bookings intangible asset is amortized over the duration of the hotel room and guest event reservations period at the hotel property to depreciation and amortization in the consolidated statements of operations and comprehensive income (loss). The Company recognized the following intangible assets in the Mergers (dollars in thousands):

Weighted Average Amortization Period
(in Years)
Below market ground leases $ 118,050
54
Advanced bookings 13,862
1
Other intangible assets 7,761
6
Total intangible assets $ 139,673
46

Above market ground lease liabilities — RLJ estimated the fair value of its above market ground lease liabilities by calculating the present value of the difference between the contractual rental amounts paid according to the in-place lease agreements and the market rental rates for similar leased space, measured over a period equal to the remaining non-cancelable term of the lease. This valuation methodology is based on Level 3 inputs in the fair value hierarchy. The Company recognized approximately $15.5 million of above market ground lease liabilities in the Mergers, which are included in accounts payable and other liabilities in the accompanying consolidated balance sheet. The above market ground lease liabilities are amortized over the remaining terms of the respective leases as adjustments to rental expense in property tax, insurance and other in the consolidated statements of operations and comprehensive income (loss).

Debt — RLJ estimated the fair value of the Senior Notes (as defined in Note 7) by using publicly available trading prices, market interest rates, and spreads for the Senior Notes, which are Level 3 inputs in the fair value hierarchy. RLJ estimated the fair value of the mortgage loans using a discounted cash flow model and incorporated various inputs and assumptions for the effective borrowing rates for debt with similar terms and the loan to estimated fair value of the collateral, which are Level 3 inputs in the fair value hierarchy. The Company recognized approximately

$71.7 million in above market debt fair value adjustments on the Senior Notes and the mortgage loans assumed in the Mergers, which is included in debt, net in the accompanying consolidated balance sheet. The above market debt fair value adjustments are amortized over the remaining terms of the respective debt instruments as adjustments to interest expense in the consolidated statements of operations and comprehensive income (loss).

Noncontrolling interest in consolidated joint ventures — RLJ estimated the fair value of the consolidated joint ventures by using the same valuation methodologies for the investment in hotel properties noted above. RLJ then recognized the fair value of the noncontrolling interest in the consolidated joint ventures based on the joint venture partner's ownership interest in the consolidated joint venture. This valuation methodology is based on Level 3 inputs and assumptions in the fair value hierarchy.

Preferred equity in a consolidated joint venture — RLJ estimated the fair value of the preferred equity in a consolidated joint venture by comparing the contractual terms of the preferred equity agreement to market-based terms of a similar preferred equity agreement, which is based on Level 3 inputs in the fair value hierarchy.

Restricted cash reserves, hotel and other receivables, prepaid expenses and other assets, accounts payable and other liabilities, advance deposits and deferred revenue, accrued interest, and distributions payable — The carrying amounts of the assets acquired, the liabilities assumed, and the equity interests acquired approximate fair value because of their short term maturities.

For the three and nine months ended September 30, 2018, the Company recognized approximately $0.2 million and $1.9 million of integration costs, respectively. The Company recognized approximately $1.0 million of integration costs during the Successor period of September 1, 2017 through September 30, 2017. The Company recognized approximately $61.9 million and $68.2 million of transaction costs during the Predecessor period of July 1, 2017 through August 31, 2017 and the Predecessor period of January 1, 2017 through August 31, 2017, respectively. The transaction costs primarily related to financial advisory, legal, accounting, severance, other professional service fees, and other transaction-related costs in connection with the Mergers. The integration costs primarily related to professional fees and employee-related costs, including compensation for transition employees. The merger-related transaction and integration costs noted above were expensed to transaction costs in the consolidated statements of operations and comprehensive income (loss).

4. Investment in Hotel Properties

Investment in hotel properties consisted of the following (in thousands):


	September 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Land and improvements	$	531,850		$	597,451		$	532,832		$	532,490
Buildings and improvements	1,545,752			1,801,302			1,562,430			1,555,132
Furniture, fixtures and equipment	116,378			126,590			127,312			125,207
	2,193,980			2,525,343			2,222,574			2,212,829
Accumulated depreciation	(71,526		)	(27,463		)	(107,586		)	(89,406		)
Investment in hotel properties, net	$	2,122,454		$	2,497,880		$	2,114,988		$	2,123,423

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2019 and 2018, the Company recognized depreciation expense related to its investment in hotel properties of approximately ~~$19.2~~$18.2 million and ~~$60.0~~$20.5 million, respectively. For the Successor period of September 1, 2017 through September 30, 2017, the Company recognized depreciation expense related to its investment in hotel properties of approximately $5.9 million. For the Predecessor period of July 1, 2017 through August 31, 2017, the Company recognized depreciation expense related to its investment in hotel properties of approximately $17.6 million. For the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized depreciation expense related to its investment in hotel properties of approximately $72.7 million.

~~Impairment~~

~~The Company determined that there was~~ no ~~impairment of any assets for the nine months ended September 30, 2018 or for the Successor period of September 1, 2017 through September 30, 2017.~~

per room basis from transactions involving hotel properties in similar locations (a Level 2 input in the fair value hierarchy). In June 2017, two hotel properties, including the hotel property that was previously impaired in March 2017, were classified as held for sale on the consolidated balance sheet. The basis for these hotel properties had previously been written down to the respective fair values of the hotel properties based on both third-party offers to purchase the hotel properties and observable market data on a price per room basis from transactions involving hotel properties in similar locations (a Level 2 input in the fair value hierarchy). The Company recorded an additional impairment loss of $10.3 million on these two hotel properties in order to reflect the contractual sale prices, less the estimated costs to sell.

~~Held for Sale~~

In July 2018, the Company entered into a purchase and sale agreement to sell the Holiday Inn San Francisco - Fisherman's Wharf. At September 30, 2018, this hotel property has been included in assets of hotel properties held for sale, net in the accompanying consolidated balance sheet. The transaction closed on October 15, 2018.

~~The following table is a summary of the major classes of assets held for sale (in thousands):~~

September 30, 2018
Land and improvements $ 12,203
Buildings and improvements 10,900
Furniture, fixtures and equipment 2,074
Total assets of hotel properties held for sale, net $ 25,177

5.4. Investment in Unconsolidated Joint Ventures

As of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, the Company owned 50% interests in joint ventures that owned two hotel properties. The Company accounts for the investments in these unconsolidated joint ventures under the equity method of accounting. The Company makes adjustments to the equity in income ~~(loss)~~ from unconsolidated joint ventures related to the difference between the Company's basis in the investment in the unconsolidated joint ventures as compared to the historical basis of the assets and liabilities of the joint ventures. As of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, the unconsolidated entities' debt consisted entirely of non-recourse mortgage debt.

The following table summarizes the components of the Company's investments in unconsolidated joint ventures (in thousands):


	September 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Equity basis of the joint venture investments	$	(4,998	)	$	(4,733	)	$	(4,370	)	$	(4,810	)
Cost of the joint venture investments in excess of the joint venture book value	20,805			21,645			20,246			20,526
Investment in unconsolidated joint ventures	$	15,807		$	16,912		$	15,876		$	15,716

The following table summarizes the components of the Company's equity in income from unconsolidated joint ventures (in thousands):


	Successor							Predecessor			Successor						Predecessor
	For the three months ended September 30,			September 1 through September 30,			July 1 through August 31,			For the nine months ended September 30,			September 1 through September 30,			January 1 through August 31,			For the three months ended March 31,
	2018			2017			2017			2018			2017			2017			2019			2018
Unconsolidated joint ventures net income attributable to the Company	$	498		$	208		$	621		$	1,784		$	208		$	1,332		$	387		$	396
Depreciation of cost in excess of book value	(280		)	(93		)	(65		)	(839		)	(93		)	(258		)	(280		)	(280		)
Equity in income from unconsolidated joint ventures	$	218		$	115		$	556		$	945		$	115		$	1,074		$	107		$	116

6.5. Sale of Hotel Properties

During the ~~nine~~three months ended ~~September 30,~~March 31, 2019, the Company did not sell any hotel properties.

During the three months ended March 31, 2018, the Company sold ~~five~~two hotel properties for a total sale price of approximately ~~$441.2~~$119.2 million. In connection with these transactions, the Company recorded an aggregate ~~$14.8~~$9.4 million ~~net gain~~loss on ~~sales,~~sale, which is included in ~~gain (loss)~~loss on sale of hotel properties, net in the accompanying consolidated statement of operations and comprehensive ~~income (loss).~~income. The ~~gain~~loss on sale ~~is net of~~included approximately ~~$9.8~~$1.5 million in lease termination fees as a result of early terminating the TRS Leases with the lessees at these hotel properties.

The following table discloses the hotel properties that were sold during the ~~nine~~three months ended ~~September 30,~~March 31, 2018:



Hotel Property Name	Location	Sale Date	Rooms
Embassy Suites Boston Marlborough	Marlborough, MA	February 21, 2018	229
Sheraton Philadelphia Society Hill Hotel	Philadelphia, PA	March 27, 2018	364
~~Embassy Suites Napa Valley~~	~~Napa, CA~~	~~July 13, 2018~~	~~205~~
~~The Vinoy Renaissance St. Petersburg Resort & Golf Club~~	~~St. Petersburg, FL~~	~~August 28, 2018~~	~~362~~
~~DoubleTree by Hilton Burlington Vermont~~	~~Burlington, VT~~	~~September 27, 2018~~	~~309~~
		Total	~~1,469~~

On October 15, 2018, the Company sold the Holiday Inn San Francisco - Fisherman's Wharf for $75.3 million. In connection with the sale, the Company transferred its purchase option on the land underlying the ground lease to the buyer. The proceeds to the Company as a result of the sale was approximately $30.4 million.

During the Predecessor period of January 1, 2017 through August 31, 2017, the Company sold two hotel properties in two separate transactions for a total sale price of approximately $92.0 million. In connection with these transactions, the Company recorded a $1.6 million loss on sale, which is included in loss on sale of hotel properties, net in the accompanying consolidated statement of operations and comprehensive income (loss).

~~The following table discloses the hotel properties that were sold during the nine months ended September 30, 2017:~~



~~Hotel Property Name~~	~~Location~~	~~Sale Date~~	~~Rooms~~
~~Morgans New York~~	~~New York, NY~~	~~July 17, 2017~~	~~117~~
~~Royalton New York~~	~~New York, NY~~	~~August 1, 2017~~	~~168~~
		~~Total~~	~~285~~593

7.6. Debt

The Company's debt consisted of the following (in thousands):

Outstanding Borrowings at
Number of Assets Encumbered Interest Rate Maturity Date September 30, 2018 December 31, 2017
Senior secured notes (1)(2)(3) 9 5.63% — $ —
$ 552,669
Senior unsecured notes (1)(2)(4) — 6.00% June 2025 506,503
510,047
PNC Bank/Wells Fargo (5) 3 4.95% October 2022 92,322
120,893
Prudential (6) 1 4.94% October 2022 29,758
30,323
Scotiabank (1) (7) 1 LIBOR + 3.00% November 2018 (8) 85,073
85,404
14 713,656
1,299,336
Deferred financing costs, net (24 ) (231 )
Debt, net $ 713,632
$ 1,299,105



				Outstanding Borrowings at
	Number of Assets Encumbered	Interest Rate	Maturity Date	March 31, 2019			December 31, 2018
Senior unsecured notes (1)(2)(3)	—	6.00%	June 2025	$	504,141		$	505,322
Mortgage loan (4)	3	4.95%	October 2022	91,121			91,737
Mortgage loan (5)	1	4.94%	October 2022	29,371			29,569
	4			624,633			626,628
Deferred financing costs, net				(2		)	—
Debt, net				$	624,631		$	626,628


(1)	Requires payments of interest only through maturity.


(2)	The senior ~~secured notes include $28.7 million at December 31, 2017, and the senior~~ unsecured notes include ~~$31.5~~$29.1 million and ~~$35.1~~$30.3 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, related to fair value adjustments that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.

(3)

On March 9, 2018, the Company completed the early redemption of the senior secured notes in full for an aggregate amount of approximately $539.0 million, which included the redemption price of 102.813% for the outstanding principal amount. The Company recognized a gain of approximately $12.9 million on the early redemption, which is included in gain (loss) on extinguishment of indebtedness, net in the accompanying consolidated statements of operations and comprehensive income (loss).


~~(4)~~	The Company has the option to redeem the senior unsecured notes beginning June 1, 2020 at a ~~premium~~price of 103.0%. of face value.


~~(5)~~(4)	Includes ~~$2.0~~$1.7 million and ~~$3.0~~$1.9 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, related to fair value adjustments on the mortgage loans that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


~~(6)~~(5)	Includes $0.6 million and ~~$0.7~~$0.6 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, related to a fair value adjustment on the mortgage loan that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


~~(7)~~	Includes $0.1 million and $0.4 million at September 30, 2018 and December 31, 2017, respectively, related to a fair value adjustment on the mortgage loan that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


~~(8)~~	On November 5, 2018, RLJ LP paid off the Scotiabank mortgage loan in full. In connection with the mortgage loan payoff, the Company's consolidated joint venture entered into an $85.0 million related party loan with RLJ LP at an interest rate of LIBOR + 3.00% that has a maturity date of November 9, 2023.

The senior unsecured notes ~~and the senior secured notes (collectively, the~~(the "Senior Notes"), and certain mortgage agreements are subject to customary financial covenants. As of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018, the Company was in compliance with all financial covenants.

~~Interest Expense~~During the three months ended March 31, 2019 and 2018, the Company recognized $7.2 million and $13.1 million of interest expense, respectively.

7.Related Party Debt

In November 2018, the Company's consolidated joint venture entered into an $85.0 million related party mortgage loan with RLJ LP, which is included in related party debt in the accompanying consolidated balance sheets. The related party mortgage loan has an interest rate of LIBOR + 3.00% and a maturity date of November 9, 2023. The related party mortgage loan requires payments of interest only through maturity. The hotel property owned by the Company's consolidated joint venture is encumbered by the related party mortgage loan.

During the three ~~and nine~~ months ended ~~September 30, 2018,~~March 31, 2019, the Company recognized ~~$8.5 million and $30.2~~$1.2 million of interest expense ~~respectively.~~related to its related party loan with RLJ LP.

During the Successor period of September 1, 2017 through September 30, 2017, the Company recognized $4.8 million of interest expense. During the Predecessor period of July 1, 2017 through August 31, 2017, the Company recognized $12.9 million of interest expense, which is net of capitalized interest of $0.3 million.

~~During the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized $51.7 million of interest expense, which is net of capitalized interest of $1.1 million.~~

8. Fair Value

Fair Value Measurement

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The fair value hierarchy has three levels of inputs, both observable and unobservable:

Level 1 — Inputs include quoted market prices in an active market for identical assets or liabilities.

Level 2 — Inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data.

Level 3 — Inputs are unobservable and corroborated by little or no market data.

Fair Value of Financial Instruments

The Company used the following market assumptions and/or estimation methods:

Cash and cash equivalents, restricted cash reserves, hotel and other receivables, accounts payable and other liabilities — The carrying amounts reported in the consolidated balance sheets for these financial instruments approximate fair value because of their short term maturities.

Debt — The Senior Notes had an estimated fair value of approximately $1.0 billion at December 31, 2017. On March 9, 2018, the Company completed the early redemption of the senior secured notes in full for an aggregate amount of approximately $539.0 million. The senior unsecured notes had an estimated fair value of approximately ~~$504.0~~$493.2 million and $492.6 million at ~~September 30, 2018.~~March 31, 2019 and December 31, 2018, respectively. The Company estimated the fair value of the Senior Notes by using publicly available trading prices, market interest rates, and spreads for the Senior Notes, which are Level 2 and Level 3 inputs in the fair value hierarchy. The mortgage loans had an estimated fair value of approximately ~~$205.7~~$122.5 million and ~~$236.2~~$121.1 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. The Company estimated the fair value of the mortgage loans by using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms and the loan to estimated fair value of the collateral, which are Level 3 inputs in the fair value hierarchy. The total estimated fair value of the Company's debt was ~~$709.7~~$615.7 million and ~~$1.3 billion~~$613.7 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. The total carrying value of the Company's debt was ~~$713.6~~$624.6 million and ~~$1.3 billion~~$626.6 million at ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively.

Related Party Debt — The Company's related party mortgage loan with RLJ LP had an estimated fair value of approximately $90.0 million and $84.1 million at March 31, 2019 and December 31, 2018, respectively. The Company estimated the fair value of the mortgage loan by using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms and the loan to estimated fair value of the collateral, which are Level 3 inputs in the fair value hierarchy. The total carrying value of the Company's related party debt was $85.0 million at both March 31, 2019 and December 31, 2018.

9. Commitments and Contingencies

Leases

Lessors

As a lessor, the Company will receive lease revenue from the Lessees under its lease contracts. The lease contracts contain a specific base rent amount or a percentage rent amount, which is calculated based on a percentage of room revenues, food and beverage revenues, and other revenues at the hotel properties. The lease contracts will expire in 2019 (22 hotels), 2022 (five hotels), and thereafter (one hotel).

The lease revenue recognized during the three months ended March 31, 2019 consisted of the following:



Lease revenue relating to lease payments	$	14,653
Lease revenue relating to variable lease payments	35,268
Total related party lease revenue	$	49,921

The future lease payments to the Company under the noncancelable operating leases were as follows (in thousands):



	March 31, 2019		December 31, 2018
2019	$	44,160	$	58,880
2020 (1)	—		—
2021 (1)	—		—
2022 (1)	—		—
2023 (1)	—		—
Thereafter (1)	—		—
Total	$	44,160	$	58,880


(1)	In 2020, the lease terms for the in-place lease agreements will be reset to market-based rental terms. At that time, the future lease payments to the Company under the noncancelable operating leases will be determined.

Lessees

As a lessee, as of March 31, 2019, six of the Company's hotel properties were subject to ground leases that cover the land underlying the respective hotels. The ground leases are classified as operating leases. During the three months ended March 31, 2019, the total ground lease expense was $2.5 million, which consisted of $1.7 million of fixed lease expense and $0.8 million of variable lease expense. The ground lease expense is included in property tax, insurance and other in the accompanying consolidated statements of operations and comprehensive income.

The DoubleTree Suites by Hilton Orlando Lake Buena Vista is subject to a ground lease with an initial term expiring in 2032. After the initial term, the Company may extend the ground lease for an additional term of 25 years to 2057. The ground lease expense was $0.2 million for the three months ended March 31, 2019.

The Embassy Suites San Francisco Airport Waterfront is subject to a ground lease with a term expiring in 2059. The ground lease expense was $0.6 million for the three months ended March 31, 2019.

The Wyndham Boston Beacon Hill is subject to a ground lease with a term expiring in 2028. The ground lease expense was $0.2 million for the three months ended March 31, 2019.

The Wyndham New Orleans French Quarter is subject to a ground lease with a term expiring in 2065. The ground lease expense was $0.1 million for the three months ended March 31, 2019.

The Wyndham Pittsburgh University Center is subject to a ground lease with an initial term expiring in 2038. After the initial term, the Company may extend the ground lease for up to five additional nine-year renewal terms to 2083. The ground lease expense was $0.2 million for the three months ended March 31, 2019.

The Wyndham San Diego Bayside is subject to a ground lease with a term expiring in 2029. The ground lease expense was $1.2 million for three months ended March 31, 2019.

One of the Company's hotel properties is subject to a long-term contract to lease parking spaces. The parking lease is classified as an operating lease. The total parking lease expense was de minimis for the three months ended March 31, 2019.

The Company is subject to an office lease in Dallas, Texas with a term expiring in 2027. The office lease is classified as an operating lease. The total office lease expense was $0.1 million for the three months ended March 31, 2019, which is included in general and administrative in the accompanying consolidated statements of operations and comprehensive income.

The future lease payments for the Company's operating leases were as follows (in thousands):



	March 31, 2019		December 31, 2018
2019	$	3,648	$	4,863
2020	4,884		4,884
2021	4,909		4,909
2022	4,968		4,968
2023	4,990		4,990
Thereafter	119,019		119,019
Total future lease payments	142,418		$	143,633
Less: Imputed interest	93,082
Lease liabilities	$	49,336

The following table presents certain information related to the Company's operating leases as of March 31, 2019:



Weighted average remaining lease term	32 years
Weighted average discount rate (1)	6.85	%


(1)	Upon adoption of the new lease accounting standard, the discount rates used for the Company's operating leases were determined at January 1, 2019.

Restricted Cash Reserves

The Company is obligated to maintain cash reserve funds for future capital expenditures at the hotels (including the periodic replacement or refurbishment of furniture, fixtures and equipment ("FF~~&E)~~&E")) as determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents. The management agreements, franchise agreements and/or mortgage loan documents require the Company to reserve cash ranging typically from 4.0% to 5.0% of the individual hotel’s revenues and maintain the reserves in restricted cash reserve escrows. Any unexpended amounts will remain the property of the Company upon termination of the management agreements, franchise agreements or mortgage loan documents. As of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018, approximately ~~$5.2~~$4.1 million and ~~$3.3~~$3.2 million, respectively, was available in the restricted cash reserves for future capital expenditures, real estate taxes and insurance.

~~Minimum Lease Payments~~

In the future, the Company will receive rental income from the Lessees under its lease agreements. The lease agreements contain a specific base rent amount or a percentage rent amount, which is calculated based on a percentage of room revenues, food and beverage revenues, and other revenues at the hotel properties. The lease agreements will expire in 2018 (one hotel), 2019 (22 hotels), 2022 (five hotels), and thereafter (one hotel).

~~As of September 30, 2018, the future minimum lease payments to the Company under the noncancelable operating leases were as follows (in thousands):~~

2018 $ 15,712
2019 58,880
2020 (1) —
2021 (1) —
2022 (1) —
Thereafter (1) —
Total $ 74,592


~~(1)~~	In 2020, the lease terms for the in-place lease agreements will be reset to market-based rental terms. At that time, the future minimum lease payments to the Company under the noncancelable operating leases will be determined.

Litigation

Other than the legal proceeding mentioned below, neither the Company nor any of its subsidiaries is currently involved in any regulatory or legal proceedings that management believes will have a material and adverse effect on the Company's financial position, results of operations or cash flows.

Prior to the Mergers, on March 24, 2016, an affiliate of InterContinental Hotels Group PLC ("IHG"), which was previously the hotel management company for three of the Company’s hotels (two of which were sold in 2006, and one of which was converted by the Company into a Wyndham brand and operation in 2013), notified the Company that the National Retirement Fund in which the employees at those hotels had participated had assessed a withdrawal liability of $8.3 million, with required

quarterly payments including interest, in connection with the termination of IHG’s operation of those hotels. The Company’s hotel management agreements with IHG stated that it may be obligated to indemnify and hold IHG harmless for some or all of any amount ultimately contributed to the pension trust fund with respect to those hotels.

Based on the current assessment of the claim, the resolution of this matter may not occur until 2022. As of September 30, 2018, the Company maintained an accrual of approximately $4.6 million for the future quarterly payments to the pension trust fund, which is included in accounts payable and other liabilities in the accompanying consolidated balance sheet.

The Company plans to vigorously defend the underlying claims and, if appropriate, IHG’s demand for indemnification.

~~Management Agreements~~

As discussed in Note 3, Merger with RLJ, the Company distributed its equity interests in FelCor TRS to RLJ LP immediately after consummation of the Mergers. As a result of the distribution of its equity interests in FelCor TRS, the Company's consolidated financial statements do not include the financial information related to the Lessees' management agreements.

During the Predecessor comparative period, the Company's hotel properties were operated pursuant to long-term management agreements with initial terms ranging from 5 to 20 years. Certain hotel properties also received the benefits of a franchise agreement pursuant to management agreements with Hilton, Wyndham, Marriott and other hotel brands. The management agreements, including those that include the benefits of a franchise agreement, have a base management fee generally between 2.0% and 5.0% of hotel revenues. The management companies are also eligible to receive an incentive management fee if hotel operating income, as defined in the management agreements, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel. Management fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income (loss). For the Predecessor period of July 1, 2017 through August 31, 2017, the Company recognized management fee expense of approximately $4.4 million. For the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized management fee expense of approximately $19.1 million.

The Wyndham management agreements guarantee minimum levels of annual net operating income at each of the Wyndham-managed hotels for each year of the initial 10-year term to 2023, subject to an aggregate $100 million limit over the term and an annual $21.5 million limit. For the Predecessor period of July 1, 2017 through August 31, 2017, the Company recorded $1.4 million for the pro-rata portion of the projected aggregate full-year guaranties. For the Predecessor period of January 1, 2017 through August 31, 2017, the Company recorded $3.8 million for the pro-rata portion of the projected aggregate full-year guaranties. The Company recognized these amounts as a reduction of Wyndham's contractual management and other fees.

~~Franchise Agreements~~

During the Predecessor comparative periods, certain of the Company’s hotel properties were operated under franchise agreements with initial terms of 15 years. These franchise agreements exclude certain hotel properties that received the benefits of a franchise agreement pursuant to management agreements with Hilton, Wyndham, Marriott and other hotel brands. In addition, The Knickerbocker is not operated with a hotel brand so the hotel did not have a franchise agreement. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee, generally 5.5% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs of 4.0% of room revenue. Franchise fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income. For the Predecessor period of July 1, 2017 through August 31, 2017, the Company recognized franchise fee expense of approximately $0.2 million. For the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized franchise fee expense of approximately $0.8 million.

10. Equity

~~Successor Period~~

Rangers Ownership Interests/FelCor LP Partnership Interests

As of ~~September 30, 2018,~~March 31, 2019, RLJ LP owned 100% of the ownership interests and was the sole managing member of Rangers. In addition, Rangers owned, through indirect interests, 99.0% of the partnership interests in FelCor LP. Rangers consolidates FelCor LP for financial reporting purposes as a result of its controlling financial interest. Rangers General Partner, LLC's 1.0% partnership interest in FelCor LP is recognized as a noncontrolling interest in FelCor LP on the consolidated balance sheets of Rangers.

Noncontrolling Interest in Consolidated Joint Ventures

The Company consolidates the joint venture that owns The Knickerbocker hotel property, which has a third-party partner that owns a noncontrolling 5% ownership interest in the joint venture. The third-party ownership interest is included in the noncontrolling interest in consolidated joint ventures on the consolidated balance sheets.

Consolidated Joint Venture Preferred Equity

The Company's joint venture that redeveloped The Knickerbocker raised $45.0 million ($44.4 million net of issuance costs) through the sale of redeemable preferred equity under the EB-5 Immigrant Investor Program. The purchasers ~~receive~~received a 3.25% ~~current~~ annual return, ~~(which increases to 8% if the Company does not redeem the equity interest before the fifth anniversary of the respective equity issuance),~~ plus a 0.25% non-compounding annual return ~~payable at~~that was paid upon redemption. ~~The fifth anniversary for the majority of the equity issuance is in February 2019.~~ The preferred equity raised by the joint venture is included in preferred equity in a consolidated joint venture on the consolidated balance sheets.

~~Predecessor Period~~

~~Common Stock~~

In 2015, FelCor's Board of Directors authorized a share repurchase program to acquire up to $100.0 million of FelCor's shares of common stock, par value $0.01 per share (the "Common Stock"), through October 31, 2017. During the Predecessor period of January 1, 2017 through August 31, 2017, FelCor did not repurchase and retire any of its shares of Common Stock.

Upon completion of the REIT Merger, on August 31, 2017, each issued and outstanding share of Common Stock was converted into the right to receive 0.362 common shares of RLJ. Accordingly, for the Successor period, FelCor no longer has any issued, outstanding, or authorized shares of Common Stock.

~~During the Predecessor period of January 1, 2017 through August 31, 2017,~~ On February 15, 2019, the Company ~~declared a cash dividend (distribution) of $0.06 per share of Common Stock (unit)~~redeemed the preferred equity in ~~each of the first and second quarters of 2017 and a cash dividend (distribution) of $0.04 per share of Common Stock (unit) for the Predecessor period of July 1, 2017 through August 31, 2017.~~

~~Preferred Stock/Units~~

FelCor's Board of Directors authorized the issuance of up to 20 million shares of preferred stock in one or more series. FelCor's $1.95 Series A cumulative convertible preferred stock, par value $0.01 per share (the "Series A Preferred Stock") (units), had an annual cumulative dividend (distribution) that was payable in arrears equal to the greater of $1.95 per share (unit) or the cash distributions declared or paid for the corresponding period on the number of shares of Common Stock (units) into which the Series A Preferred Stock (units) is then convertible. Each share of Series A Preferred Stock (unit) was convertible at the holder's option to 0.7752 shares of Common Stock (units), subject to certain adjustments.

Upon completion of the REIT Merger, each issued and outstanding share of Series A Preferred Stock was converted into the right to receive one $1.95 Series A Cumulative Convertible Preferred Share, par value $0.01 per share, of RLJ. Accordingly, for the Successor period, FelCor no longer has any issued, outstanding, or authorized shares of Series A Preferred Stock.

During the Predecessor period of January 1, 2017 through August 31, 2017, the Company declared a cash dividend (distribution) of $0.4875 on each share of Series A Preferred Stock (unit) in each of the first and second quarters of 2017 and a cash dividend (distribution) of $0.325 on each share of Series A Preferred Stock (unit) for the Predecessor period of July 1, 2017 through August 31, 2017.full.

11.~~Redeemable Noncontrolling Interests/Units in FelCor LP~~

In the Predecessor period, FelCor recorded the redeemable noncontrolling interests in FelCor LP, and FelCor LP recorded the redeemable units, in the mezzanine section (between liabilities and equity/partners' capital) of the consolidated balance sheets because of the redemption feature of the units. The redeemable noncontrolling interests/redeemable units held by the limited partners were redeemable for shares of Common Stock, or at the option of FelCor, for cash. Additionally, FelCor's consolidated statements of operations and comprehensive income (loss) separately present earnings attributable to the redeemable noncontrolling interests. FelCor adjusted the redeemable noncontrolling interests in FelCor LP (or redeemable units) each reporting period to reflect the greater of the carrying value based on the accumulation of historical costs or the redemption value. FelCor based the historical cost on the proportionate relationship between the carrying value of the equity associated with FelCor's common stockholders relative to that of FelCor LP's unitholders. FelCor based the redemption value on the closing price of the Common Stock at the end of the reporting period. FelCor allocated the net income (loss) to FelCor LP's noncontrolling limited partners based on their weighted average ownership percentage during the period.

~~The following table summarizes the changes in the redeemable noncontrolling interests (or redeemable units) (in thousands):~~

Predecessor

January 1
through
August 31
2017
Balance at beginning of the period $ 4,888
Redemption value allocation 196
Distributions paid to unitholders (134 )
Net loss (495 )
Balance at end of the period $ 4,455

Upon completion of the Partnership Merger, each outstanding FelCor LP Common Unit was converted into 0.362 common units of limited partnership interest in RLJ LP, unless the respective limited partner of FelCor LP elected to redeem his or her FelCor LP Common Units and receive 0.362 common shares of RLJ. Accordingly, for the Successor period, the Company no longer recognizes a redeemable noncontrolling interest (or redeemable units) in FelCor LP on the consolidated balance sheets.

~~12.Loss per Common Share/Unit~~

~~Successor Period~~

~~For the Successor period, RLJ LP, through direct and indirect wholly-owned subsidiaries, owns 100% of the ownership interests and is the sole member and partner of Rangers and FelCor LP, respectively.~~

~~Predecessor Period~~

Basic earnings (loss) per common share/unit is calculated by dividing net income (loss) attributable to common shareholders (unitholders) by the weighted-average number of common shares (units) outstanding during the period excluding the weighted-average number of unvested restricted shares (units) outstanding during the period. Diluted earnings per common share/unit is calculated by dividing net income attributable to common shareholders (unitholders) by the weighted-average number of common shares (units) outstanding during the period, plus any shares (units) that could potentially be outstanding during the period. The potential shares (units) consist of the unvested restricted share (unit) grants and unvested performance units, calculated using the treasury stock method. Any anti-dilutive shares (units) have been excluded from the diluted earnings (loss) per share (unit) calculation.

Unvested share-based payment awards that contain non-forfeitable rights to dividends (distributions) or dividend (distribution) equivalents (whether paid or unpaid) are participating shares (units) and are considered in the computation of earnings (loss) per share (unit) pursuant to the two-class method. If there were any undistributed earnings allocable to the participating shares (units), they would be deducted from net income (loss) attributable to common shareholders (unitholders) used in the basic and diluted earnings (loss) per share (unit) calculations.

The limited partners’ outstanding limited partnership units in FelCor LP (which may be redeemed for common shares of beneficial interest under certain circumstances) have been excluded from the diluted earnings (loss) per share (unit) calculation

~~as there was no effect on the per share (unit) amounts, since the limited partners’ share of income would also be added back to net income (loss) attributable to common shareholders.~~

~~The computation of basic and diluted earnings (loss) per common share (unit) is as follows (in thousands, except share/unit and per share/unit data):~~

~~Rangers Loss Per Common Share~~

Predecessor

July 1
through
August 31,

January 1
through
August 31,
2017 2017
Numerator:
Net loss attributable to Rangers $ (59,175 ) $ (96,845 )
Discontinued operations attributable to Rangers 3,400
3,400
Loss from continuing operations attributable to Rangers (55,775 ) (93,445 )
Less: Preferred dividends (4,186 ) (16,744 )
Less: Dividends paid on unvested restricted stock —
(73 )
Numerator for the loss from continuing operations attributable to Rangers common stockholders (59,961 ) (110,262 )
Numerator for the discontinued operations attributable to Rangers common stockholders (3,400 ) (3,400 )
Numerator for the loss attributable to Rangers common stockholders excluding amounts attributable to unvested restricted stock $ (63,361 ) $ (113,662 )

Denominator:
Weighted-average number of common shares - basic 137,904,668
137,331,743
Weighted-average number of common shares - diluted 137,904,668
137,331,743

Basic and diluted loss per share:
Loss from continuing operations $ (0.43 ) $ (0.80 )
Discontinued operations $ (0.02 ) $ (0.02 )
Net loss $ (0.46 ) $ (0.83 )

~~FelCor LP Loss Per Common Unit~~

Predecessor

July 1
through
August 31,

January 1
through
August 31,
2017 2017
Numerator:
Net loss attributable to FelCor LP $ (59,449 ) $ (97,340 )
Discontinued operations attributable to FelCor LP 3,415
3,415
Loss from continuing operations attributable to FelCor LP (56,034 ) (93,925 )
Less: Preferred distributions (4,186 ) (16,744 )
Less: Distributions paid on FelCor unvested restricted stock —
(73 )
Numerator for the loss from continuing operations attributable to FelCor LP common unitholders (60,220 ) (110,742 )
Numerator for the discontinued operations attributable to FelCor LP common unitholders (3,415 ) (3,415 )
Numerator for the net loss attributable to FelCor LP common unitholders excluding amounts attributable to FelCor unvested restricted stock $ (63,635 ) $ (114,157 )

Denominator:
Weighted-average number of common units - basic 138,514,851
137,941,926
Weighted-average number of common units - diluted 138,514,851
137,941,926

Basic and diluted loss per unit:
Loss from continuing operations $ (0.43 ) $ (0.80 )
Discontinued operations $ (0.02 ) $ (0.02 )
Net loss $ (0.46 ) $ (0.83 )

~~13.~~ Supplemental Information to the Statements of Cash Flows

The following supplemental information to the Statements of Cash Flows is for both Rangers and FelCor LP (in thousands):


	Successor						Predecessor
	For the nine months ended September 30,			September 1 through September 30,		January 1 through August 31,			For the three months ended March 31,
	2018			2017		2017			2019			2018
Reconciliation of cash, cash equivalents, and restricted cash reserves
Cash and cash equivalents	$	15,735		$	10,503	$	47,396		$	13,294		$	13,025
Restricted cash reserves	5,225			6,672		17,038			4,111			4,717
Cash, cash equivalents, and restricted cash reserves	$	20,960		$	17,175	$	64,434		$	17,405		$	17,742

Interest paid, net of capitalized interest	$	38,069		$	16,301	$	38,677
Interest paid									$	1,468		$	18,188
Interest paid to a related party									$	766		$	—

Income taxes (refund) paid	$	(1,742	)	$	19	$	1,346
Income taxes refunded									$	—		$	(169	)

Operating cash flow lease payments for operating leases									$	1,866

Supplemental investing and financing transactions
In conjunction with the sale of hotel properties, the Company recorded the following:
Sale of hotel properties	$	441,200		$	—	$	92,000		$	—		$	119,200
Transaction costs	(7,034		)	—		(18,584		)	—			(2,576		)
Operating prorations	195			—		—
Proceeds from the sale of hotel properties, net	$	434,361		$	—	$	73,416		$	—		$	116,624

Supplemental non-cash transactions
Accrued capital expenditures	$	2,566		$	6,956		$	3,640		$	2,050		$	3,508

FelCor TRS Distribution (1)	$	—		$	51,267		$	—

~~(1) Refer to Note 3, Merger with RLJ, for the non-cash assets and liabilities comprising the FelCor TRS distribution.~~

~~14.~~12. FelCor LP's Consolidating Financial Information

Certain of FelCor LP's 100% owned subsidiaries (FCH/PSH, L.P.; FelCor/CMB Buckhead Hotel, L.L.C.; FelCor/CMB Marlborough Hotel, L.L.C.; FelCor/CMB Orsouth Holdings, L.P.; FelCor/CMB SSF Holdings, L.P.; FelCor/CSS Holdings, L.P.; FelCor Dallas Love Field Owner, L.L.C.; FelCor Milpitas Owner, L.L.C.; FelCor TRS Borrower 4, L.L.C.; FelCor Hotel Asset Company, L.L.C.; FelCor St. Pete (SPE), L.L.C.; FelCor Esmeralda (SPE), L.L.C.; FelCor S-4 Hotels (SPE), L.L.C.; Madison 237 Hotel, L.L.C.; Myrtle Beach Owner, L.L.C.; and Royalton 44 Hotel, L.L.C., collectively the “Subsidiary Guarantors”), together with Rangers, guaranty, fully and unconditionally, except where subject to customary release provisions as described below, and jointly and severally, our senior notes debt.

The guaranties by the Subsidiary Guarantors may be automatically and unconditionally released upon (i) the sale or other disposition of all of the capital stock of the Subsidiary Guarantor or the sale or disposition of all or substantially all of the assets of the Subsidiary Guarantor, if, in each case, as a result of such sale or disposition, such Subsidiary Guarantor ceases to be a subsidiary of FelCor LP, (ii) the consolidation or merger of any such Subsidiary Guarantor with any person other than FelCor LP, or a subsidiary of FelCor LP, if, as a result of such consolidation or merger, such Subsidiary Guarantor ceases to be a subsidiary of the Operating Partnership, (iii) a legal defeasance or covenant defeasance of the indenture, (iv) the unconditional and complete release of such Subsidiary Guarantor in accordance with the modification and waiver provisions of the indenture, or (v) the designation of a restricted subsidiary that is a Subsidiary Guarantor as an unrestricted subsidiary under and in compliance with the indenture.

For the Predecessor period, FelCor TRS was a subsidiary guarantor in the condensed consolidating balance sheet, the condensed consolidating statements of operations and comprehensive income, and the condensed consolidating statements of cash flows. Pursuant to the terms of each of the indentures governing the Senior Notes, upon completion of the distribution of the equity interests in FelCor TRS, FelCor TRS' guarantee of the Senior Notes was automatically released and FelCor TRS Holdings, L.L.C. ceased being a subsidiary guarantor of the Senior Notes. Accordingly, FelCor TRS is not a subsidiary guarantor in the FelCor LP consolidating financial information for the Company.

The following tables present the consolidating financial information for the Subsidiary Guarantors:

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

~~September 30, 2018 (Successor)~~March 31, 2019

(in thousands)

FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated
Equity investment in consolidated entities $ 1,941,135
$ —
$ —
$ (1,941,135 ) $ —
Investment in hotel properties, net —
657,176
1,465,278
—
2,122,454
Investment in unconsolidated joint ventures 15,807
—
—
—
15,807
Cash and cash equivalents 10,346
—
5,389
—
15,735
Restricted cash reserves 439
—
4,786
—
5,225
Related party rent receivable —
19,816
25,796
—
45,612
Intangible assets, net —
46,907
—
—
46,907
Prepaid expense and other assets 2,004
657
2,440
—
5,101
Assets of hotel properties held for sale, net —
25,177
—
—
25,177
Total assets $ 1,969,731
$ 749,733
$ 1,503,689
$ (1,941,135 ) $ 2,282,018

Debt, net $ 506,503
$ —
$ 239,838
$ (32,709 ) $ 713,632
Accounts payable and other liabilities 9,902
16,091
21,049
—
47,042
Related party lease termination fee payable —
1,985
15,563
—
17,548
Accrued interest 9,588
—
—
—
9,588
Distributions payable —
—
122
—
122
Total liabilities 525,993
18,076
276,572
(32,709 ) 787,932

Partnership interests 1,443,738
731,657
1,176,769
(1,908,426 ) 1,443,738
Total partners' capital, excluding noncontrolling interest 1,443,738
731,657
1,176,769
(1,908,426 ) 1,443,738
Noncontrolling interest in consolidated joint ventures —
—
5,918
—
5,918
Preferred capital in a consolidated joint venture —
—
44,430
—
44,430
Total partners’ capital 1,443,738
731,657
1,227,117
(1,908,426 ) 1,494,086
Total liabilities and partners’ capital $ 1,969,731
$ 749,733
$ 1,503,689
$ (1,941,135 ) $ 2,282,018



	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	1,963,959	$	—	$	—	$	(1,963,959	)	$	—
Investment in hotel properties, net	—		653,372		1,461,616		—			2,114,988
Investment in unconsolidated joint ventures	15,876		—		—		—			15,876
Cash and cash equivalents	1,170		—		12,124		—			13,294
Restricted cash reserves	443		—		3,668		—			4,111
Related party rent receivable	—		7,069		18,712		—			25,781
Lease right-of-use assets	4,772		69,421		9,659		—			83,852
Prepaid expense and other assets	1,651		1,154		4,667		—			7,472
Total assets	$	1,987,871	$	731,016	$	1,510,446	$	(1,963,959	)	$	2,265,374

Debt, net	$	504,141	$	—	$	153,199	$	(32,709	)	$	624,631
Related party debt	—		—		85,000		—			85,000
Accounts payable and other liabilities	7,501		11,756		7,413		—			26,670
Lease liabilities	4,948		26,493		17,895		—			49,336
Accrued interest	9,588		—		—		—			9,588
Related party accrued interest	—		—		220		—			220
Total liabilities	526,178		38,249		263,727		(32,709		)	795,445

Partnership interests	1,461,693		692,767		1,238,483		(1,931,250		)	1,461,693
Total partners' capital, excluding noncontrolling interest	1,461,693		692,767		1,238,483		(1,931,250		)	1,461,693
Noncontrolling interest in consolidated joint ventures	—		—		8,236		—			8,236
Total partners’ capital	1,461,693		692,767		1,246,719		(1,931,250		)	1,469,929
Total liabilities and partners’ capital	$	1,987,871	$	731,016	$	1,510,446	$	(1,963,959	)	$	2,265,374

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

December 31, ~~2017 (Successor)~~2018

(in thousands)


	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated		FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	2,384,094	$	—	$	—	$	(2,384,094	)	$	—	$	1,913,418	$	—	$	—	$	(1,913,418	)	$	—
Investment in hotel properties, net	—		856,541		1,641,339		—			2,497,880		—		656,570		1,466,853		—			2,123,423
Investment in unconsolidated joint ventures	16,912		—		—		—			16,912		15,716		—		—		—			15,716
Cash and cash equivalents	9,202		—		5,526		—			14,728		10,778		—		10,573		—			21,351
Restricted cash reserves	436		—		2,867		—			3,303		441		—		2,770		—			3,211
Related party rent receivable	—		32,200		47,890		—			80,090		—		3,666		12,835		—			16,501
Intangible assets, net	—		48,846		69,324		—			118,170		—		46,260		—		—			46,260
Prepaid expense and other assets	4,405		3,292		4,994		—			12,691		1,819		1,297		3,436		—			6,552
Related party prepaid interest												—		—		180		—			180
Total assets	$	2,415,049	$	940,879	$	1,771,940	$	(2,384,094	)	$	2,743,774	$	1,942,172	$	707,793	$	1,496,647	$	(1,913,418	)	$	2,233,194

Debt, net	$	1,062,716	$	—	$	269,098	$	(32,709	)	$	1,299,105	$	505,322	$	—	$	154,015	$	(32,709	)	$	626,628
Related party debt												—		—		85,000		—			85,000
Accounts payable and other liabilities	20,018		13,605		20,568		—			54,191		9,288		14,376		19,725		—			43,389
Related party lease termination fee payable	—		—		7,707		—			7,707
Accrued interest	12,286		—		—		—			12,286		2,463		—		—		—			2,463
Distributions payable	—		—		126		—			126		—		—		126		—			126
Total liabilities	1,095,020		13,605		297,499		(32,709		)	1,373,415		517,073		14,376		258,866		(32,709		)	757,606

Partnership interests	1,320,029		927,274		1,424,111		(2,351,385		)	1,320,029		1,425,099		693,417		1,187,292		(1,880,709		)	1,425,099
Total partners' capital, excluding noncontrolling interest	1,320,029		927,274		1,424,111		(2,351,385		)	1,320,029		1,425,099		693,417		1,187,292		(1,880,709		)	1,425,099
Noncontrolling interest in consolidated joint ventures	—		—		5,900		—			5,900		—		—		6,059		—			6,059
Preferred capital in a consolidated joint venture	—		—		44,430		—			44,430		—		—		44,430		—			44,430
Total partners’ capital	1,320,029		927,274		1,474,441		(2,351,385		)	1,370,359		1,425,099		693,417		1,237,781		(1,880,709		)	1,475,588
Total liabilities and partners’ capital	$	2,415,049	$	940,879	$	1,771,940	$	(2,384,094	)	$	2,743,774	$	1,942,172	$	707,793	$	1,496,647	$	(1,913,418	)	$	2,233,194

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Three Months Ended ~~September 30, 2018 (Successor)~~March 31, 2019

(in thousands)


	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated			FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	27,360		$	30,451		$	—		$	57,811		$	—		$	18,272	$	31,649		$	—		$	49,921
Total revenues	—			27,360			30,451			—			57,811			—			18,272		31,649			—			49,921

Expenses
Depreciation and amortization	115			8,017			11,160			—			19,292			114			6,765		11,415			—			18,294
Property tax, insurance and other	(4		)	7,598			6,353			—			13,947			26			4,906		5,576			—			10,508
General and administrative	(491		)	29			(102		)	—			(564		)	385			20		9			—			414
Transaction costs	(4		)	261			(63		)	—			194			95			8		149			—			252
Total operating expenses	(384		)	15,905			17,348			—			32,869			620			11,699		17,149			—			29,468
Operating income	384			11,455			13,103			—			24,942
Other income	1			—			—			—			1			39			10		—			—			49
Interest income	285			—			15			(230		)	70			238			—		51			(194		)	95
Interest expense	(5,955		)	—			(2,742		)	230			(8,467		)	(5,944		)	—		(1,497		)	194			(7,247		)
Gain on sale of hotel properties, net	—			(9,971		)	34,225			—			24,254
Loss on extinguishment of indebtedness	(4		)	—			(1,652		)	—			(1,656		)
Related party interest expense																—			—		(1,166		)	—			(1,166		)
Income before equity in income from unconsolidated joint ventures	(5,289		)	1,484			42,949			—			39,144			(6,287		)	6,583		11,888			—			12,184
Equity in income from consolidated entities	44,007			—			—			(44,007		)	—			17,236			—		—			(17,236		)	—
Equity in income from unconsolidated joint ventures	218			—			—			—			218			107			—		—			—			107
Net income and comprehensive income	38,936			1,484			42,949			(44,007		)	39,362			11,056			6,583		11,888			(17,236		)	12,291
Noncontrolling interest in consolidated joint ventures	—			—			(52		)	—			(52		)	—			—		104			—			104
Preferred distributions - consolidated joint venture	—			—			(374		)	—			(374		)	—			—		(186		)	—			(186		)
Redemption of preferred capital - consolidated joint venture																—			—		(1,153		)	—			(1,153		)
Net income and comprehensive income attributable to FelCor LP	$	38,936		$	1,484		$	42,523		$	(44,007	)	$	38,936		$	11,056		$	6,583	$	10,653		$	(17,236	)	$	11,056

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the ~~Period of September 1, 2017 through September 30, 2017 (Successor)~~Three Months Ended March 31, 2018

(in thousands)


	FelCor LP			Subsidiary Guarantors		Non-Guarantor Subsidiaries			Eliminations			Total Consolidated			FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	9,511	$	11,343		$	—		$	20,854		$	—		$	18,853		$	34,697		$	—		$	53,550
Total revenues	—			9,511		11,343			—			20,854			—			18,853			34,697			—			53,550

Expenses
Depreciation and amortization	38			2,021		3,915			—			5,974			114			8,752			11,846			—			20,712
Property tax, insurance and other	8			2,821		1,620			—			4,449			42			7,485			7,304			—			14,831
General and administrative	191			—		1			—			192			481			40			87			—			608
Transaction costs	1,034			4		1			—			1,039			1,509			8			11			—			1,528
Total operating expenses	1,271			4,846		5,537			—			11,654			2,146			16,285			19,248			—			37,679
Operating income	(1,271		)	4,665		5,806			—			9,200
Other income															8			—			—			—			8
Interest income	27			—		—			(24		)	3			108			—			—			(78		)	30
Interest expense	(3,980		)	—		(825		)	26			(4,779		)	(10,587		)	—			(2,638		)	78			(13,147		)
Loss on sale of hotel properties, net															—			(9,399		)	33			—			(9,366		)
Gain on extinguishment of indebtedness															12,929			—			—			—			12,929
Income before equity in income from unconsolidated joint ventures	(5,224		)	4,665		4,981			2			4,424			312			(6,831		)	12,844			—			6,325
Equity in income from consolidated entities	9,641			—		—			(9,641		)	—			5,723			—			—			(5,723		)	—
Equity in income from unconsolidated joint ventures	—			—		115			—			115			116			—			—			—			116
Net income and comprehensive income	4,417			4,665		5,096			(9,639		)	4,539			6,151			(6,831		)	12,844			(5,723		)	6,441
Noncontrolling interest in consolidated joint ventures	(51		)	—		—			—			(51		)	—			—			76			—			76
Preferred distributions - consolidated joint venture	—			—		(122		)	—			(122		)	—			—			(366		)	—			(366		)
Net income and comprehensive income attributable to FelCor LP	$	4,366		$	4,665	$	4,974		$	(9,639	)	$	4,366		$	6,151		$	(6,831	)	$	12,554		$	(5,723	)	$	6,151

~~FelCor Lodging Limited Partnership~~

~~Condensed Consolidating Statement of Operations and Comprehensive Loss~~

~~For the Period of July 1, 2017 through August 31, 2017 (Predecessor)~~

~~(in thousands~~

FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated
Revenues
Room revenue $ —
$ 111,977
$ —
$ —
$ 111,977
Food and beverage revenue —
20,577
—
—
20,577
Related party lease revenue —
—
(20 ) 20
—
Other revenue 2
10,281
134
—
10,417
Total revenues 2
142,835
114
20
142,971

Expenses
Room expense —
28,652
—
—
28,652
Food and beverage expense —
17,325
—
—
17,325
Management and franchise fee expense —
4,625
—
—
4,625
Other operating expense —
37,272
—
—
37,272
Total property operating expenses —
87,874
—
—
87,874
Depreciation and amortization 78
6,494
11,127
—
17,699
Property tax, insurance and other 815
7,286
4,526
20
12,647
General and administrative —
1,889
896
—
2,785
Transaction costs 61,932
—
—
—
61,932
Total operating expenses 62,825
103,543
16,549
20
182,937
Operating loss (62,823 ) 39,292
(16,435 ) —
(39,966 )
Intercompany interest income (expense) 56
—
(56 ) —
—
Interest income 23
23
—
—
46
Interest expense (9,637 ) —
(3,271 ) —
(12,908 )
Loss on sale of hotel properties, net 2
(913 ) 20
—
(891 )
Loss on extinguishment of indebtedness —
—
(3,278 ) —
(3,278 )
Loss before equity in income from unconsolidated joint ventures (72,379 ) 38,402
(23,020 ) —
(56,997 )
Equity in income from consolidated entities 16,160
—
—
(16,160 ) —
Equity in income from unconsolidated joint ventures 165
399
(8 ) —
556
Loss before income tax benefit (56,054 ) 38,801
(23,028 ) (16,160 ) (56,441 )
Income tax benefit 20
531
—
—
551
Loss from continuing operations (56,034 ) 39,332
(23,028 ) (16,160 ) (55,890 )
Loss from discontinued operations (3,415 ) —
—
—
(3,415 )
Net loss and comprehensive loss (59,449 ) 39,332
(23,028 ) (16,160 ) (59,305 )
Noncontrolling interest in consolidated joint ventures —
76
32
—
108
Preferred distributions - consolidated joint venture —
—
(252 ) —
(252 )
Net loss and comprehensive loss attributable to FelCor LP (59,449 ) 39,408
(23,248 ) (16,160 ) (59,449 )
Preferred distributions (4,186 ) —
—
—
(4,186 )
Net loss and comprehensive loss attributable to FelCor LP common unitholders $ (63,635 ) $ 39,408
$ (23,248 ) $ (16,160 ) $ (63,635 )

~~FelCor Lodging Limited Partnership~~

~~Condensed Consolidating Statement of Operations and Comprehensive Income~~

~~For the Nine Months Ended September 30, 2018 (Successor)~~

~~(in thousands)~~

FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated
Revenues
Related party lease revenue $ —
$ 70,046
$ 101,965
$ —
$ 172,011
Total revenues —
70,046
101,965
—
172,011

Expenses
Depreciation and amortization 343
25,129
35,024
—
60,496
Property tax, insurance and other 99
22,310
20,425
—
42,834
General and administrative 482
84
29
—
595
Transaction costs 1,979
361
29
—
2,369
Total operating expenses 2,903
47,884
55,507
—
106,294
Operating income (2,903 ) 22,162
46,458
—
65,717
Other income 10
—
101
—
111
Interest income 524
—
15
(386 ) 153
Interest expense (22,485 ) —
(8,122 ) 386
(30,221 )
Gain on sale of hotel properties, net —
(19,386 ) 34,316
—
14,930
Gain on extinguishment of indebtedness, net 12,932
—
(1,652 ) —
11,280
Income before equity in income from unconsolidated joint ventures (11,922 ) 2,776
71,116
—
61,970
Equity in income from consolidated entities 72,765
—
—
(72,765 ) —
Equity in income from unconsolidated joint ventures 945
—
—
—
945
Net income and comprehensive income 61,788
2,776
71,116
(72,765 ) 62,915
Noncontrolling interest in consolidated joint ventures —
—
(18 ) —
(18 )
Preferred distributions - consolidated joint venture —
—
(1,109 ) —
(1,109 )
Net income and comprehensive income attributable to FelCor LP $ 61,788
$ 2,776
$ 69,989
$ (72,765 ) $ 61,788

~~FelCor Lodging Limited Partnership~~

~~Condensed Consolidating Statement of Operations and Comprehensive Loss~~

~~For the Period of January 1, 2017 through August 31, 2017 (Predecessor)~~

~~(in thousands)~~

FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated
Revenues
Room revenue $ —
$ 425,682
$ —
$ —
$ 425,682
Food and beverage revenue —
90,572
—
—
90,572
Related party lease revenue —
—
84,509
(84,509 ) —
Other revenue 41
34,883
337
—
35,261
Total revenues 41
551,137
84,846
(84,509 ) 551,515

Expenses
Room expense —
112,813
—
—
112,813
Food and beverage expense —
71,828
—
—
71,828
Management and franchise fee expense —
19,901
—
—
19,901
Other operating expense —
147,827
—
—
147,827
Total property operating expenses —
352,369
—
—
352,369
Depreciation and amortization 309
28,064
44,692
—
73,065
Impairment loss —
35,109
—
—
35,109
Property tax, insurance and other 921
111,020
16,846
(84,509 ) 44,278
General and administrative —
8,914
7,092
—
16,006
Transaction costs 68,248
—
—
—
68,248
Total operating expenses 69,478
535,476
68,630
(84,509 ) 589,075
Operating loss (69,437 ) 15,661
16,216
—
(37,560 )
Other income —
—
100
—
100
Intercompany interest income (expense) 241
—
(241 ) —
—
Interest income 66
59
1
—
126
Interest expense (38,722 ) —
(12,968 ) —
(51,690 )
Loss on sale of hotel properties, net 2
(1,565 ) (201 ) —
(1,764 )
Loss on extinguishment of indebtedness —
—
(3,278 ) —
(3,278 )
Loss before equity in income from unconsolidated joint ventures (107,850 ) 14,155
(371 ) —
(94,066 )
Equity in income from consolidated entities 12,779
—
—
(12,779 ) —
Equity in income from unconsolidated joint ventures 1,181
(77 ) (30 ) —
1,074
Loss before income tax expense (93,890 ) 14,078
(401 ) (12,779 ) (92,992 )
Income tax expense (35 ) (464 ) —
—
(499 )
Loss from continuing operations (93,925 ) 13,614
(401 ) (12,779 ) (93,491 )
Loss from discontinued operations (3,415 ) —
—
—
(3,415 )
Net loss and comprehensive loss (97,340 ) 13,614
(401 ) (12,779 ) (96,906 )
Noncontrolling interest in consolidated joint ventures —
336
209
—
545
Preferred distributions - consolidated joint venture —
—
(979 ) —
(979 )
Net loss and comprehensive loss attributable to FelCor LP (97,340 ) 13,950
(1,171 ) (12,779 ) (97,340 )
Preferred distributions (16,744 ) —
—
—
(16,744 )
Net loss and comprehensive loss attributable to FelCor LP common unitholders $ (114,084 ) $ 13,950
$ (1,171 ) $ (12,779 ) $ (114,084 )

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the ~~Nine~~Three Months Ended ~~September 30, 2018 (Successor)~~March 31, 2019

(in thousands)


	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated			FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(38,965	)	$	66,876		$	105,305		$	—		$	133,216		$	(1,236	)	$	10,947		$	15,502		$	—		$	25,213
Investing activities:
Proceeds from the sale of hotel properties, net	—			151,466			282,895			—			434,361
Improvements and additions to hotel properties	—			(21,751		)	(36,458		)	—			(58,209		)	—			(3,714		)	(9,325		)	—			(13,039		)
Additions to property and equipment	(4		)	—			—			—			(4		)
Contributions to unconsolidated joint ventures																(603		)	—			—			—			(603		)
Intercompany financing	515,209			—			—			(515,209		)	—			(33,305		)	—			—			33,305			—
Cash flows from investing activities	515,205			129,715			246,437			(515,209		)	376,148			(33,908		)	(3,714		)	(9,325		)	33,305			(13,642		)
Financing activities:
Repayments of borrowings	(538,813		)	—			(30,220		)	—			(569,033		)	—			—			(650		)	—			(650		)
Contributions from partners	673,853			—			—			—			673,853			73,846			—			—			—			73,846
Distributions to partners	(610,132		)	—			—			—			(610,132		)	(48,308		)	—			—			—			(48,308		)
Payments of deferred financing costs	—			—			(10		)	—			(10		)	—			(1		)	(1		)	—			(2		)
Preferred distributions - consolidated joint venture	—			—			(1,113		)	—			(1,113		)	—			—			(312		)	—			(312		)
Redemption of preferred capital - consolidated joint venture																—			—			(45,583		)	—			(45,583		)
Contributions from joint venture partners																—			—			2,281			—			2,281
Intercompany financing	—			(196,591		)	(318,618		)	515,209			—			—			(7,232		)	40,537			(33,305		)	—
Cash flows from financing activities	(475,092		)	(196,591		)	(349,961		)	515,209			(506,435		)	25,538			(7,233		)	(3,728		)	(33,305		)	(18,728		)
Net change in cash, cash equivalents, and restricted cash reserves	1,148			—			1,781			—			2,929			(9,606		)	—			2,449			—			(7,157		)
Cash, cash equivalents, and restricted cash reserves, beginning of year	9,637			—			8,394			—			18,031			11,219			—			13,343			—			24,562
Cash, cash equivalents, and restricted cash reserves, end of period	$	10,785		$	—		$	10,175		$	—		$	20,960		$	1,613		$	—		$	15,792		$	—		$	17,405

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the ~~Period of September 1, 2017 through September 30, 2017 (Successor)~~Three Months Ended March 31, 2018

(in thousands)


	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated			FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(8,078	)	$	(1,666	)	$	(1,418	)	$	—		$	(11,162	)	$	(24,317	)	$	31,603		$	42,012		$	—		$	49,298
Investing activities:
Proceeds from the sale of hotel properties, net																—			116,591			33			—			116,624
Improvements and additions to hotel properties	—			(16		)	(39		)	—			(55		)	—			(5,416		)	(12,725		)	—			(18,141		)
Additions to property and equipment																(3		)	—			—			—			(3		)
Intercompany financing	(6,879		)	—			—			6,879			—			171,272			—			—			(171,272		)	—
Cash flows from investing activities	(6,879		)	(16		)	(39		)	6,879			(55		)	171,269			111,175			(12,692		)	(171,272		)	98,480
Financing activities:
Repayment of borrowings	—			—			(471		)	—			(471		)
Repayments of borrowings																(538,760		)	—			(752		)	—			(539,512		)
Contributions from partners	35,545			—			—			—			35,545			598,033			—			—			—			598,033
Distributions to partners	(19,123		)	—			—			—			(19,123		)	(206,212		)	—			—			—			(206,212		)
Distribution of FelCor TRS	—			(51,867		)	—			—			(51,867		)
Payments of deferred financing costs																—			—			(10		)	—			(10		)
Preferred distributions - consolidated joint venture	—			—			(126		)	—			(126		)	—			—			(366		)	—			(366		)
Intercompany financing	—			5,056			1,823			(6,879		)	—			—			(142,778		)	(28,494		)	171,272			—
Cash flows from financing activities	16,422			(46,811		)	1,226			(6,879		)	(36,042		)	(146,939		)	(142,778		)	(29,622		)	171,272			(148,067		)
Net change in cash, cash equivalents, and restricted cash reserves	1,465			(48,493		)	(231		)	—			(47,259		)	13			—			(302		)	—			(289		)
Cash, cash equivalents, and restricted cash reserves, beginning of period	7,965			48,507			7,962			—			64,434
Cash, cash equivalents, and restricted cash reserves, beginning of year																9,637			—			8,394			—			18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	9,430		$	14		$	7,731		$	—		$	17,175		$	9,650		$	—		$	8,092		$	—		$	17,742

~~FelCor Lodging Limited Partnership~~

~~Condensed Consolidating Statement of Cash Flows~~

~~For the Period of January 1, 2017 through August 31, 2017 (Predecessor)~~

~~(in thousands)~~

FelCor LP Subsidiary Guarantors Non-Guarantor Subsidiaries Eliminations Total Consolidated
Operating activities:
Cash flows from operating activities $ (40,773 ) $ 85,899
$ 54,214
$ —
$ 99,340
Investing activities:
Proceeds from the sale of hotel properties, net (696 ) 74,281
(169 ) —
73,416
Improvements and additions to hotel properties 1
(16,727 ) (47,076 ) —
(63,802 )
Distributions from unconsolidated joint ventures in excess of earnings 840
—
—
—
840
Intercompany financing 91,391
—
—
(91,391 ) —
Cash flows from investing activities 91,536
57,554
(47,245 ) (91,391 ) 10,454
Financing activities:
Proceeds from borrowings —
—
66,000
—
66,000
Repayments of borrowings —
—
(121,691 ) —
(121,691 )
Distributions to preferred unitholders (18,836 ) —
—
—
(18,836 )
Distributions to common unitholders (30,926 ) —
—
—
(30,926 )
Distributions to noncontrolling interests —
—
(150 ) —
(150 )
Contributions from noncontrolling interests —
333
—
—
333
Net proceeds from the issuance of preferred capital in a consolidated joint venture —
—
647
—
647
Intercompany financing —
(140,853 ) 49,462
91,391
—
Other (6,568 ) —
(977 ) —
(7,545 )
Cash flows from financing activities (56,330 ) (140,520 ) (6,709 ) 91,391
(112,168 )
Net change in cash, cash equivalents, and restricted cash reserves (5,567 ) 2,933
260
—
(2,374 )
Cash, cash equivalents, and restricted cash reserves, beginning of year 13,532
45,574
7,702
—
66,808
Cash, cash equivalents, and restricted cash reserves, end of period $ 7,965
$ 48,507
$ 7,962
$ —
$ 64,434

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report, as well as the information contained in the combined Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 of Rangers Sub I, LLC ("Rangers") and FelCor Lodging Limited Partnership ("FelCor LP"), filed with the SEC on March ~~2, 2018~~1, 2019 (the "Annual Report"), which is accessible on the SEC’s website at www.sec.gov.

Statement Regarding Forward-Looking Information

The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend," "should," or similar expressions. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty, increased direct competition, changes in government regulations or accounting rules, changes in local, national and global real estate conditions, declines in the lodging industry, seasonality of the lodging industry, risks related to natural disasters, such as earthquakes and hurricanes, hostilities, including future terrorist attacks or fear of hostilities that affect travel, our ability to obtain lines of credit or permanent financing on satisfactory terms, changes in interest rates, access to capital through offerings of our common and preferred shares of beneficial interest, or debt, our ability to identify suitable acquisitions, our ability to close on identified acquisitions and integrate those businesses and inaccuracies of our accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements.

Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. We caution investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures we make concerning risks and uncertainties in the sections entitled "Forward-Looking Statements," "Risk ~~Factors,"~~Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report, as well as the risks, uncertainties and other factors discussed in this Quarterly Report on Form 10-Q and identified in other documents filed by us with the SEC.

Overview

Rangers is a Maryland limited liability company that, through FelCor LP, owns hotel properties and conducts other business. Substantially all of Rangers' assets and liabilities are held by, and all of its operations are conducted through, FelCor LP. 100% of the ownership interests of Rangers are held by RLJ LP, which is the operating partnership of RLJ, one of the largest U.S. publicly traded lodging REITs in terms of both number of hotels and number of rooms. Rangers indirectly owns a 99% partnership interest in FelCor LP. Rangers GP, a wholly-owned subsidiary of RLJ LP, owns the remaining 1% partnership interest and is the sole general partner of FelCor LP.

Our hotel properties are concentrated in markets that we believe exhibit multiple demand generators and attractive long-term growth prospects. We believe premium-branded, compact full-service hotels with these characteristics generate high levels of Revenue per Available Room ("RevPAR"), strong operating margins and attractive returns.

As we look at factors that could impact our business, we find that the consumer is generally in good financial health, job creation remains positive and an increase in wages is adding to consumers' disposable income. While geopolitical and global economic uncertainty still exists, ~~and interest rates are rising,~~ we remain cautiously optimistic that positive employment trends, high consumer confidence and elevated corporate sentiment will continue to drive economic expansion in the U.S. and generate positive lodging demand and RevPAR growth for the industry. However, in light of accelerating supply and signs of slowing economic growth, RevPAR growth is likely to be moderate. Low unemployment rates can impact the cost of labor through higher wages and benefits, which negatively impact our financial and operating results.

RLJ continues to follow a prudent and disciplined capital allocation strategy. RLJ will continue to look for and weigh all possible investment decisions against the highest and best returns for its shareholders over the long term. RLJ believes that its cash on hand and expected access to capital along with its senior management team's experience, extensive industry

relationships and asset management expertise, will enable us to pursue investment opportunities that generate additional internal and external growth.

As of ~~September 30, 2018,~~March 31, 2019, we owned 3130 hotel properties with approximately ~~9,365~~8,800 rooms, located in 13 states. We owned, through wholly-owned subsidiaries, a 100% interest in 2827 hotel properties, a 95% interest in The Knickerbocker, and 50% interests in entities owning two hotel properties. We consolidate the real estate interests in the 2928 hotel properties in which we hold a controlling financial interest, and we record the real estate interests in the two hotels in which we hold an indirect 50% interest using the equity method of accounting. The Company leases 3029 of its 3130 hotel properties to subsidiaries of RLJ LP.

~~Recent~~2019 Significant Activities

Our significant activities reflect RLJ's commitment to creating long-term shareholder value through enhancing its hotel portfolio's quality, recycling capital and maintaining a prudent capital structure. ~~During~~In line with this, in February 2019, we fully redeemed the ~~nine months ended September 30, 2018,~~preferred equity under the ~~following significant activities took place:~~

~~In February 2018, we sold the Embassy Suites Boston Marlborough in Marlborough, Massachusetts~~EB-5 Immigrant Investor Program for ~~$23.7 million.~~

~~In March 2018, we completed the early redemption of the senior secured notes in full for an aggregate principal amount of $524.0 million.~~

~~In March 2018, we sold the Sheraton Philadelphia Society Hill Hotel in Philadelphia, Pennsylvania for $95.5 million.~~

~~In July 2018, we sold the Embassy Suites Napa Valley in Napa, California for $102.0 million.~~

In July 2018, we entered into a purchase and sale agreement to sell the Holiday Inn San Francisco - Fisherman's Wharf. At September 30, 2018, this hotel property has been included in assets of hotel properties held for sale, net on the consolidated balance sheet. The transaction closed on October 15, 2018.

~~In August 2018, we sold The Vinoy Renaissance St. Petersburg Resort & Golf Club in St. Petersburg, Florida for $185.0 million.~~

~~In September 2018, we sold the DoubleTree by Hilton Burlington Vermont in Burlington, Vermont for $35.0~~$45.6 million.

Our Customers

Our hotel property-owning subsidiaries (the "Lessors") receive ~~rental income~~lease revenue from the property-operating subsidiaries (the "Lessees") under lease ~~agreements.~~contracts. The lease ~~agreements~~contracts contain a specific base rent amount or a percentage rent amount, which is calculated based on a percentage of room revenues, food and beverage revenues, and other revenues at the hotel properties.

Substantially all of our hotel properties consist of premium-branded, compact full-service hotels. As a result of this property profile, the majority of our hotel properties' customers are transient in nature. Transient business typically represents individual business or leisure travelers. As a result, macroeconomic factors that impact both business travel and leisure travel have an effect on our business. Group business is typically defined as a minimum of 10 guestrooms booked together as part of the same piece of business. Group business may or may not use the meeting space at any given hotel. A number of our hotels are affiliated with brands marketed toward extended-stay customers. Extended-stay customers are generally defined as those staying five nights or longer.

Our Revenues and Expenses

Our revenues are derived from ~~rental income~~lease revenue received under lease ~~agreements,~~contracts with related parties, which contain a specific base rent amount or a percentage rent amount, which is calculated based on a percentage of room revenue, food and beverage revenue, and other revenue at the hotel properties.

Our expenses consist of the depreciation ~~and amortization~~ on our investment in hotel properties ~~and intangible assets,~~ and property taxes, insurance, and other property-related costs of our hotel properties.

For the Predecessor period, our revenues were primarily derived from the operation of hotels, including the sale of rooms, food and beverage revenue and other revenue, which consists of parking fees, golf, pool, and other resort fees, gift shop sales, and other guest service fees.

For the Predecessor period, our operating costs and expenses consist of the costs to provide hotel services, including room expense, food and beverage expense, management and franchise fees and other operating expenses. Room expense includes housekeeping and front office wages and payroll taxes, reservation systems, room supplies, laundry services and other costs. Food and beverage expense primarily includes the cost of food, the cost of beverages and associated labor costs. Other operating expenses include labor and other costs associated with the other operating department revenue, as well as labor and other costs associated with administrative departments, sales and marketing, repairs and maintenance and utility costs. Our hotel properties that are subject to franchise agreements are charged a royalty fee, plus additional fees for marketing, central reservation systems and other franchisor costs, in order for the hotel properties to operate under the respective brands. The franchise fees are based on a percentage of room revenue. Our hotel properties are managed by independent, third-party management companies under long-term agreements pursuant to which the management companies typically earn base and incentive management fees based on the levels of revenues and profitability of each individual hotel property. We generally receive a cash distribution from the management companies on a monthly basis, which reflects the hotel-level sales less hotel-level operating expenses.

Key Indicators of Financial Performance

We use financial information to evaluate the amount of rental income we receive from the Lessees under our lease agreements. We earn a base rent amount or a percentage rent amount, which is calculated based on a percentage of room revenues, food and beverage revenues, and other revenues at the hotel properties. Industry standard statistical information and comparative data, such as Average Daily Rate ("ADR"), occupancy, and RevPAR, are used to measure the operating performance of our hotel properties, including its impact on the amount of rental income recognized from base rent or percentage rent. We also use financial information to evaluate the significance of the property taxes, insurance, and other property-related costs at our hotel properties.

We use a variety of operating, financial and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In addition, we use other information that may not be financial in nature, including industry standard statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotel properties in our portfolio to determine each hotel's contribution to cash flow and its potential to provide attractive long-term total returns. The key indicators included:

ADR

Occupancy

RevPAR

ADR, Occupancy and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring the operating performance at the individual hotel property level and across our entire business. We evaluate the individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only room revenue.

Critical Accounting Policies

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. It is possible that the actual amounts may differ significantly from these estimates and assumptions. We evaluate our estimates, assumptions and judgments on an ongoing basis, based on information that is available to us, our business and industry experience, and various other matters that we believe are reasonable and appropriate for consideration under the circumstances. Our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 contains a discussion of our critical accounting policies. There have been no significant changes to our critical accounting policies since December 31, ~~2017.~~2018.

Results of Operations

At ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ we owned 3130 and 3734 hotel properties, respectively. Based on when a hotel property is acquired, sold, or closed for renovation, the operating results for certain hotel properties are not comparable for the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2019 and ~~2017.~~2018. The non-comparable hotel properties include ~~eight~~six dispositions that were completed between January 1, ~~2017~~2018 and ~~September 30, 2018.~~

As discussed in Note 3 to our accompanying consolidated financial statements, Merger with RLJ, RLJ elected to apply pushdown accounting to the Company's consolidated financial statements. Accordingly, the Company's consolidated financial statements for the periods before and after AugustMarch 31, 2017 (the "Acquisition Date") reflect different bases of accounting, and the results of operations for those periods are not comparable. As a result, the results of operations are separated into two distinct periods; the periods prior to the Acquisition Date are identified as "Predecessor", and the periods after the Acquisition Date are identified as "Successor". Additionally, immediately after the consummation of the Mergers, the Company distributed the equity interests in FelCor TRS to RLJ LP. As a result of the distribution of FelCor TRS, the Lessees' lease payments are no longer eliminated in consolidation.2019.

Comparison of the three months ended ~~September 30, 2018~~March 31, 2019 to ~~the Successor period of September 1, 2017 through September 30, 2017 and the Predecessor period of July 1, 2017 through August 31, 2017~~

Successor Predecessor
For the three months ended September 30,
September 1
through
September 30,
July 1 through August 31,
2018 2017 2017 $ Change % Change
Revenues
Operating revenues
Room revenue $ —
$ —
$ 111,977
$ (111,977 ) (100.0 )%
Food and beverage revenue —
—
20,577
(20,577 ) (100.0 )%
Related party lease revenue 57,811
20,854
—
36,957
— %
Other revenue —
—
10,417
(10,417 ) (100.0 )%
Total revenues $ 57,811
$ 20,854
$ 142,971
$ (106,014 ) (64.7 )%
Expenses

Operating expenses

Room expense $ —
$ —
$ 28,652
$ (28,652 ) (100.0 )%
Food and beverage expense —
—
17,325
(17,325 ) (100.0 )%
Management and franchise fee expense —
—
4,625
(4,625 ) (100.0 )%
Other operating expense —
—
37,272
(37,272 ) (100.0 )%
Total property operating expenses —
—
87,874
(87,874 ) (100.0 )%
Depreciation and amortization 19,292
5,974
17,699
(4,381 ) (18.5 )%
Property tax, insurance and other 13,947
4,449
12,647
(3,149 ) (18.4 )%
General and administrative (564 ) 192
2,785
(3,541 ) — %
Transaction costs 194
1,039
61,932
(62,777 ) (99.7 )%
Total operating expenses 32,869
11,654
182,937
(161,722 ) (83.1 )%
Operating income (loss) 24,942
9,200
(39,966 ) 55,708
— %
Other income 1
—
—
1
100.0 %
Interest income 70
3
46
21
42.9 %
Interest expense (8,467 ) (4,779 ) (12,908 ) 9,220
(52.1 )%
Gain (loss) on sale of hotel properties, net 24,254
—
(891 ) 25,145
— %
Loss on extinguishment of indebtedness (1,656 ) —
(3,278 ) 1,622
(49.5 )%
Income (loss) before equity in income from unconsolidated joint ventures 39,144
4,424
(56,997 ) 91,717
— %
Equity in income from unconsolidated joint ventures 218
115
556
(453 ) (67.5 )%
Income (loss) before income tax benefit 39,362
4,539
(56,441 ) 91,264
— %
Income tax benefit —
—
551
(551 ) (100.0 )%
Income (loss) from continuing operations 39,362
4,539
(55,890 ) 90,713
— %
Loss from discontinued operations —
—
(3,415 ) 3,415
(100.0 )%
Net income (loss) and comprehensive income (loss) 39,362
4,539
(59,305 ) 94,128
— %
Net (income) loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures (52 ) (51 ) 108
(109 ) — %
Noncontrolling interest in FelCor LP (389 ) (45 ) 274
(618 ) — %
Preferred distributions - consolidated joint venture (374 ) (122 ) (252 ) —
— %
Net income (loss) and comprehensive income (loss) attributable to Rangers 38,547
4,321
(59,175 ) 93,401
— %
Preferred dividends —
—
(4,186 ) 4,186
(100.0 )%
Net income (loss) and comprehensive income (loss) attributable to ownership interests/common shareholders $ 38,547
$ 4,321
$ (63,361 ) $ 97,587
— %

~~Revenues~~

~~Total revenues for~~ the three months ended ~~September 30,~~March 31, 2018 decreased $106.0 million, or 64.7%, to $57.8 million from $163.9 million for the three months ended September 30, 2017 ($20.9 million for the Successor period of September 1, 2017 through September 30, 2017 and $143.0 million for the Predecessor period of July 1, 2017 through August 31, 2017). The decrease was the result of a $112.0 million decrease in room revenue, a $20.6 million decrease in food and beverage revenue, and a $10.4 million decrease in other revenue, partially offset by a $37.0 million increase in related party lease revenue.



	For the three months ended March 31,
	2019			2018			$ Change			% Change
Revenues
Operating revenues
Related party lease revenue	$	49,921		$	53,550		$	(3,629	)	(6.8	)%
Total revenues	49,921			53,550			(3,629		)	(6.8	)%
Expenses
Operating expenses
Depreciation and amortization	18,294			20,712			(2,418		)	(11.7	)%
Property tax, insurance and other	10,508			14,831			(4,323		)	(29.1	)%
General and administrative	414			608			(194		)	(31.9	)%
Transaction costs	252			1,528			(1,276		)	(83.5	)%
Total operating expenses	29,468			37,679			(8,211		)	(21.8	)%
Other income	49			8			41			—	%
Interest income	95			30			65			—	%
Interest expense	(7,247		)	(13,147		)	5,900			(44.9	)%
Related party interest expense	(1,166		)	—			(1,166		)	100.0	%
Loss on sale of hotel properties, net	—			(9,366		)	9,366			(100.0	)%
Gain on extinguishment of indebtedness	—			12,929			(12,929		)	(100.0	)%
Income before equity in income from unconsolidated joint ventures	12,184			6,325			5,859			92.6	%
Equity in income from unconsolidated joint ventures	107			116			(9		)	(7.8	)%
Net income and comprehensive income	12,291			6,441			5,850			90.8	%
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	104			76			28			36.8	%
Noncontrolling interest in FelCor LP	(111		)	(62		)	(49		)	79.0	%
Preferred distributions - consolidated joint venture	(186		)	(366		)	180			(49.2	)%
Redemption of preferred equity - consolidated joint venture	(1,153		)	—			(1,153		)	100.0	%
Net income and comprehensive income attributable to Rangers	$	10,945		$	6,089		$	4,856		79.8	%

~~Room Revenue~~

Room revenue for the three months ended September 30, 2018 decreased $112.0 million, or 100.0%, from the three months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Food and Beverage Revenue~~

Food and beverage revenue for the three months ended September 30, 2018 decreased $20.6 million, or 100.0%, from the three months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.Revenues

Related Party Lease Revenue

Related party lease revenue for the three months ended ~~September 30, 2018 increased $37.0~~March 31, 2019 decreased $3.6 million, or 6.8%, to ~~$57.8~~$49.9 million from ~~$20.9~~$53.6 million for the three months ended ~~September 30, 2017 ($20.9~~March 31, 2018. The decrease was a result of a $9.5 million ~~for the Successor period of September 1, 2017 through September 30, 2017 and $0.0 million for the Predecessor period of July 1, 2017 through August 31, 2017). The recognition of~~decrease in related party lease revenue ~~in the Successor period as compared~~attributable to the ~~Predecessor period is~~non-comparable properties, partially offset by a $5.9 million increase in related party lease revenue attributable to the comparable properties. The increase in related party lease revenue from the comparable properties was attributable to an increase in percentage lease revenue as a result of ~~the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation~~higher room revenues, food and beverage revenues and other revenues of the ~~Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.~~

~~Other Revenue~~

~~Other revenue, which includes revenue derived from ancillary sources such as parking fees, golf, pool,~~Lessees. The percentage rent amounts are calculated based on a percentage of room revenues, food and beverage revenues and other ~~resort fees, gift shop sales and other guest service fees, for~~revenues at the three months ended September 30, 2018 decreased $10.4 million, or 100.0%, from the three months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.hotel properties.

~~Property Operating Expenses~~

Property operating expenses for the three months ended September 30, 2018 decreased $87.9 million, or 100.0%, from the three months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended ~~September 30, 2018~~March 31, 2019 decreased ~~$4.4~~$2.4 million, or ~~18.5%~~11.7%, to ~~$19.3~~$18.3 million from ~~$23.7~~$20.7 million for the three months ended ~~September 30, 2017 ($6.0 million for the Successor period of September 1, 2017 through September 30, 2017 and $17.7 million for the Predecessor period of July 1, 2017 through August~~March 31, ~~2017).~~2018. The decrease was ~~primarily the~~a result of a ~~$4.0~~$4.4 million decrease in depreciation and amortization expense ~~associated with~~attributable to the ~~hotel~~non-comparable properties, ~~that were sold during the comparative period and~~partially offset by a ~~$0.4~~$2.0 million ~~decrease~~increase in depreciation and amortization expense ~~as a result of~~attributable to the ~~pushdown accounting for the new basis of accounting established by RLJ for the assets acquired in the Mergers.~~comparable properties.

Property Tax, Insurance and Other

Property tax, insurance and other expense for the three months ended ~~September 30, 2018~~March 31, 2019 decreased ~~$3.1~~$4.3 million, or ~~18.4%~~29.1%, to ~~$13.9~~$10.5 million from ~~$17.1~~$14.8 million for the three months ended ~~September 30, 2017 ($4.4 million for the Successor period of September 1, 2017 through September 30, 2017 and $12.6 million for the Predecessor period of July 1, 2017 through August~~March 31, ~~2017).~~2018. The decrease was primarily ~~the result of~~attributable to a $3.8 million decrease in property tax, insurance and other expense ~~associated with hotel~~attributable to the non-comparable properties ~~that were sold during the comparative period, partially offset by an increase~~and a $0.5 million decrease in property tax, insurance and other expense ~~as a result of property tax reassessments in certain jurisdictions as a result of~~attributable to the ~~Merger with RLJ.~~comparable properties.

General and Administrative

General and administrative expense ~~decreased $3.5 million during~~for the three months ended ~~September 30, 2018~~March 31, 2019 decreased $0.2 million, or 31.9%, to $0.4 million from ~~$3.0~~$0.6 million for the three months ended ~~September 30, 2017 ($0.2 million for the Successor period of September 1, 2017 through September 30, 2017 and $2.8 million for the Predecessor period of July 1, 2017 through August~~March 31, 2017). The decrease in general and administrative expense was primarily attributable to the Mergers on August 31, 2017, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ. The Merger with RLJ resulted in a decrease in compensation expense and a decrease in other general and administrative expenses. The decrease in general and administrative expense was also attributable to a decrease of $0.9 million related to the receipts of prior year employee tax credits during the three months ended September 30, 2018.

Transaction Costs

Transaction costs for the three months ended ~~September 30, 2018~~March 31, 2019 decreased ~~$62.8~~$1.3 million, or ~~99.7%~~83.5%, to ~~$0.2~~$0.3 million from ~~$62.9~~$1.5 million for the three months ended ~~September 30, 2017 ($1.0 million for the Successor period of September 1, 2017 through September 30, 2017 and $61.9 million for the Predecessor period of July 1, 2017 through August~~March 31, ~~2017).~~2018. The decrease in transaction costs was primarily attributable to a decrease of approximately ~~$62.8~~$1.4 million in ~~transaction and~~ integration costs that were incurred during the three months ended March 31, 2018 related to the Mergers.

Interest Expense

Interest expense for the three months ended ~~September 30, 2018~~March 31, 2019 decreased ~~$9.2~~$5.9 million, or ~~52.1%~~44.9%, to ~~$8.5~~$7.2 million from ~~$17.7~~$13.1 million for the three months ended ~~September 30, 2017 ($4.8 million for the Successor period of September 1, 2017 through September 30, 2017 and $12.9 million for the Predecessor period of July 1, 2017 through August~~March 31, ~~2017).~~2018. The decrease in interest expense was due to a lower average debt balance during the three months ended ~~September 30, 2018.~~March 31, 2019. The lower average debt balance was a result of the redemption of the senior secured notes in March 2018, the early payoff of a mortgage loan ~~that was~~which encumbered by a hotel property that was sold ~~during~~in July 2018, the repayment of an $85.0 million mortgage loan which encumbered the hotel property owned by our consolidated joint venture in November 2018 and scheduled mortgage loans principal payments.

Related Party Interest Expense

During the three months ended ~~September 30,~~March 31, 2019, we recognized related party interest expense of $1.2 million. In November 2018, ~~and~~our consolidated joint venture entered into an $85.0 million related party mortgage loan ~~principal payments. In addition,~~with RLJ LP. The hotel property owned by our consolidated joint venture is encumbered by the ~~decrease in interest expense was the result of the amortization of fair value adjustments on the Senior Notes and the~~related party mortgage ~~loans that were recognized at fair value in the Mergers on August 31, 2017, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.~~loan.

~~Loss~~Gain on Extinguishment of Indebtedness

During the three months ended September 30, 2018, the Company recognized a loss on extinguishment of indebtedness of approximately $1.7 million, which was due to the early payoff of a mortgage loan that was encumbered by a hotel property that was sold during the three months ended September 30, 2018. During the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized a $3.3 million loss on extinguishment of indebtedness as a result of writing off the unamortized deferred financing costs in connection with the termination of the Company's line of credit agreement.

~~Comparison of the nine months ended September 30, 2018 to the Successor period of September 1, 2017 through September 30, 2017 and the Predecessor period of January 1, 2017 through August 31, 2017~~

Successor Predecessor
For the nine months ended September 30,
September 1
through
September 30,

January 1
through
August 31,

2018 2017 2017 $ Change % Change
Revenues
Operating revenues
Room revenue $ —
$ —
$ 425,682
$ (425,682 ) (100.0 )%
Food and beverage revenue —
—
90,572
(90,572 ) (100.0 )%
Related party lease revenue 172,011
20,854
—
151,157
— %
Other revenue —
—
35,261
(35,261 ) (100.0 )%
Total revenues $ 172,011
$ 20,854
$ 551,515
$ (400,358 ) (69.9 )%
Expenses

Operating expenses

Room expense $ —
$ —
$ 112,813
$ (112,813 ) (100.0 )%
Food and beverage expense —
—
71,828
(71,828 ) (100.0 )%
Management and franchise fee expense —
—
19,901
(19,901 ) (100.0 )%
Other operating expense —
—
147,827
(147,827 ) (100.0 )%
Total property operating expenses —
—
352,369
(352,369 ) (100.0 )%
Depreciation and amortization 60,496
5,974
73,065
(18,543 ) (23.5 )%
Impairment loss —
—
35,109
(35,109 ) (100.0 )%
Property tax, insurance and other 42,834
4,449
44,278
(5,893 ) (12.1 )%
General and administrative 595
192
16,006
(15,603 ) (96.3 )%
Transaction costs 2,369
1,039
68,248
(66,918 ) (96.6 )%
Total operating expenses 106,294
11,654
589,075
(494,435 ) (82.3 )%
Operating income (loss) 65,717
9,200
(37,560 ) 94,077
— %
Other income 111
—
100
11
11.0 %
Interest income 153
3
126
24
18.6 %
Interest expense (30,221 ) (4,779 ) (51,690 ) 26,248
(46.5 )%
Gain (loss) on sale of hotel properties, net 14,930
—
(1,764 ) 16,694
— %
Gain (loss) on extinguishment of indebtedness, net 11,280
—
(3,278 ) 14,558
— %
Income (loss) before equity in income from unconsolidated joint ventures 61,970
4,424
(94,066 ) 151,612
— %
Equity in income from unconsolidated joint ventures 945
115
1,074
(244 ) (20.5 )%
Income (loss) before income tax expense 62,915
4,539
(92,992 ) 151,368
— %
Income tax expense —
—
(499 ) 499
(100.0 )%
Income (loss) from continuing operations 62,915
4,539
(93,491 ) 151,867
— %
Loss from discontinued operations —
—
(3,415 ) 3,415
(100.0 )%
Net income (loss) and comprehensive income (loss) 62,915
4,539
(96,906 ) 155,282
— %
Net (income) loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures (18 ) (51 ) 545
(512 ) — %
Noncontrolling interest in FelCor LP (618 ) (45 ) 495
(1,068 ) — %
Preferred distributions - consolidated joint venture (1,109 ) (122 ) (979 ) (8 ) 0.7 %
Net income (loss) and comprehensive income (loss) attributable to Rangers 61,170
4,321
(96,845 ) 153,694
— %

Preferred dividends —
—
(16,744 ) 16,744
(100.0 )%
Net income (loss) and comprehensive income (loss) attributable to ownership interests/common shareholders $ 61,170
$ 4,321
$ (113,589 ) $ 170,438
— %

~~Revenues~~

Total revenues for the nine months ended September 30, 2018 decreased $400.4 million, or 69.9%, to $172.0 million from $572.4 million for the nine months ended September 30, 2017 ($20.9 million for the Successor period of September 1, 2017 through September 30, 2017 and $551.5 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease was the result of a $425.7 million decrease in room revenue, a $90.6 million decrease in food and beverage revenue, and a $35.3 million decrease in other revenue, partially offset by a $151.2 million increase in related party lease revenue.

~~Room Revenue~~

Room revenue for the nine months ended September 30, 2018 decreased $425.7 million, or 100.0%, from the nine months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Food and Beverage Revenue~~

Food and beverage revenue for the nine months ended September 30, 2018 decreased $90.6 million, or 100.0%, from the nine months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Related Party Lease Revenue~~

Related party lease revenue for the nine months ended September 30, 2018 increased $151.2 million to $172.0 million from $20.9 million for the nine months ended September 30, 2017 ($20.9 million for the Successor period of September 1, 2017 through September 30, 2017 and $0.0 million for the Predecessor period of January 1, 2017 through August 31, 2017). The recognition of related party lease revenue in the Successor period as compared to the Predecessor period is the result of the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Other Revenue~~

Other revenue, which includes revenue derived from ancillary sources such as parking fees, golf, pool, and other resort fees, gift shop sales and other guest service fees, for the nine months ended September 30, 2018 decreased $35.3 million, or 100.0%, from the nine months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Property Operating Expenses~~

Property operating expenses for the nine months ended September 30, 2018 decreased $352.4 million, or 100.0%, from the nine months ended September 30, 2017. The decrease was the result of the Mergers on August 31, 2017 and the Company distributing its equity interests in FelCor TRS to RLJ LP immediately after the consummation of the Mergers, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Depreciation and Amortization~~

Depreciation and amortization expense for the nine months ended September 30, 2018 decreased $18.5 million, or 23.5%, to $60.5 million from $79.0 million for the nine months ended September 30, 2017 ($6.0 million for the Successor period of September 1, 2017 through September 30, 2017 and $73.1 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease was primarily the result of a $13.4 million decrease in depreciation and amortization expense associated with the hotel properties that were sold during the comparative period and a $5.1 million decrease in depreciation and amortization expense as a result of the pushdown accounting for the new basis of accounting established by RLJ for the assets acquired in the Mergers.

~~Impairment Loss~~

During the Predecessor period of January 1, 2017 through August 31, 2017, the Company recorded a total impairment loss of $35.1 million related to two hotel properties. In March 2017, the Company recorded a $24.8 million impairment loss on one hotel property based on third-party offers to purchase the hotel property and observable market data on transactions involving hotel properties in similar locations. At June 30, 2017, two hotel properties, including the hotel property that was previously impaired in March 2017, were classified as held for sale on the consolidated balance sheet. The Company recorded an additional impairment loss of $10.3 million on these two hotel properties in order to reflect the contractual sale prices, less the estimated costs to sell.

~~Property Tax, Insurance and Other~~

Property tax, insurance and other expense for the nine months ended September 30, 2018 decreased $5.9 million, or 12.1%, to $42.8 million from $48.7 million for the nine months ended September 30, 2017 ($4.4 million for the Successor period of September 1, 2017 through September 30, 2017 and $44.3 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease was primarily the result of a decrease in property tax, insurance and other expense associated with hotel properties that were sold during the comparative period, partially offset by an increase in property tax expense as a result of property tax reassessments in certain jurisdictions as a result of the Merger with RLJ.

~~General and Administrative~~

General and administrative expense for the nine months ended September 30, 2018 decreased $15.6 million, or 96.3%, to $0.6 million from $16.2 million for the nine months ended September 30, 2017 ($0.2 million for the Successor period of September 1, 2017 through September 30, 2017 and $16.0 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease in general and administrative expense was primarily attributable to the Mergers on August 31, 2017, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ. The Merger with RLJ resulted in a decrease in compensation expense and a decrease in other general and administrative expenses. The decrease in general and administrative expense was also attributable to a decrease of $0.9 million related to the receipts of prior year employee tax credits during the nine months ended September 30, 2018.

~~Transaction Costs~~

Transaction costs for the nine months ended September 30, 2018 decreased $66.9 million, or 96.6%, to $2.4 million from $69.2 million for the nine months ended September 30, 2017 ($1.0 million for the Successor period of September 1, 2017 through September 30, 2017 and $68.2 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease in transaction costs was primarily attributable to a decrease of approximately $67.4 million in transaction and integration costs related to the Mergers.

~~Interest Expense~~

Interest expense for the nine months ended September 30, 2018 decreased $26.2 million, or 46.5%, to $30.2 million from $56.5 million for the nine months ended September 30, 2017 ($4.8 million for the Successor period of September 1, 2017 through September 30, 2017 and $51.7 million for the Predecessor period of January 1, 2017 through August 31, 2017). The decrease in interest expense was due to a lower average debt balance during the nine months ended September 30, 2018. The lower average debt balance was a result of the redemption of the senior secured notes in March 2018, the early payoff of a mortgage loan that was encumbered by a hotel property that was sold during the nine months ended September 30, 2018, and mortgage loan principal payments. In addition, the decrease in interest expense was the result of the amortization of fair value adjustments on the Senior Notes and the mortgage loans that were recognized at fair value in the Mergers on August 31, 2017, as noted in Note 3 to our accompanying consolidated financial statements, Merger with RLJ.

~~Gain (Loss) on Extinguishment of Indebtedness, net~~

~~During the nine months ended September 30, 2018, the Company recognized a net gain on extinguishment of indebtedness of approximately $11.3 million.~~ In March 2018, ~~the Company~~we recognized a $12.9 million gain on extinguishment of indebtedness, which was due to the early redemption of the senior secured notes. ~~In July 2018, the Company recognized a $1.7 million~~There was no gain or loss on extinguishment of indebtedness ~~which was due to the early payoff of a mortgage loan that was encumbered by a hotel property that was sold~~ during the ~~nine~~three months ended ~~September 30, 2018. During the Predecessor period of January 1, 2017 through August~~March 31, 2017, the Company recognized a $3.3 million loss on extinguishment of indebtedness as a result of writing off the unamortized deferred financing costs in connection with the termination of the Company's line of credit agreement.2019.

Liquidity and Capital Resources

Our short-term liquidity requirements consist primarily of the funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:

recurring maintenance and capital expenditures necessary to maintain our hotel properties in accordance with brand standards; ~~and~~

interest expense and scheduled principal payments on outstanding ~~indebtedness.~~indebtedness; and

corporate and other general and administrative expenses.

We expect to meet our short-term liquidity requirements generally through the net cash provided by operations, existing cash balances, and proceeds from the sale of hotel properties.

Our long-term liquidity requirements consist primarily of the funds necessary to pay for the costs of redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties, and scheduled debt payments, at maturity or otherwise. We expect to meet our long-term liquidity requirements through various sources of capital, including existing working capital, the net cash provided by operations, long-term mortgage loans

and other secured and unsecured borrowings, the proceeds from the sale of hotel properties, and if necessary, related party borrowings ~~under~~from RLJ that would be funded from RLJ's revolving credit facility.

Sources and Uses of Cash

As of ~~September 30, 2018,~~March 31, 2019, we had ~~$21.0~~$17.4 million of cash, cash equivalents and restricted cash reserves as compared to ~~$18.0~~$24.6 million at December 31, ~~2017.~~2018.

Cash flows from Operating Activities

The net cash flow provided by operating activities totaled ~~$133.2~~$25.2 million and $49.3 million for the ~~nine~~three months ended September 30, 2018. The net cash flow used in operating activities totaled $11.2 million for the Successor period of September 1, 2017 through September 30, 2017. The net cash flow provided by operating activities totaled $99.3 million for the Predecessor period of January 1, 2017 through AugustMarch 31, ~~2017.~~

2019 and 2018, respectively. Our cash flows provided by operating activities generally consist of the cash received from the hotel property lease agreements between the Lessors and the Lessees, which is partially offset by the cash paid for corporate expenses and other working capital changes. For the Predecessor period, our cash flows provided by operating activities generally consisted of the net cash generated by our hotel operations, partially offset by the cash paid for corporate expenses and other working capital changes.

Refer to the "Results of Operations" section for further discussion of our operating results for the ~~nine~~three months ended ~~September 30, 2018, the Successor period of September 1, 2017 through September 30, 2017,~~March 31, 2019 and ~~the Predecessor period of January 1, 2017 through August 31, 2017.~~2018.

Cash flows from Investing Activities

The net cash flow provided by investing activities totaled $376.1 million for the nine months ended September 30, 2018 primarily due to $434.4 million of net cash proceeds from the sale of hotel properties, partially offset by $58.2 million in routine capital improvements and additions to our hotel properties.

~~The net cash flow~~ used in investing activities totaled ~~$0.1~~$13.6 million for the ~~Successor period of September 1, 2017 through September 30, 2017~~three months ended March 31, 2019 primarily due to $13.0 million in routine capital improvements and additions to our hotel properties.

The net cash flow provided by investing activities totaled ~~$10.5~~$98.5 million for the ~~Predecessor period of January 1, 2017 through August~~three months ended March 31, ~~2017~~2018 primarily due to ~~$73.4~~$116.6 million of net cash proceeds from the sale of two hotel ~~properties. The net cash flow provided by investing activities was~~properties, partially offset by ~~$63.8~~$18.1 million in routine capital improvements and additions to our hotel properties.

Cash flows from Financing Activities

The net cash flow used in financing activities totaled ~~$506.4~~$18.7 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 primarily due to ~~a payment of approximately $539.0 million to redeem the senior secured notes, $610.1~~$48.3 million in distributions to members, ~~$28.1~~a payment of $45.6 million to ~~payoff~~redeem the preferred equity in a ~~mortgage loan that was encumbered by a hotel property that was sold,~~consolidated joint venture, and ~~$2.1~~$0.6 million in scheduled mortgage loans principal payments. The net cash flow used in financing activities was partially offset by ~~$673.9~~$73.8 million in contributions from ~~members.~~members and $2.3 million in contributions from joint venture partners.

The net cash flow used in financing activities totaled ~~$36.0~~$148.1 million for the ~~Successor period of September 1, 2017 through September 30, 2017~~three months ended March 31, 2018 primarily due to a payment of approximately $539.0 million to early redeem the ~~$51.9 million distribution of the equity interests in FelCor TRS to RLJ LP~~senior secured notes and ~~$19.1~~$206.2 million in distributions to ~~members, partially offset by $35.5 million in contributions from~~ members.

The net cash flow used in financing activities totaled $112.2 million for the Predecessor period of January 1, 2017 through August 31, 2017 primarily due to $121.7 million in repayments on debt borrowings, $49.8 million in distributions to common and preferred stockholders, and $6.4 million paid to repurchase common shares to satisfy employee withholding requirements. The net cash flow used in financing activities was partially offset by ~~$66.0~~$598.0 million in ~~additional debt borrowings under the line of credit.~~contributions from members.

Capital Expenditures and Reserve Funds

We maintain each of our hotel properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements. Generally, the cost of routine improvements and alterations are paid out of ~~furniture, fixtures and equipment ("~~FF~~&E")~~&E reserves, which are funded by a portion of each hotel property’s gross revenues. Routine capital expenditures are administered by us with the assistance of the property management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our hotel properties.

From time to time, certain of our hotel properties may undergo renovations as a result of our decision to upgrade portions of the hotels, such as guestrooms, public space, meeting space, and/or restaurants, in order to better compete with other hotels and alternative lodging options in our markets. In addition, upon acquisition of a hotel we often are required to complete a property improvement plan in order to bring the hotel up to the respective franchisor’s standards. If permitted by the terms of the management agreement, funding for a renovation will first come from the FF&E reserves. To the extent that the FF&E reserves are not available or sufficient to cover the cost of the renovation, we will fund all or the remaining portion of the renovation with cash and cash equivalents on hand and/or other sources of available liquidity.

With respect to some of our hotel properties that are operated under franchise agreements with major national hotel brands and for some of our hotel properties subject to first mortgage liens, we are obligated to maintain FF&E reserve accounts for future capital expenditures at these hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective

hotels, and typically ranges between 4.0% and 5.0% of the respective hotel’s total gross revenue. As of ~~September 30, 2018~~March 31, 2019, approximately $0.9 million was held in FF&E reserve accounts for future capital expenditures.

Off-Balance Sheet Arrangements

As of ~~September 30, 2018~~March 31, 2019, we owned 50% interests in joint ventures that owned two hotel properties. RLJ LP owns more than 50% of the operating lessee for one of these hotels and the other hotel is operated without a lease. None of our officers or employees holds an ownership interest in any of these joint ventures or entities.

One of the 50% unconsolidated joint ventures that owns a hotel property has ~~$21.1~~$20.8 million of non-recourse mortgage debt, of which our pro rata portion was ~~$10.6~~$10.4 million, none of which is reflected as a liability on our consolidated balance sheet. Our liabilities with regard to the non-recourse debt and the liabilities of our subsidiaries that are members or partners in joint ventures are generally limited to guaranties of the borrowing entity’s obligations to pay for the lender’s losses caused by misconduct, fraud or misappropriation of funds by the venture and other typical exceptions from the non-recourse provisions in the mortgages, such as for environmental liabilities. In addition, this joint venture is subject to two ground leases with terms expiring in ~~2044.~~2044 and 2094.

The other 50% unconsolidated joint venture that owns a hotel property is subject to a ground lease with an initial term expiring in 2021. After the initial term, the joint venture may extend the ground lease for an additional term of 10 years to 2031.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes the risks that arise from changes in interest rates, equity prices and other market changes that affect market sensitive instruments. Our primary market risk exposure is to changes in interest rates on our variable rate debt. As of ~~September 30, 2018~~March 31, 2019, we had approximately $85.0 million of total variable rate related party debt outstanding (or 12.5% of total indebtedness) with a weighted-average interest rate of ~~5.26%~~5.49% per annum. As of ~~September 30, 2018~~March 31, 2019, if market interest rates on our variable rate debt were to increase by 1.00%, or 100 basis points, interest expense would decrease future earnings and cash flows by approximately $0.9 million annually.

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable. From time to time, we may enter into derivative financial instruments such as interest rate swaps to mitigate our interest rate risk or to effectively lock the interest rate on a portion of our variable rate debt. We do not enter into derivative or interest rate transactions for speculative purposes.

The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations outstanding as of ~~September 30, 2018~~March 31, 2019, the following table presents the principal repayments and related weighted-average interest rates by contractual maturity dates (in thousands):


	2018			2019			2020			2021			2022			Thereafter			Total			2019			2020			2021			2022			2023			Thereafter			Total
Fixed rate debt (1)	$	411		$	2,556		$	2,670		$	2,824		$	110,997		$	475,000		$	594,458		$	1,707		$	2,671		$	2,824		$	110,997		$	—		$	475,000		$	593,199
Weighted-average interest rate	4.95		%	4.95		%	4.95		%	4.95		%	4.95		%	6.00		%	5.79		%	4.95		%	4.95		%	4.95		%	4.95		%	—		%	6.00		%	5.79		%
Variable rate debt (1) (2)	$	85,000		$	—		$	—		$	—		$	—		$	—		$	85,000
Weighted-average interest rate (3)	5.26		%	—		%	—		%	—		%	—		%	—		%	5.26		%
Variable rate debt - related party debt																						$	—		$	—		$	—		$	—		$	85,000		$	—		$	85,000
Weighted-average interest rate																						—		%	—		%	—		%	—		%	5.49		%	—		%	5.49		%
Total	$	85,411		$	2,556		$	2,670		$	2,824		$	110,997		$	475,000		$	679,458		$	1,707		$	2,671		$	2,824		$	110,997		$	85,000		$	475,000		$	678,199


(1)	Excludes ~~$34.2~~a total of $31.4 million related to fair value adjustments on the debt that RLJ pushed down to our consolidated financial statements as a result of the Mergers.


~~(2)~~	~~Excludes $24,000 of net deferred financing costs on a mortgage loan.~~


~~(3)~~	~~The weighted-average interest rate considers the implied forward rates in the yield curve at September 30, 2018.~~

Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during future periods, prevailing interest rates and our hedging strategies at that time.

Changes in market interest rates on our fixed rate debt impact the fair value of our debt, but such changes have no impact to our consolidated financial statements. As of ~~September 30, 2018~~March 31, 2019, the estimated fair value of our fixed rate debt was ~~$624.7~~$615.7 million, which is based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates. If interest rates were to rise by 1.00%, or 100 basis points, and our fixed rate debt balance remains constant, we expect the fair value of our debt to decrease by approximately ~~$31.6~~$29.0 million.

Item 4. Controls and Procedures.

Rangers

Evaluation of Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Rangers' management, under the supervision and participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, Rangers' Chief Executive Officer and Chief Financial Officer concluded that Rangers' disclosure controls and procedures were effective as of ~~September 30, 2018~~March 31, 2019.

Changes in Internal Control over Financial Reporting

There have been no changes in Rangers' internal control over financial reporting (as defined in Rule 13a-15 and 15d-15 of the Exchange Act) during the period ended ~~September 30, 2018~~March 31, 2019 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

FelCor LP

Evaluation of Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Exchange Act, the management of Rangers GP, the sole general partner of FelCor LP, under the supervision and participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, Rangers GP's Chief Executive Officer and Chief Financial Officer concluded that FelCor LP's disclosure controls and procedures were effective as of ~~September 30, 2018.~~March 31, 2019.

Changes in Internal Control over Financial Reporting

There have been no changes in FelCor LP's internal control over financial reporting (as defined in Rule 13a-15 and 15d-15 of the Exchange Act) during the period ended ~~September 30, 2018~~March 31, 2019 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The nature of the operations of our hotel properties exposes our hotel properties and the Company to the risk of claims and litigation in the normal course of their business. Other than routine litigation arising out of the ordinary course of business and the pension trust litigation matter noted in Note 9, Commitments and Contingencies, the Company is not presently subject to any material litigation nor, to the Company's knowledge, is any material litigation threatened against the Company.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, please refer to the "Risk Factors" section in the Annual Report which is accessible on the SEC’s website at www.sec.gov. There have been no material changes to the risk factors previously disclosed in the Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits required to be filed by Item 601 of Regulation S-K are noted below:

Exhibit Index



Exhibit Number	Description of Exhibit

3.1	Third Amended and Restated Agreement of Limited Partnership of FelCor Limited Partnership, dated as of August 31, 2017 (incorporated by reference to Exhibit 3.1 to FelCor LP’s Current Report on Form 8-K filed on September 1, 2017)
3.2	Certificate of Amendment to the Certificate of Limited Partnership of FelCor Limited Partnership, dated September 1, 2017 (incorporated by reference to Exhibit 3.2 to FelCor LP’s Current Report on Form 8-K filed on September 1, 2017)
3.3	Articles of Organization of Rangers Sub I, LLC (incorporated by reference to Exhibit 3.1 to Rangers’ and FelCor LP’s Current Report on Form 8-K filed on September 7, 2017)
3.4	Operating Agreement of Rangers Sub I, LLC dated April 20, 2017 (incorporated by reference to Exhibit 3.2 to Rangers’ and FelCor LP’s Current Report on Form 8-K filed on September 7, 2017)
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Rangers.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Rangers.
31.3*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
31.4*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Rangers.
32.2*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for FelCor LP.
101.INS	XBRL Instance Document	Submitted electronically with this report
101.SCH	XBRL Taxonomy Extension Schema Document	Submitted electronically with this report
101.CAL	XBRL Taxonomy Calculation Linkbase Document	Submitted electronically with this report
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Submitted electronically with this report
101.LAB	XBRL Taxonomy Label Linkbase Document	Submitted electronically with this report
101.PRE	XBRL Taxonomy Presentation Linkbase Document	Submitted electronically with this report

*Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	RANGERS SUB I, LLC

Dated: ~~November 7, 2018~~May 9, 2019	/s/ LESLIE D. HALE
	Leslie D. Hale
	President and Chief Executive Officer


Dated: ~~November 7, 2018~~May 9, 2019	/s/ SEAN M. MAHONEY
	Sean M. Mahoney
	Executive Vice President and Chief Financial Officer ~~and Treasurer~~
	(Principal Financial Officer)


Dated: ~~November 7, 2018~~May 9, 2019	/s/ CHRISTOPHER A. GORMSEN
	Christopher A. Gormsen
	Senior Vice President and Chief Accounting Officer
	(Principal Accounting Officer)



	FELCOR LODGING LIMITED PARTNERSHIP
	By: Rangers General Partner, LLC, its General Partner

Dated: ~~November 7, 2018~~May 9, 2019	/s/ LESLIE D. HALE
	Leslie D. Hale
	President and Chief Executive Officer


Dated: ~~November 7, 2018~~May 9, 2019	/s/ SEAN M. MAHONEY
	Sean M. Mahoney
	Executive Vice President and Chief Financial Officer ~~and Treasurer~~
	(Principal Financial Officer)


Dated: ~~November 7, 2018~~May 9, 2019	/s/ CHRISTOPHER A. GORMSEN
	Christopher A. Gormsen
	Senior Vice President and Chief Accounting Officer
	(Principal Accounting Officer)

5737



	Shareholders’ Equity														Noncontrolling Interest
	Preferred Stock			Common Stock
	Shares	Amount		Shares		Par Value			Additional Paid-in Capital			Accumulated Deficit			Consolidated Joint Ventures			Preferred Equity in a Consolidated Joint Venture			Total Equity
Predecessor - Balance at December 31, 2016	12,879,475	$	309,337	137,990,097		$	1,380		$	2,576,988		$	(2,706,408	)	$	7,503		$	43,783		$	232,583
Net income (loss) and comprehensive income (loss)	—	—		—		—			—			(96,845		)	(545		)	979			(96,411		)
Issuance of stock awards	—	—		1,998,497		20			839			—			—			—			859
Amortization of share-based compensation	—	—		—		—			11,946			—			—			—			11,946
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock	—	—		(893,309	)	(9		)	—			(6,425		)	—			—			(6,434		)
Allocation to the redeemable noncontrolling interests in FelCor LP	—	—		—		—			(196		)	—			—			—			(196		)
Contribution from the noncontrolling interests	—	—		—		—			—			—			333			—			333
Distribution to noncontrolling interests	—	—		—		—			—			—			(150		)	—			(150		)
Distributions on Series A preferred shares	—	—		—		—			—			(16,744		)	—			—			(16,744		)
Distributions on common shares and units	—	—		—		—			—			(22,468		)	—			—			(22,468		)
Preferred distributions - consolidated joint venture	—	—		—		—			—			—			—			(979		)	(979		)
Issuance of preferred equity in a consolidated joint venture	—	—		—		—			—			—			—			647			647
Predecessor - Balance at August 31, 2017	12,879,475	$	309,337	139,095,285		$	1,391		$	2,589,577		$	(2,848,890	)	$	7,141		$	44,430		$	102,986



Loss from discontinued operations	—			—			(3,415		)	—			—			(3,415		)
Net income (loss) and comprehensive income (loss)	39,362			4,539			(59,305		)	62,915			4,539			(96,906		)
Net (income) loss attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	(52		)	(51		)	108			(18		)	(51		)	545
Preferred distributions - consolidated joint venture	(374		)	(122		)	(252		)	(1,109		)	(122		)	(979		)
Net income (loss) and comprehensive income (loss) attributable to FelCor LP	38,936			4,366			(59,449		)	61,788			4,366			(97,340		)
Preferred distributions	—			—			(4,186		)	—			—			(16,744		)
Net income (loss) and comprehensive income (loss) attributable to FelCor LP partners and common unitholders	$	38,936		$	4,366		$	(63,635	)	$	61,788		$	4,366		$	(114,084	)

Basic and diluted per common unit data:
Loss from continuing operations per unit attributable to common unitholders							$	(0.43	)							$	(0.80	)
Net loss per unit attributable to common unitholders							$	(0.46	)							$	(0.83	)
Weighted-average number of common units							138,514,851									137,941,926



	Partners’ Capital					Noncontrolling Interest
	Preferred Units		Common Units			Consolidated Joint Ventures			Preferred Capital in a Consolidated Joint Venture			Total Partners' Capital
Predecessor - Balance at December 31, 2016	$	309,337	$	(128,040	)	$	7,503		$	43,783		$	232,583
Net income (loss) and comprehensive income (loss)	—		(97,340		)	(545		)	979			(96,906		)
Issuance of FelCor restricted stock	—		859			—			—			859
Amortization of FelCor share-based compensation	—		11,946			—			—			11,946
Shares acquired to satisfy minimum required federal and state tax withholding on vesting FelCor restricted stock	—		(6,434		)	—			—			(6,434		)
Allocation to the redeemable units in the Operating Partnership	—		433			—			—			433
Contribution from the noncontrolling interests	—		—			333			—			333
Distribution to noncontrolling interests	—		—			(150		)	—			(150		)
Distributions on preferred units	—		(16,744		)	—			—			(16,744		)
Distributions on common units	—		(22,602		)	—			—			(22,602		)
Preferred distributions - consolidated joint venture	—		—			—			(979		)	(979		)
Issuance of preferred capital in a consolidated joint venture	—		—			—			647			647
Predecessor - Balance at August 31, 2017	$	309,337	$	(257,922	)	$	7,141		$	44,430		$	102,986



	August 31, 2017
	New Basis Before FelCor TRS Distribution			FelCor TRS Distribution			New Basis After FelCor TRS Distribution
Investment in hotel properties	$	2,661,114		$	(2,000	)	$	2,659,114
Investment in unconsolidated joint ventures	25,651			(7,900		)	17,751
Cash and cash equivalents	47,396			(40,878		)	6,518
Restricted cash reserves	17,038			(10,989		)	6,049
Hotel and other receivables	28,308			(28,308		)	—
Deferred income tax assets	58,170			(58,170		)	—
Intangible assets	139,673			(20,262		)	119,411
Prepaid expenses and other assets	23,811			(11,417		)	12,394
Debt	(1,305,337		)	—			(1,305,337		)
Accounts payable and other liabilities	(118,360		)	52,995			(65,365		)
Advance deposits and deferred revenue	(23,795		)	23,795			—
Accrued interest	(22,612		)	—			(22,612		)
Distributions payable	(4,312		)	—			(4,312		)
Total equity	$	1,526,745		$	(103,134	)	$	1,423,611



			Weighted Average Amortization Period (in Years)
Below market ground leases	$	118,050	54
Advanced bookings	13,862		1
Other intangible assets	7,761		6
Total intangible assets	$	139,673	46



	September 30, 2018
Land and improvements	$	12,203
Buildings and improvements	10,900
Furniture, fixtures and equipment	2,074
Total assets of hotel properties held for sale, net	$	25,177



2018	$	15,712
2019	58,880
2020 (1)	—
2021 (1)	—
2022 (1)	—
Thereafter (1)	—
Total	$	74,592



	Predecessor
	January 1 through August 31
	2017
Balance at beginning of the period	$	4,888
Redemption value allocation	196
Distributions paid to unitholders	(134		)
Net loss	(495		)
Balance at end of the period	$	4,455



	Predecessor
	July 1 through August 31,			January 1 through August 31,
	2017			2017
Numerator:
Net loss attributable to Rangers	$	(59,175	)	$	(96,845	)
Discontinued operations attributable to Rangers	3,400			3,400
Loss from continuing operations attributable to Rangers	(55,775		)	(93,445		)
Less: Preferred dividends	(4,186		)	(16,744		)
Less: Dividends paid on unvested restricted stock	—			(73		)
Numerator for the loss from continuing operations attributable to Rangers common stockholders	(59,961		)	(110,262		)
Numerator for the discontinued operations attributable to Rangers common stockholders	(3,400		)	(3,400		)
Numerator for the loss attributable to Rangers common stockholders excluding amounts attributable to unvested restricted stock	$	(63,361	)	$	(113,662	)

Denominator:
Weighted-average number of common shares - basic	137,904,668			137,331,743
Weighted-average number of common shares - diluted	137,904,668			137,331,743

Basic and diluted loss per share:
Loss from continuing operations	$	(0.43	)	$	(0.80	)
Discontinued operations	$	(0.02	)	$	(0.02	)
Net loss	$	(0.46	)	$	(0.83	)



Preferred dividends	—		—		(16,744		)	16,744		(100.0	)%
Net income (loss) and comprehensive income (loss) attributable to ownership interests/common shareholders	$	61,170	$	4,321	$	(113,589	)	$	170,438	—	%