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, 2019

OR

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)

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.

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 

As of November 8, 2019, RLJ Lodging Trust, L.P. owns 100% of the percentage interests of Rangers Sub I, LLC. As of November 8, 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 or to FelCor LP. Otherwise, we use the terms "we" or "our" to refer to Rangers and FelCor LP, collectively (including their consolidated subsidiaries).

This quarterly report on Form 10-Q for the quarter ended September 30, 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.

i

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	2
	Statements of Changes in Equity	3
	Statements of Cash Flows	5
	FelCor Lodging Limited Partnership
	Consolidated Financial Statements (unaudited)
	Balance Sheets	6
	Statements of Operations and Comprehensive Income	7
	Statements of Partners' Capital	8
	Statements of Cash Flows	10
	Notes to the Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

ii

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

Rangers Sub I, LLC

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)

	September 30, 2019		December 31, 2018
Assets
Investment in hotel properties, net	$	1,943,846	$	2,123,423
Investment in unconsolidated joint ventures	15,590		15,716
Cash and cash equivalents	12,695		21,351
Restricted cash reserves	6,056		3,211
Related party rent receivable	71,380		16,501
Lease right-of-use assets	81,714		—
Intangible assets, net	—		46,260
Prepaid expense and other assets	4,926		6,552
Related party prepaid interest	—		180
Total assets	$	2,136,207	$	2,233,194
Liabilities and Equity
Debt, net	$	715,777	$	626,628
Related party debt	85,000		85,000
Accounts payable and other liabilities	34,787		43,389
Related party lease termination fee payable	712		—
Lease liabilities	48,587		—
Accrued interest	9,588		2,463
Related party accrued interest	190		—
Distributions payable	—		126
Total liabilities	894,641		757,606
Commitments and Contingencies (Note 9)
Equity
Member's equity:
Member's equity	1,127,837		1,334,154
Retained earnings	92,980		76,695
Total member's equity	1,220,817		1,410,849
Noncontrolling interest:
Noncontrolling interest in consolidated joint ventures	8,418		6,059
Noncontrolling interest in FelCor LP	12,331		14,250
Total noncontrolling interest	20,749		20,309
Preferred equity in a consolidated joint venture, liquidation value of $45,544 at December 31, 2018	—		44,430
Total equity	1,241,566		1,475,588
Total liabilities and equity	$	2,136,207	$	2,233,194

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

1

Rangers Sub I, LLC

Consolidated Statements of Operations and Comprehensive Income

(Amounts in thousands)

(unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Revenues
Operating revenues
Related party lease revenue	$	46,392		$	57,811		$	152,534		$	172,011
Total revenues	46,392			57,811			152,534			172,011
Expenses
Operating expenses
Depreciation and amortization	17,696			19,292			54,284			60,496
Property tax, insurance and other	10,327			13,947			31,416			42,834
General and administrative	278			(564		)	961			595
Transaction costs	105			194			215			2,369
Total operating expenses	28,406			32,869			86,876			106,294
Other income	8			1			59			111
Interest income	79			70			239			153
Interest expense	(8,201		)	(8,467		)	(23,706		)	(30,221		)
Related party interest expense	(1,138		)	—			(3,475		)	—
(Loss) gain on sale of hotel properties, net	(91		)	24,254			(21,474		)	14,930
(Loss) gain on extinguishment of indebtedness, net	—			(1,656		)	—			11,280
Income before equity in income from unconsolidated joint ventures	8,643			39,144			17,301			61,970
Equity in income from unconsolidated joint ventures	30			218			565			945
Net income and comprehensive income	8,673			39,362			17,866			62,915
Net income attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	(82		)	(52		)	(78		)	(18		)
Noncontrolling interest in FelCor LP	(85		)	(389		)	(164		)	(618		)
Preferred distributions - consolidated joint venture	—			(374		)	(186		)	(1,109		)
Redemption of preferred equity - consolidated joint venture	—			—			(1,153		)	—
Net income and comprehensive income attributable to Rangers	$	8,506		$	38,547		$	16,285		$	61,170

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

2

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
Balance at December 31, 2018	$	1,334,154		$	76,695	$	14,250		$	6,059	$	44,430		$	1,475,588
Net income and comprehensive income	—			16,285		164			78		1,339			17,866
Contributions	134,581			—		1,360			—		—			135,941
Distributions	(340,898		)	—		(3,443		)	—		—			(344,341		)
Preferred distributions - consolidated joint venture	—			—		—			—		(186		)	(186		)
Redemption of preferred equity - consolidated joint venture	—			—		—			—		(45,583		)	(45,583		)
Contributions from consolidated joint venture partners	—			—		—			2,281		—			2,281
Balance at September 30, 2019	$	1,127,837		$	92,980	$	12,331		$	8,418	$	—		$	1,241,566

	Member's Equity					Noncontrolling Interest
	Equity			Retained Earnings		FelCor LP			Consolidated Joint  Ventures		Preferred Equity in a Consolidated Joint Venture		Total  Equity
Balance at June 30, 2019	$	1,113,358		$	84,474	$	12,099		$	8,336	$	—	$	1,218,267
Net income and comprehensive income	—			8,506		85			82		—		8,673
Contributions	20,610			—		208			—		—		20,818
Distributions	(6,131		)	—		(61		)	—		—		(6,192		)
Balance at September 30, 2019	$	1,127,837		$	92,980	$	12,331		$	8,418	$	—	$	1,241,566

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

3

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
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
Contributions	667,115			—		6,738			—		—			673,853
Distributions	(605,813		)	—		(6,119		)	—		—			(611,932		)
Preferred distributions - consolidated joint venture	—			—		—			—		(1,109		)	(1,109		)
Balance at September 30, 2018	$	1,364,041		$	65,260	$	14,437		$	5,918	$	44,430		$	1,494,086

	Member's Equity					Noncontrolling Interest
	Equity			Retained Earnings		FelCor LP			Consolidated Joint  Ventures		Preferred Equity in a Consolidated Joint Venture			Total  Equity
Balance at June 30, 2018	$	1,676,815		$	26,713	$	17,208		$	5,866	$	44,430		$	1,771,032
Net income and comprehensive income	—			38,547		389			52		374			39,362
Contributions	31,750			—		320			—		—			32,070
Distributions	(344,524		)	—		(3,480		)	—		—			(348,004		)
Preferred distributions - consolidated joint venture	—			—		—			—		(374		)	(374		)
Balance at September 30, 2018	$	1,364,041		$	65,260	$	14,437		$	5,918	$	44,430		$	1,494,086

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

4

Rangers Sub I, LLC

Consolidated Statements of Cash Flows

(Amounts in thousands)

(unaudited)

	For the nine months ended September 30,
	2019			2018
Cash flows from operating activities
Net income	$	17,866		$	62,915
Adjustments to reconcile net income to cash flow provided by operating activities:
Loss (gain) on sale of hotel properties, net	21,474			(14,930		)
Depreciation and amortization	54,284			60,496
Amortization of deferred financing costs	99			217
Other amortization	(1,950		)	(2,877		)
Equity in income from unconsolidated joint ventures	(565		)	(945		)
Distributions of income from unconsolidated joint ventures	1,295			2,050
Gain on extinguishment of indebtedness, net	—			(11,280		)
Changes in assets and liabilities:
Related party rent receivable	(54,879		)	34,477
Prepaid expense and other assets	1,383			5,723
Related party prepaid interest	180			—
Accounts payable and other liabilities	4,723			68
Accrued interest	7,125			(2,698		)
Related party accrued interest	190			—
Net cash flow provided by operating activities	51,225			133,216
Cash flows from investing activities
Proceeds from the sale of hotel properties, net	145,159			434,361
Improvements and additions to hotel properties	(42,663		)	(58,213		)
Contributions to unconsolidated joint ventures	(603		)	—
Net cash flow provided by investing activities	101,893			376,148
Cash flows from financing activities
Proceeds from borrowings	96,000			—
Repayments of borrowings	(1,925		)	(569,033		)
Contributions from members	135,941			673,853
Distributions to members	(344,341		)	(610,132		)
Payments of deferred financing costs	(990		)	(10		)
Preferred distributions - consolidated joint venture	(312		)	(1,113		)
Redemption of preferred equity - consolidated joint venture	(45,583		)	—
Contributions from consolidated joint venture partners	2,281			—
Net cash flow used in financing activities	(158,929		)	(506,435		)
Net change in cash, cash equivalents, and restricted cash reserves	(5,811		)	2,929
Cash, cash equivalents, and restricted cash reserves, beginning of year	24,562			18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	18,751		$	20,960

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

5

FelCor Lodging Limited Partnership

Consolidated Balance Sheets

(Amounts in thousands)

(unaudited)

	September 30, 2019		December 31, 2018
Assets
Investment in hotel properties, net	$	1,943,846	$	2,123,423
Investment in unconsolidated joint ventures	15,590		15,716
Cash and cash equivalents	12,695		21,351
Restricted cash reserves	6,056		3,211
Related party rent receivable	71,380		16,501
Lease right-of-use assets	81,714		—
Intangible assets, net	—		46,260
Prepaid expense and other assets	4,926		6,552
Related party prepaid interest	—		180
Total assets	$	2,136,207	$	2,233,194
Liabilities and Partners' Capital
Debt, net	$	715,777	$	626,628
Related party debt	85,000		85,000
Accounts payable and other liabilities	34,787		43,389
Related party lease termination fee payable	712		—
Lease liabilities	48,587		—
Accrued interest	9,588		2,463
Related party accrued interest	190		—
Distributions payable	—		126
Total liabilities	894,641		757,606
Commitments and Contingencies (Note 9)
Partners' Capital
Partners’ capital:
Partners' capital	1,139,230		1,347,630
Retained earnings	93,918		77,469
Total partners’ capital, excluding noncontrolling interest	1,233,148		1,425,099
Noncontrolling interest in consolidated joint ventures	8,418		6,059
Preferred capital in a consolidated joint venture, liquidation value of $45,544 at December 31, 2018	—		44,430
Total partners' capital	1,241,566		1,475,588
Total liabilities and partners' capital	$	2,136,207	$	2,233,194

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

6

FelCor Lodging Limited Partnership

Consolidated Statements of Operations and Comprehensive Income

(Amounts in thousands)

(unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Revenues
Operating revenues
Related party lease revenue	$	46,392		$	57,811		$	152,534		$	172,011
Total revenues	46,392			57,811			152,534			172,011
Expenses
Operating expenses
Depreciation and amortization	17,696			19,292			54,284			60,496
Property tax, insurance and other	10,327			13,947			31,416			42,834
General and administrative	278			(564		)	961			595
Transaction costs	105			194			215			2,369
Total operating expenses	28,406			32,869			86,876			106,294
Other income	8			1			59			111
Interest income	79			70			239			153
Interest expense	(8,201		)	(8,467		)	(23,706		)	(30,221		)
Related party interest expense	(1,138		)	—			(3,475		)	—
(Loss) gain on sale of hotel properties, net	(91		)	24,254			(21,474		)	14,930
(Loss) gain on extinguishment of indebtedness, net	—			(1,656		)	—			11,280
Income before equity in income from unconsolidated joint ventures	8,643			39,144			17,301			61,970
Equity in income from unconsolidated joint ventures	30			218			565			945
Net income and comprehensive income	8,673			39,362			17,866			62,915
Net income attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	(82		)	(52		)	(78		)	(18		)
Preferred distributions - consolidated joint venture	—			(374		)	(186		)	(1,109		)
Redemption of preferred capital - consolidated joint venture	—			—			(1,153		)	—
Net income and comprehensive income attributable to FelCor LP	$	8,591		$	38,936		$	16,449		$	61,788

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

7

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
Balance at December 31, 2018	$	1,347,630		$	77,469	$	6,059	$	44,430		1,475,588
Net income and comprehensive income	—			16,449		78		1,339			17,866
Contributions	135,941			—		—		—			135,941
Distributions	(344,341		)	—		—		—			(344,341		)
Preferred distributions - consolidated joint venture	—			—		—		(186		)	(186		)
Redemption of preferred equity - consolidated joint venture	—			—		—		(45,583		)	(45,583		)
Contributions from consolidated joint venture partners	—			—		2,281		—			2,281
Balance at September 30, 2019	$	1,139,230		$	93,918	$	8,418	$	—		$	1,241,566

	Partners' Capital					Noncontrolling Interest
	Capital			Retained Earnings		Consolidated Joint  Ventures		Preferred Capital in a Consolidated Joint Venture		Total  Partners' Capital
Balance at June 30, 2019	$	1,124,604		$	85,327	$	8,336	$	—	$	1,218,267
Net income and comprehensive income	—			8,591		82		—		8,673
Contributions	20,818			—		—		—		20,818
Distributions	(6,192		)	—		—		—		(6,192		)
Balance at September 30, 2019	$	1,139,230		$	93,918	$	8,418	$	—	$	1,241,566

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

8

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
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
Contributions	673,853			—		—		—			673,853
Distributions	(611,932		)	—		—		—			(611,932		)
Preferred distributions - consolidated joint venture	—			—		—		(1,109		)	(1,109		)
Balance at September 30, 2018	$	1,377,819		$	65,919	$	5,918	$	44,430		$	1,494,086

	Partners' Capital					Noncontrolling Interest
	Capital			Retained Earnings		Consolidated Joint  Ventures		Preferred Capital in a Consolidated Joint Venture			Total  Partners' Capital
Balance at June 30, 2018	$	1,693,753		$	26,983	$	5,866	$	44,430		$	1,771,032
Net income and comprehensive income	—			38,936		52		374			39,362
Contributions	32,070			—		—		—			32,070
Distributions	(348,004		)	—		—		—			(348,004		)
Preferred distributions - consolidated joint venture	—			—		—		(374		)	(374		)
Balance at September 30, 2018	$	1,377,819		$	65,919	$	5,918	$	44,430		$	1,494,086

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

9

FelCor Lodging Limited Partnership

Consolidated Statements of Cash Flows

(Amounts in thousands)

(unaudited)

	For the nine months ended September 30,
	2019			2018
Cash flows from operating activities
Net income	$	17,866		$	62,915
Adjustments to reconcile net income to cash flow provided by operating activities:
Loss (gain) on sale of hotel properties, net	21,474			(14,930		)
Depreciation and amortization	54,284			60,496
Amortization of deferred financing costs	99			217
Other amortization	(1,950		)	(2,877		)
Equity in income from unconsolidated joint ventures	(565		)	(945		)
Distributions of income from unconsolidated joint ventures	1,295			2,050
Gain on extinguishment of indebtedness, net	—			(11,280		)
Changes in assets and liabilities:
Related party rent receivable	(54,879		)	34,477
Prepaid expense and other assets	1,383			5,723
Related party prepaid interest	180			—
Accounts payable and other liabilities	4,723			68
Accrued interest	7,125			(2,698		)
Related party accrued interest	190			—
Net cash flow provided by operating activities	51,225			133,216
Cash flows from investing activities
Proceeds from the sale of hotel properties, net	145,159			434,361
Improvements and additions to hotel properties	(42,663		)	(58,213		)
Contributions to unconsolidated joint ventures	(603		)	—
Net cash flow provided by investing activities	101,893			376,148
Cash flows from financing activities
Proceeds from borrowings	96,000			—
Repayments of borrowings	(1,925		)	(569,033		)
Contributions from partners	135,941			673,853
Distributions to partners	(344,341		)	(610,132		)
Payments of deferred financing costs	(990		)	(10		)
Preferred distributions - consolidated joint venture	(312		)	(1,113		)
Redemption of preferred capital - consolidated joint venture	(45,583		)	—
Contributions from consolidated joint venture partners	2,281			—
Net cash flow used in financing activities	(158,929		)	(506,435		)
Net change in cash, cash equivalents, and restricted cash reserves	(5,811		)	2,929
Cash, cash equivalents, and restricted cash reserves, beginning of year	24,562			18,031
Cash, cash equivalents, and restricted cash reserves, end of period	$	18,751		$	20,960

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

10

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"). 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, 2019, the Company owned 28 hotel properties with approximately 8,100 rooms, located in 13 states.  The Company, through wholly-owned subsidiaries, owned a 100% interest in 25 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 26 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 27 of its 28 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, 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, 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, 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, 2018, included in the combined Annual Report on Form 10-K of Rangers and FelCor LP filed with the SEC on March 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.

11

Leases

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), which provides the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The Company adopted this standard on January 1, 2019 using the modified retrospective transition 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 date of adoption. The comparative historical periods will be presented in accordance with ASC 840, Leases.

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 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 recognized on a straight-line basis over the lease term. Percentage lease revenue is recognized over the lease term when it is earned and becomes receivable from the Lessees, according to the provisions of the respective lease contracts. The Company only capitalizes the incremental direct costs of leasing, so any indirect costs of leasing will be expensed as incurred. The 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 operating lease or a finance lease based on the principle of whether or not the lease is effectively a financed purchase of the 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 the interest component of each lease payment being recognized as interest expense and the lease right-of-use asset being amortized into amortization expense using the straight-line method over the term of the lease. For leases with an initial term of 12 months or less, the Company will not 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.

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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 a 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 office leases. In addition to recognizing the lease liabilities and the related lease right-of-use assets on the date of adoption, the Company reclassified its below market ground lease 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 following table summarizes the impact of adopting this guidance on the consolidated 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 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 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 Company 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 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.

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3.Investment in Hotel Properties

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

	September 30, 2019			December 31, 2018
Land and improvements	$	500,228		$	532,490
Buildings and improvements	1,448,404			1,555,132
Furniture, fixtures and equipment	127,966			125,207
	2,076,598			2,212,829
Accumulated depreciation	(132,752		)	(89,406		)
Investment in hotel properties, net	$	1,943,846		$	2,123,423

For the three and nine months ended September 30, 2019, the Company recognized depreciation expense related to its investment in hotel properties of approximately $17.6 million and $53.9 million, respectively. For the three and nine months ended September 30, 2018, the Company recognized depreciation expense related to its investment in hotel properties of approximately $19.2 million and $60.0 million, respectively.

4. Investment in Unconsolidated Joint Ventures

As of September 30, 2019 and December 31, 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 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, 2019 and December 31, 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, 2019			December 31, 2018
Equity basis of the joint venture investments	$	(4,097	)	$	(4,810	)
Cost of the joint venture investments in excess of the joint venture book value	19,687			20,526
Investment in unconsolidated joint ventures	$	15,590		$	15,716

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

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Unconsolidated joint ventures net income attributable to the Company	$	310		$	498		$	1,404		$	1,784
Depreciation of cost in excess of book value	(280		)	(280		)	(839		)	(839		)
Equity in income from unconsolidated joint ventures	$	30		$	218		$	565		$	945

5.Sale of Hotel Properties

During the nine months ended September 30, 2019, the Company sold two hotel properties in one transaction for a total sale price of approximately $147.4 million. In connection with this transaction, the Company recorded a $21.4 million loss on sale, which is included in (loss) gain on sale of hotel properties, net in the accompanying consolidated statement of operations and comprehensive income. The loss on sale included approximately $0.7 million in lease termination fees as a result of early termination of the TRS Leases with the lessees at these hotel properties.

The following table discloses the hotel properties that were sold during the nine months ended September 30, 2019:

14

Hotel Property Name	Location	Sale Date	Rooms
Embassy Suites Myrtle Beach - Oceanfront Resort	Myrtle Beach, SC	June 27, 2019	255
Hilton Myrtle Beach Resort	Myrtle Beach, SC	June 27, 2019	385
		Total	640

During the nine months ended September 30, 2018, the Company sold five hotel properties for a total sale price of approximately $441.2 million. In connection with these transactions, the Company recorded an aggregate $14.8 million net gain on sales, which is included in (loss) gain on sale of hotel properties, net in the accompanying consolidated statement of operations and comprehensive income. The gain on sale is net of approximately $9.8 million in lease termination fees as a result of early termination of the TRS Leases with the lessees at these hotel properties.

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

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, 2019			December 31, 2018
Senior Notes (1)(2)(3)	—	6.00%	June 2025		$	501,778		$	505,322
Mortgage loan (4)	3	4.95%	October 2022		89,909			91,737
Mortgage loan (5)	1	4.94%	October 2022		28,981			29,569
Mortgage loan (1) (6)	3	3.62%	April 2024	(7)	96,000			—
	7				716,668			626,628
Deferred financing costs, net					(891		)	—
Debt, net					$	715,777		$	626,628

(1) Requires payments of interest only through maturity.

(2) The Senior Notes (as defined below) include $26.8 million and $30.3 million at September 30, 2019 and December 31, 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) The Company has the option to redeem the Senior Notes beginning June 1, 2020 at a price of 103.0% of face value.

(4) Includes $1.5 million and $1.9 million at September 30, 2019 and December 31, 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.

(5) Includes $0.5 million and $0.6 million at September 30, 2019 and December 31, 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.

(6) The hotels encumbered by the mortgage loan are cross-collateralized.

(7) In April 2019, the Company entered into a new mortgage loan that bears interest at LIBOR + 1.60% and provides twoone year extension options.

The 6.000% Senior Notes due 2025 (the "Senior Notes") and certain mortgage agreements are subject to customary financial covenants. As of September 30, 2019 and December 31, 2018, the Company was in compliance with all financial covenants. On November 1, 2019, the Company launched a tender offer expected to expire on December 4, 2019, for the entire principal amount of the Senior Notes at par.  The Senior Notes were trading at approximately 105% of par at that time.

15

During the three and nine months ended September 30, 2019, the Company recognized $8.2 million and $23.7 million of interest expense, respectively. During the three and nine months ended September 30, 2018, the Company recognized $8.5 million and $30.2 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, 2019, the Company recognized $1.1 million and $3.5 million of interest expense, respectively, related to its related party loan with RLJ LP.

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 $540.6 million and $492.6 million at September 30, 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 $218.4 million and $121.1 million at September 30, 2019 and December 31, 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 $759.0 million and $613.7 million at September 30, 2019 and December 31, 2018, respectively. The total carrying value of the Company's debt was $715.8 million and $626.6 million at September 30, 2019 and December 31, 2018, respectively.

• Related Party Debt — The Company's related party mortgage loan with RLJ LP had an estimated fair value of approximately $87.0 million and $84.1 million at September 30, 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 September 30, 2019 and December 31, 2018.

16

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 (20 hotels), 2022 (five hotels), and thereafter (one hotel).

The lease revenue recognized during the three and nine months ended September 30, 2019 consisted of the following:

	For the three months ended September 30, 2019		For the nine months ended September 30, 2019
Lease revenue relating to lease payments	$	13,745	$	43,050
Lease revenue relating to variable lease payments	32,647		109,484
Total related party lease revenue	$	46,392	$	152,534

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

	September 30, 2019		December 31, 2018
2019	$	13,818	$	58,880
2020 (1)	—		—
2021 (1)	—		—
2022 (1)	—		—
2023 (1)	—		—
Thereafter (1)	—		—
Total	$	13,818	$	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 September 30, 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 September 30, 2019, the total ground lease expense was $2.6 million, which consisted of $1.7 million of fixed lease expense and $1.0 million of variable lease expense. During the nine months ended September 30, 2019, the total ground lease expense was $7.7 million, which consisted of $5.0 million of fixed lease expense and $2.7 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 and $0.6 million for the three and nine months ended September 30, 2019, respectively.

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 and $1.8 million for the three and nine months ended September 30, 2019, respectively.

The Wyndham Boston Beacon Hill is subject to a ground lease with a term expiring in 2028. The ground lease expense was $0.3 million and $0.7 million for the three and nine months ended September 30, 2019, respectively.

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 and $0.4 million for the three and nine months ended September 30, 2019, respectively.

17

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 and $0.5 million for the three and nine months ended September 30, 2019, respectively.

The Wyndham San Diego Bayside is subject to a ground lease with a term expiring in 2029. The ground lease expense was $1.3 million and $3.7 million for three and nine months ended September 30, 2019, respectively.

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

	September 30, 2019			December 31, 2018
2019	$	1,219		$	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	139,989			$	143,633
Imputed interest	(91,402		)
Lease liabilities	$	48,587

The following table presents certain information related to the Company's operating leases as of September 30, 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")) 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, 2019 and December 31, 2018, approximately $6.1 million and $3.2 million, respectively, was available in the restricted cash reserves for future capital expenditures, real estate taxes and insurance.

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, an affiliate of InterContinental Hotels Group PLC ("IHG"), which previously managed three of the Company’s hotels, notified the Company that National Retirement Fund had assessed an employee withdrawal liability of $8.3 million, with required quarterly payments including interest, in connection with the termination of IHG’s management of those hotels. The Company’s management agreements with IHG stated that it may be obligated to indemnify and hold IHG harmless for some or all of any amount ultimately paid to National Retirement Fund with respect to the claim. Based on the current assessment of the claim, resolution of this matter may not occur until 2022. The Company plans to vigorously defend the claim and, if appropriate, IHG’s demand for indemnification.

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10.Equity

Rangers Ownership Interests/FelCor LP Partnership Interests

As of September 30, 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, 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 received a 3.25% annual return, plus a 0.25% non-compounding annual return that was paid upon redemption. The preferred equity raised by the joint venture is included in preferred equity in a consolidated joint venture on the consolidated balance sheets. On February 15, 2019, the Company redeemed the preferred equity in full.

11.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): 

	For the nine months ended September 30,
	2019			2018
Reconciliation of cash, cash equivalents, and restricted cash reserves
Cash and cash equivalents	$	12,695		$	15,735
Restricted cash reserves	6,056			5,225
Cash, cash equivalents, and restricted cash reserves	$	18,751		$	20,960
Interest paid	$	20,518		$	38,069
Interest paid to a related party	$	3,105		$	—
Income taxes refunded	$	—		$	(1,742	)
Operating cash flow lease payments for operating leases	$	6,332
Supplemental investing and financing transactions
In conjunction with the sale of hotel properties, the Company recorded the following:
Sale of hotel properties	$	147,377		$	441,200
Transaction costs	(1,682		)	(7,034		)
Operating prorations	(536		)	195
Proceeds from the sale of hotel properties, net	$	145,159		$	434,361
Supplemental non-cash transactions
Accrued capital expenditures	$	3,662		$	2,566

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.

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

19

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

September 30, 2019

(in thousands)

	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	1,731,751	$	—	$	—	$	(1,731,751	)	$	—
Investment in hotel properties, net	—		565,306		1,378,540		—			1,943,846
Investment in unconsolidated joint ventures	15,590		—		—		—			15,590
Cash and cash equivalents	1,533		—		11,162		—			12,695
Restricted cash reserves	446		—		5,610		—			6,056
Related party rent receivable	—		26,032		45,348		—			71,380
Lease right-of-use assets	4,556		67,525		9,633		—			81,714
Prepaid expense and other assets	2,040		1,126		1,760		—			4,926
Total assets	$	1,755,916	$	659,989	$	1,452,053	$	(1,731,751	)	$	2,136,207
Debt, net	$	501,778	$	24,694	$	222,014	$	(32,709	)	$	715,777
Related party debt	—		—		85,000		—			85,000
Accounts payable and other liabilities	6,642		15,782		12,363		—			34,787
Related party lease termination fee payable	—		344		368		—			712
Lease liabilities	4,760		25,883		17,944		—			48,587
Accrued interest	9,588		—		—		—			9,588
Related party accrued interest	—		—		190		—			190
Total liabilities	522,768		66,703		337,879		(32,709		)	894,641
Partnership interests	1,233,148		593,286		1,105,756		(1,699,042		)	1,233,148
Total partners' capital, excluding noncontrolling interest	1,233,148		593,286		1,105,756		(1,699,042		)	1,233,148
Noncontrolling interest in consolidated joint ventures	—		—		8,418		—			8,418
Total partners’ capital	1,233,148		593,286		1,114,174		(1,699,042		)	1,241,566
Total liabilities and partners’ capital	$	1,755,916	$	659,989	$	1,452,053	$	(1,731,751	)	$	2,136,207

20

FelCor Lodging Limited Partnership

Condensed Consolidating Balance Sheet

December 31, 2018

(in thousands)

	FelCor LP		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
Equity investment in consolidated entities	$	1,913,418	$	—	$	—	$	(1,913,418	)	$	—
Investment in hotel properties, net	—		656,570		1,466,853		—			2,123,423
Investment in unconsolidated joint ventures	15,716		—		—		—			15,716
Cash and cash equivalents	10,778		—		10,573		—			21,351
Restricted cash reserves	441		—		2,770		—			3,211
Related party rent receivable	—		3,666		12,835		—			16,501
Intangible assets, net	—		46,260		—		—			46,260
Prepaid expense and other assets	1,819		1,297		3,436		—			6,552
Related party prepaid interest	—		—		180		—			180
Total assets	$	1,942,172	$	707,793	$	1,496,647	$	(1,913,418	)	$	2,233,194
Debt, net	$	505,322	$	—	$	154,015	$	(32,709	)	$	626,628
Related party debt	—		—		85,000		—			85,000
Accounts payable and other liabilities	9,288		14,376		19,725		—			43,389
Accrued interest	2,463		—		—		—			2,463
Distributions payable	—		—		126		—			126
Total liabilities	517,073		14,376		258,866		(32,709		)	757,606
Partnership interests	1,425,099		693,417		1,187,292		(1,880,709		)	1,425,099
Total partners' capital, excluding noncontrolling interest	1,425,099		693,417		1,187,292		(1,880,709		)	1,425,099
Noncontrolling interest in consolidated joint ventures	—		—		6,059		—			6,059
Preferred capital in a consolidated joint venture	—		—		44,430		—			44,430
Total partners’ capital	1,425,099		693,417		1,237,781		(1,880,709		)	1,475,588
Total liabilities and partners’ capital	$	1,942,172	$	707,793	$	1,496,647	$	(1,913,418	)	$	2,233,194

21

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Three Months Ended September 30, 2019

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	18,374		$	28,018		$	—		$	46,392
Total revenues	—			18,374			28,018			—			46,392
Expenses
Depreciation and amortization	138			6,507			11,051			—			17,696
Property tax, insurance and other	26			4,783			5,518			—			10,327
General and administrative	181			84			13			—			278
Transaction costs	74			—			31			—			105
Total operating expenses	419			11,374			16,613			—			28,406
Other income	—			—			8			—			8
Interest income	205			—			70			(196		)	79
Interest expense	(5,954		)	(245		)	(2,198		)	196			(8,201		)
Related party interest expense	—			—			(1,138		)	—			(1,138		)
Loss on sale of hotel properties, net	—			(29		)	(62		)	—			(91		)
Income before equity in income from unconsolidated joint ventures	(6,168		)	6,726			8,085			—			8,643
Equity in income from consolidated entities	14,729			—			—			(14,729		)	—
Equity in income from unconsolidated joint ventures	30			—			—			—			30
Net income and comprehensive income	8,591			6,726			8,085			(14,729		)	8,673
Noncontrolling interest in consolidated joint ventures	—			—			(82		)	—			(82		)
Net income and comprehensive income attributable to FelCor LP	$	8,591		$	6,726		$	8,003		$	(14,729	)	$	8,591

22

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Three Months Ended September 30, 2018

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	27,360		$	30,451		$	—		$	57,811
Total revenues	—			27,360			30,451			—			57,811
Expenses
Depreciation and amortization	115			8,017			11,160			—			19,292
Property tax, insurance and other	(4		)	7,598			6,353			—			13,947
General and administrative	(491		)	29			(102		)	—			(564		)
Transaction costs	(4		)	261			(63		)	—			194
Total operating expenses	(384		)	15,905			17,348			—			32,869
Other income	1			—			—			—			1
Interest income	285			—			15			(230		)	70
Interest expense	(5,955		)	—			(2,742		)	230			(8,467		)
Gain on sale of hotel properties, net	—			(9,971		)	34,225			—			24,254
Loss on extinguishment of indebtedness	(4		)	—			(1,652		)	—			(1,656		)
Income before equity in income from unconsolidated joint ventures	(5,289		)	1,484			42,949			—			39,144
Equity in income from consolidated entities	44,007			—			—			(44,007		)	—
Equity in income from unconsolidated joint ventures	218			—			—			—			218
Net income and comprehensive income	38,936			1,484			42,949			(44,007		)	39,362
Noncontrolling interest in consolidated joint ventures	—			—			(52		)	—			(52		)
Preferred distributions - consolidated joint venture	—			—			(374		)	—			(374		)
Net income and comprehensive income attributable to FelCor LP	$	38,936		$	1,484		$	42,523		$	(44,007	)	$	38,936

23

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2019

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Revenues
Related party lease revenue	$	—		$	59,320		$	93,214		$	—		$	152,534
Total revenues	—			59,320			93,214			—			152,534
Expenses
Depreciation and amortization	373			20,090			33,821			—			54,284
Property tax, insurance and other	95			14,779			16,542			—			31,416
General and administrative	755			171			35			—			961
Transaction costs	138			—			77			—			215
Total operating expenses	1,361			35,040			50,475			—			86,876
Other income	39			10			10			—			59
Interest income	646			—			178			(585		)	239
Interest expense	(17,842		)	(511		)	(5,938		)	585			(23,706		)
Related party interest expense	—			—			(3,475		)	—			(3,475		)
Loss on sale of hotel properties, net	—			(10,661		)	(10,813		)	—			(21,474		)
Income before equity in income from unconsolidated joint ventures	(18,518		)	13,118			22,701			—			17,301
Equity in income from consolidated entities	34,402			—			—			(34,402		)	—
Equity in income from unconsolidated joint ventures	565			—			—			—			565
Net income and comprehensive income	16,449			13,118			22,701			(34,402		)	17,866
Noncontrolling interest in consolidated joint ventures	—			—			(78		)	—			(78		)
Preferred distributions - consolidated joint venture	—			—			(186		)	—			(186		)
Redemption of preferred capital - consolidated joint venture	—			—			(1,153		)	—			(1,153		)
Net income and comprehensive income attributable to FelCor LP	$	16,449		$	13,118		$	21,284		$	(34,402	)	$	16,449

24

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2018

(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
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

25

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2019

(in thousands)

	FelCor LP			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Operating activities:
Cash flows from operating activities	$	(16,141	)	$	26,326		$	41,040		$	—		$	51,225
Investing activities:
Proceeds from the sale of hotel properties, net	—			82,287			62,872			—			145,159
Improvements and additions to hotel properties	(159		)	(20,023		)	(22,481		)	—			(42,663		)
Contributions to unconsolidated joint ventures	(603		)	—			—			—			(603		)
Intercompany financing	216,063			—			—			(216,063		)	—
Cash flows from investing activities	215,301			62,264			40,391			(216,063		)	101,893
Financing activities:
Proceeds from borrowings	—			25,000			71,000			—			96,000
Repayments of borrowings	—			—			(1,925		)	—			(1,925		)
Contributions from partners	135,941			—			—			—			135,941
Distributions to partners	(344,341		)	—			—			—			(344,341		)
Payments of deferred financing costs	—			(340		)	(650		)	—			(990		)
Preferred distributions - consolidated joint venture	—			—			(312		)	—			(312		)
Redemption of preferred capital - consolidated joint venture	—			—			(45,583		)	—			(45,583		)
Contributions from consolidated joint venture partners	—			—			2,281			—			2,281
Intercompany financing	—			(113,250		)	(102,813		)	216,063			—
Cash flows from financing activities	(208,400		)	(88,590		)	(78,002		)	216,063			(158,929		)
Net change in cash, cash equivalents, and restricted cash reserves	(9,240		)	—			3,429			—			(5,811		)
Cash, cash equivalents, and restricted cash reserves, beginning of year	11,219			—			13,343			—			24,562
Cash, cash equivalents, and restricted cash reserves, end of period	$	1,979		$	—		$	16,772		$	—		$	18,751

26

FelCor Lodging Limited Partnership

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended September 30, 2018

(in thousands)

	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
Investing activities:
Proceeds from the sale of hotel properties, net	—			151,466			282,895			—			434,361
Improvements and additions to hotel properties	(4		)	(21,751		)	(36,458		)	—			(58,213		)
Intercompany financing	515,209			—			—			(515,209		)	—
Cash flows from investing activities	515,205			129,715			246,437			(515,209		)	376,148
Financing activities:
Repayments of borrowings	(538,813		)	—			(30,220		)	—			(569,033		)
Contributions from partners	673,853			—			—			—			673,853
Distributions to partners	(610,132		)	—			—			—			(610,132		)
Payments of deferred financing costs	—			—			(10		)	—			(10		)
Preferred distributions - consolidated joint venture	—			—			(1,113		)	—			(1,113		)
Intercompany financing	—			(196,591		)	(318,618		)	515,209			—
Cash flows from financing activities	(475,092		)	(196,591		)	(349,961		)	515,209			(506,435		)
Net change in cash, cash equivalents, and restricted cash reserves	1,148			—			1,781			—			2,929
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	$	10,785		$	—		$	10,175		$	—		$	20,960

27

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, 2018 of Rangers Sub I, LLC ("Rangers") and FelCor Lodging Limited Partnership ("FelCor LP"), filed with the SEC on March 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" 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 economic growth is showing signs of moderation and geopolitical uncertainty has increased due to trade wars, we remain cautiously optimistic that positive employment trends and high consumer confidence will continue to drive moderate economic expansion in the U.S. and generate positive lodging demand and RevPAR growth for the industry.  As it relates to operating expenses, our industry continues to face cost pressures in a tight labor market.

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.

28

As of September 30, 2019, we owned 28 hotel properties with approximately 8,100 rooms, located in 13 states.  We owned, through wholly-owned subsidiaries, a 100% interest in 25 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 26 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 27 of its 28 hotel properties to subsidiaries of RLJ LP.

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. The following significant activities took place:

• In February 2019, we fully redeemed the preferred equity under the EB-5 Immigrant Investor Program for $45.6 million.

• In April 2019, we entered into a new $96.0 million mortgage loan.

• In June 2019, we sold the Embassy Suites Myrtle Beach - Oceanfront Resort and the Hilton Myrtle Beach Resort in Myrtle Beach, SC for a total sales price of approximately $147.4 million.

Our Customers

Our hotel property-owning subsidiaries (the "Lessors") receive lease revenue from the property-operating subsidiaries (the "Lessees") under 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.

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 lease revenue received under lease 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 on our investment in hotel properties and property taxes, insurance, and other property-related costs of our hotel properties.

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.

29

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, 2018 contains a discussion of our critical accounting policies. There have been no significant changes to our critical accounting policies since December 31, 2018.

Results of Operations

At September 30, 2019 and 2018, we owned 28 and 31 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, 2019 and 2018.  The non-comparable hotel properties include eight dispositions that were completed between January 1, 2018 and September 30, 2019.

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Comparison of the three months ended September 30, 2019 to the three months ended September 30, 2018

	For the three months ended September 30,
	2019			2018			$ Change			% Change
	(amounts in thousands)
Revenues
Operating revenues
Related party lease revenue	$	46,392		$	57,811		$	(11,419	)	(19.8	)%
Total revenues	46,392			57,811			(11,419		)	(19.8	)%
Expenses
Operating expenses
Depreciation and amortization	17,696			19,292			(1,596		)	(8.3	)%
Property tax, insurance and other	10,327			13,947			(3,620		)	(26.0	)%
General and administrative	278			(564		)	842			—	%
Transaction costs	105			194			(89		)	(45.9	)%
Total operating expenses	28,406			32,869			(4,463		)	(13.6	)%
Other income	8			1			7			—	%
Interest income	79			70			9			12.9	%
Interest expense	(8,201		)	(8,467		)	266			(3.1	)%
Related party interest expense	(1,138		)	—			(1,138		)	100.0	%
(Loss) gain on sale of hotel properties, net	(91		)	24,254			(24,345		)	—	%
Loss on extinguishment of indebtedness	—			(1,656		)	1,656			(100.0	)%
Income before equity in income from unconsolidated joint ventures	8,643			39,144			(30,501		)	(77.9	)%
Equity in income from unconsolidated joint ventures	30			218			(188		)	(86.2	)%
Net income and comprehensive income	8,673			39,362			(30,689		)	(78.0	)%
Net income attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	(82		)	(52		)	(30		)	57.7	%
Noncontrolling interest in FelCor LP	(85		)	(389		)	304			(78.1	)%
Preferred distributions - consolidated joint venture	—			(374		)	374			(100.0	)%
Net income and comprehensive income attributable to Rangers	$	8,506		$	38,547		$	(30,041	)	(77.9	)%

Revenues

Related Party Lease Revenue

Related party lease revenue for the three months ended September 30, 2019decreased$11.4 million, or 19.8%, to $46.4 million from $57.8 million for the three months ended September 30, 2018. The decrease was the result of an $11.7 million decrease in related party lease revenue attributable to the non-comparable properties, partially offset by a $0.3 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 higher room revenues, food and beverage revenues and other revenues of the Lessees. The percentage rent amounts are calculated based on a percentage of room revenues, food and beverage revenues and other revenues at the hotel properties.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended September 30, 2019decreased$1.6 million, or 8.3%, to $17.7 million from $19.3 million for the three months ended September 30, 2018. The decrease was the result of a $3.5 million decrease in depreciation and amortization expense attributable to the non-comparable properties, partially offset by a $1.9million increase in depreciation and amortization expense attributable to the comparable properties.

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Property Tax, Insurance and Other

Property tax, insurance and other expense for the three months ended September 30, 2019decreased$3.6 million, or 26.0%, to $10.3 million from $13.9 million for three months ended September 30, 2018. The decrease was primarily attributable to a $3.7 million decrease in property tax, insurance and other expense attributable to the non-comparable properties, partially offset by a $0.1 million increase in property tax, insurance and other expense attributable to the comparable properties

General and Administrative

General and administrative expense for the three months ended September 30, 2019increased$0.8 million to $0.3 million. The increase was primarily attributable to $0.9 million in employee tax credits received during the three months ended September 30, 2018 that we did not receive during the three months ended September 30, 2019.

Transaction Costs

Transaction costs for the three months ended September 30, 2019decreased$0.1 million, or 45.9%, to $0.1 million from $0.2 million for the three months ended September 30, 2018. The decrease in transaction costs was attributable to a decrease of approximately $0.2 million in integration costs that were incurred during three months ended September 30, 2018 related to the Mergers, partially offset by an increase of $0.1 million in other transaction costs.

Interest Expense

Interest expense for the three months ended September 30, 2019decreased$0.3 million, or 3.1%, to $8.2 million from $8.5 million for the three months ended September 30, 2018. The decrease in interest expense was due to the lower average debt balance during the three months ended September 30, 2019. The lower average debt balance was the result of the early payoff of a mortgage loan which encumbered a hotel property that was sold 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. These decreases were partially offset by the increase in interest expense resulting from entering into a new $96.0 million mortgage loan in April 2019.

Related Party Interest Expense

During the three months ended September 30, 2019, we recognized related party interest expense of $1.1 million. In November 2018, our consolidated joint venture entered into an $85.0 million related party mortgage loan with RLJ LP. The hotel property owned by our consolidated joint venture is encumbered by the related party mortgage loan.

Loss on Extinguishment of Indebtedness

During the three months ended September 30, 2018, we recognized a loss on extinguishment of indebtedness of

approximately $1.7 million, which was due to the early payoff of a mortgage loan that encumbered a hotel property sold during the three months ended September 30, 2018. There was no gain or loss on extinguishment of indebtedness during the three months ended September 30, 2019.

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Comparison of the nine months ended September 30, 2019 to the nine months ended September 30, 2018

	For the nine months ended September 30,
	2019			2018			$ Change			% Change
	(amounts in thousands)
Revenues
Operating revenues
Related party lease revenue	$	152,534		$	172,011		$	(19,477	)	(11.3	)%
Total revenues	152,534			172,011			(19,477		)	(11.3	)%
Expenses
Operating expenses
Depreciation and amortization	54,284			60,496			(6,212		)	(10.3	)%
Property tax, insurance and other	31,416			42,834			(11,418		)	(26.7	)%
General and administrative	961			595			366			61.5	%
Transaction costs	215			2,369			(2,154		)	(90.9	)%
Total operating expenses	86,876			106,294			(19,418		)	(18.3	)%
Other income	59			111			(52		)	(46.8	)%
Interest income	239			153			86			56.2	%
Interest expense	(23,706		)	(30,221		)	6,515			(21.6	)%
Related party interest expense	(3,475		)	—			(3,475		)	100.0	%
(Loss) gain on sale of hotel properties, net	(21,474		)	14,930			(36,404		)	—	%
Gain on extinguishment of indebtedness, net	—			11,280			(11,280		)	(100.0	)%
Income before equity in income from unconsolidated joint ventures	17,301			61,970			(44,669		)	(72.1	)%
Equity in income from unconsolidated joint ventures	565			945			(380		)	(40.2	)%
Net income and comprehensive income	17,866			62,915			(45,049		)	(71.6	)%
Net income attributable to noncontrolling interests:
Noncontrolling interest in consolidated joint ventures	(78		)	(18		)	(60		)	—	%
Noncontrolling interest in FelCor LP	(164		)	(618		)	454			(73.5	)%
Preferred distributions - consolidated joint venture	(186		)	(1,109		)	923			(83.2	)%
Redemption of preferred equity - consolidated joint venture	(1,153		)	—			(1,153		)	100.0	%
Net income and comprehensive income attributable to Rangers	$	16,285		$	61,170		$	(44,885	)	(73.4	)%

Revenues

Related Party Lease Revenue

Related party lease revenue for the nine months ended September 30, 2019decreased$19.5 million, or 11.3%, to $152.5 million from $172.0 million for the nine months ended September 30, 2018. The decrease was the result of a $29.9 million decrease in related party lease revenue attributable to the non-comparable properties, partially offset by a $10.4 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 the increase in percentage lease revenue as a result of higher room revenues, food and beverage revenues and other revenues of the Lessees. The percentage rent amounts are calculated based on a percentage of room revenues, food and beverage revenues and other revenues at the hotel properties.

Depreciation and Amortization

Depreciation and amortization expense for the nine months ended September 30, 2019decreased$6.2 million, or 10.3%, to $54.3 million from $60.5 million for the nine months ended September 30, 2018. The decrease was the result of a $12.1 million decrease in depreciation and amortization expense attributable to the non-comparable properties, partially offset by a $5.9 million increase in depreciation and amortization expense attributable to the comparable properties.

33

Property Tax, Insurance and Other

Property tax, insurance and other expense for the nine months ended September 30, 2019decreased$11.4 million, or 26.7%, to $31.4 million from $42.8 million for the nine months ended September 30, 2018.  The decrease was primarily attributable to a $10.7 million decrease in property tax, insurance and other expense attributable to the non-comparable properties and a $0.7 million decrease in property tax, insurance and other expense attributable to the comparable properties.

General and Administrative

General and administrative expense for the nine months ended September 30, 2019increased$0.4 million, or 61.5%, to $1.0 million from $0.6 million for the nine months ended September 30, 2018. The increase was primarily attributable to $0.9 million in employee tax credits received during the nine months ended September 30, 2018 that we did not receive during the nine months ended September 30, 2019, partially offset by decreases in other general and administrative expenses of $0.5 million.

Transaction Costs

Transaction costs for the nine months ended September 30, 2019decreased$2.2 million, or 90.9%, to $0.2 million from $2.4 million for the nine months ended September 30, 2018. The decrease in transaction costs was attributable to a decrease of approximately $1.9 million in integration costs that were incurred during the nine months ended September 30, 2018 related to the Mergers, as well as a decrease of $0.3 million in other transaction costs.

Interest Expense

Interest expense for the nine months ended September 30, 2019decreased$6.5 million, or 21.6%, to $23.7 million from $30.2 million for the nine months ended September 30, 2018. The decrease in interest expense was due to the lower average debt balance during the nine months ended September 30, 2019. The lower average debt balance was the result of the redemption of the 5.625% Senior Secured Notes due 2023 (the "Senior Secured Notes") in March 2018, the early payoff of a mortgage loan which encumbered a hotel property that was sold 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. These decreases were partially offset by the increase in interest expense resulting from entering into a new $96.0 million mortgage loan during the nine months ended September 30, 2019.

Related Party Interest Expense

During the nine months ended September 30, 2019, we recognized related party interest expense of $3.5 million. In November 2018, our consolidated joint venture entered into an $85.0 million related party mortgage loan with RLJ LP. The hotel property owned by our consolidated joint venture is encumbered by the related party mortgage loan.

Gain on Extinguishment of Indebtedness, net

During the nine months ended September 30, 2018, we recognized a net gain on extinguishment of indebtedness

of approximately $11.3 million. In March 2018, 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, we recognized a $1.7

million loss on extinguishment of indebtedness, which was due to the early payoff of a mortgage loan that encumbered

a hotel property sold during the nine months ended September 30, 2018. There was no gain or loss on extinguishment of indebtedness during the nine months ended September 30, 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;

• interest expense and scheduled principal payments on outstanding indebtedness; and

34

• 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 from RLJ that would be funded from RLJ's revolving credit facility.

Sources and Uses of Cash

As of September 30, 2019, we had $18.8 million of cash, cash equivalents and restricted cash reserves as compared to $24.6 million at December 31, 2018.

Cash flows from Operating Activities

The net cash flow provided by operating activities totaled $51.2 million and $133.2 million for the nine months ended September 30, 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. Refer to the "Results of Operations" section for further discussion of our operating results for the nine months ended September 30, 2019 and 2018.

Cash flows from Investing Activities

The net cash flow provided by investing activities totaled $101.9 million for the nine months ended September 30, 2019 primarily due to $145.2 million of net cash proceeds from the sale of two hotel properties, partially offset by $42.7 million in routine capital improvements and additions to our hotel properties.

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 five hotel properties, partially offset by $58.2 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 $158.9 million for the nine months ended September 30, 2019 primarily due to $344.3 million in distributions to members, a payment of $45.6 million to redeem the preferred equity in a consolidated joint venture, $1.9 million in scheduled mortgage loan principal payments and $1.0 million in deferred financing cost payments. The net cash flow used in financing activities was partially offset by $135.9 million in contributions from members, $96.0 million in new mortgage borrowings and $2.3 million in contributions from consolidated joint venture partners.

The net cash flow used in financing activities totaled $506.4 million for the nine months ended September 30, 2018 primarily due to a payment of approximately $539.0 million to redeem the Senior Secured Notes, $610.1 million in distributions to members, $28.1 million to pay off a mortgage loan which encumbered a hotel property that was sold, and $2.1 million in scheduled mortgage loan principal payments. The net cash flow used in financing activities was partially offset by $673.9 million in 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") 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.

35

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, 2019, approximately $1.5 million was held in FF&E reserve accounts for future capital expenditures.

Off-Balance Sheet Arrangements

As of September 30, 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 $20.6 million of non-recourse mortgage debt, of which our pro rata portion was $10.3 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 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, 2019, we had approximately $96.0 million of total variable rate debt outstanding (or 12.4% of total indebtedness) with a weighted-average interest rate of 3.62% per annum. As of September 30, 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 $1.0 million annually. As of September 30, 2019, we also had approximately $85.0 million of total variable rate related party debt outstanding (or 11.0% of total indebtedness) with a weighted-average interest rate of 5.02% per annum. As of September 30, 2019, if market interest rates on our variable rate related party debt were to increase by 1.00%, or 100 basis points, related party 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,

36

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, 2019, the following table presents the principal repayments and related weighted-average interest rates by contractual maturity dates (in thousands):

	2019			2020			2021			2022			2023			Thereafter			Total
Fixed rate debt (2)	$	432		$	2,671		$	2,824		$	110,997		$	—		$	475,000		$	591,924
Weighted-average interest rate	4.95		%	4.95		%	4.95		%	4.95		%	—		%	6.00		%	5.79		%
Variable rate debt (1)	$	—		$	—		$	—		$	—		$	—		$	96,000		$	96,000
Weighted-average interest rate	—		%	—		%	—		%	—		%	—		%	3.62		%	3.62		%
Variable rate debt - related party debt	$	—		$	—		$	—		$	—		$	85,000		$	—		$	85,000
Weighted-average interest rate	—		%	—		%	—		%	—		%	5.02		%	—		%	5.02		%
Total	$	432		$	2,671		$	2,824		$	110,997		$	85,000		$	571,000		$	772,924

(1) Excludes $0.9 million of net deferred financing costs on the mortgage loan.

(2) Excludes a total of $28.7 million related to fair value adjustments on the debt that RLJ pushed down to our consolidated financial statements as a result of the Mergers.

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, 2019, the estimated fair value of our fixed rate debt was $663.2 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 $29.4 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, 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, 2019 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

37

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, 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, 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.

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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)
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

39

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 8, 2019	/s/ LESLIE D. HALE
	Leslie D. Hale
	President and Chief Executive Officer
Dated: November 8, 2019	/s/ SEAN M. MAHONEY
	Sean M. Mahoney
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)
Dated: November 8, 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 8, 2019	/s/ LESLIE D. HALE
	Leslie D. Hale
	President and Chief Executive Officer
Dated: November 8, 2019	/s/ SEAN M. MAHONEY
	Sean M. Mahoney
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)
Dated: November 8, 2019	/s/ CHRISTOPHER A. GORMSEN
	Christopher A. Gormsen
	Senior Vice President and Chief Accounting Officer
	(Principal Accounting Officer)

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