-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LiK9lxKeKTqZ/CCKu7+rbeL+LvqKTUUQd4jKok6QbwwjMOHolpgSKcAGyGCBCmFt /F100KCNYhNuPOlNVRO8Vg== 0000908737-98-000159.txt : 19980218 0000908737-98-000159.hdr.sgml : 19980218 ACCESSION NUMBER: 0000908737-98-000159 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980213 ITEM INFORMATION: FILED AS OF DATE: 19980217 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOSPITALITY PROPERTIES TRUST CENTRAL INDEX KEY: 0000945394 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 043262075 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11527 FILM NUMBER: 98541349 BUSINESS ADDRESS: STREET 1: 400 CENTRE ST CITY: NEWTON STATE: MA ZIP: 02158 BUSINESS PHONE: 6179648389 MAIL ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02158 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 13, 1998 HOSPITALITY PROPERTIES TRUST (Exact name of registrant as specified in its charter) Maryland 1-11527 04-3262075 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 400 Centre Street, Newton, MA 02158 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 617-964-8389 CERTAIN IMPORTANT FACTORS This Current Report contains statements which constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this Current Report and include statements regarding the intent, belief or expectations of the Company, its Trustees or its officers with respect to the declaration or payment of dividends, the consummation of additional acquisitions, policies and plans of the Company regarding investments, dispositions, financings, conflicts of interest or other matters, the Company's qualification and continued qualification as a real estate investment trust or trends affecting the Company's or any hotel's financial condition or results of operations. Readers are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contained in the forward looking statement as a result of various factors. Such factors include without limitation changes in financing terms, the Company's ability or inability to complete acquisitions and financing transactions, results of operations of the Company's hotels and general changes in economic conditions not presently contemplated. The information contained in the Company's Form 8-K dated February 11, 1998, including the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations", and in the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 1996, including under the captions "Item 5 Business and Properties" and in Exhibit 99 thereof, identifies other important factors that could cause such differences. THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY, DATED AUGUST 21, 1995 A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HOSPITALITY PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE TRUST. ALL PERSONS DEALING WITH THE TRUST, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION. 2 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) Index to Pro Forma Financial Statements and Other Data (see index on page P-1). (c) List of Exhibits. 12 Pro Forma Ratio of Earnings to Fixed Charges and Other Data. 3 INDEX OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS AND OTHER DATA Introduction to Unaudited Pro Forma Financial Statements and Other Data....................................................... P-2 Unaudited Pro Forma Balance Sheet and Other Data..................... P-3 Unaudited Pro Forma Income Statement and Other Data.................. P-4 Notes to Unaudited Pro Forma Financial Statements and Other Data........................................................... P-5 P-1 HOSPITALITY PROPERTIES TRUST Unaudited Pro Forma Financial Statements and Other Data The following unaudited adjusted pro forma balance sheet at December 31, 1997 is intended to present the financial position of the Company as if the transactions described in the notes hereto (the "Transactions") were consummated at December 31, 1997. The following unaudited adjusted pro forma statement of income for the year ended December 31, 1997 is intended to present the results of operations of the Company as if the Transactions were consummated on January 1, 1997. These unaudited adjusted pro forma financial statements should be read in conjunction with, and are qualified in their entirety by reference to, the separate financial statements of the Company and certain of the acquired hotel properties each included elsewhere herein or in the Company's Current Reports on Form 8-K dated November 21, 1997, December 9, 1997 and February 11, 1998. These unaudited adjusted pro forma financial statements are not necessarily indicative of the expected financial position or results of operations of the Company for any future period. Differences would result from, among other considerations, future changes in the Company's portfolio of investments, changes in interest rates, changes in the capital structure of the Company, delays in the acquisition of certain properties and changes in the Company's operating expenses. The following unaudited pro forma balance sheet and unaudited pro forma statement of income were prepared pursuant to the Securities and Exchange Commission's rules for the presentation of pro forma data. The pro forma and adjusted pro forma other data give effect to the consummation by the Company of the Transactions. Certain properties expected to be acquired by the Company are currently under construction or development by the sellers. Other properties were under construction during the periods presented when they were owned or under development by the sellers. The accompanying pro forma information does not give further effect to the completion of construction or the related lease commencement for any period prior thereto. Construction projects not completed by December 31, 1997 are likewise not reflected in the pro forma balance sheet. Rather, the effect of completion of construction of these properties is presented separately from the pro forma information as described in the accompanying notes. The Company believes that a display of such adjusted pro forma data is meaningful and relevant to the understanding of the Transactions and, accordingly has presented such data in the final two columns, labeled "Other Data," on the accompanying pages. P-2
HOSPITALITY PROPERTIES TRUST UNAUDITED PRO FORMA BALANCE SHEET AND OTHER DATA As of December 31, 1997 ----------------------------------------------------------------------------------------------- Pro Forma Other Data ------------------------------------- ------------------------------------- Pro Forma Other Adjusted Historical [A] Adjustments Pro Forma Adjustments Pro Forma --------------- ----------------- ---------------- ---------------- ---------------- (in thousands) Assets Real estate properties $1,266,035 $ 56,915 [B] $1,322,950 $ 99,018 [G] $ 1,421,968 Accumulated depreciation (58,167) - (58,167) - (58,167) --------------- ----------------- ---------------- ---------------- ---------------- 1,207,868 56,915 1,264,783 99,018 1,363,801 Cash and cash equivalents 81,728 (27,401)[C] 54,327 (52,599)[H] 1,728 FF&E reserve (restricted cash) 11,165 - 11,165 - 11,165 Rent Receivable 1,623 - 1,623 - 1,623 Other assets 10,872 (2,900)[D} 7,972 184 [I] 8,156 --------------- ----------------- ---------------- ---------------- ---------------- $ 1,313,256 $ 26,614 $ 1,339,870 $ 46,603 $ 1,386,473 =============== ================= ================ ================ ================ Liabilities and Shareholders' Equity Term Debt $125,000 $ 150,000 [E] $ 150,000 $ - $150,000 (125,000)[F] Revolving Debt - - - 36,701 [I] 36,701 Security deposits 146,662 5,614 [B] 152,276 9,902 [J] 162,178 Other liabilities 33,701 - 33,701 - 33,701 Shareholders' equity Common shares of beneficial interest 389 - 389 - 389 Additional paid-in capital 1,033,073 - 1,033,073 - 1,033,073 Cumulative net income 122,166 (4,000)[D] 118,166 - 118,166 Dividends (147,735) - (147,735) - (147,735) --------------- ----------------- ---------------- ---------------- ---------------- Total shareholders' equity 1,007,893 (4,000) 1,003,893 - 1,003,893 --------------- ----------------- ---------------- ---------------- ---------------- $ 1,313,256 $ 26,614 $ 1,339,870 $ 46,603 $ 1,386,473 =============== ================= ================ ================ ================
P-3
HOSPITALITY PROPERTIES TRUST UNAUDITED PRO FORMA INCOME STATEMENT AND OTHER DATA Year Ended December 31, 1997 -------------------------------------------------------------------------------------------- Pro Forma Other Data ------------------------------------- --------------------------------- Pro Forma Other Adjusted Historical [K] Adjustments Pro Forma Adjustments Pro Forma ---------------- ----------------- ---------------- --------------- --------------- (in thousands, except per Share data) Revenues Rental Revenue $98,561 $19,616 [L] $118,177 $20,096 [Q] $138,273 FF&E Reserve Income 14,643 - 14,643 - 14,643 Other Income 928 - 928 - 928 ---------------- ----------------- ---------------- --------------- -------------- Total Revenue 114,132 19,616 133,748 20,096 153,844 ---------------- ----------------- ---------------- --------------- -------------- Expenses Depreciation and Amortization 31,949 8,083 [M] 40,032 6,198 [R] 46,230 Interest 15,534 (12,138)[N] 3,396 9,975 [S] 13,371 Terminated acquisition costs 713 - 713 - 713 General and Administrative 6,783 498 [O] 7,281 1,806 [T] 9,087 ---------------- ----------------- ---------------- --------------- -------------- Total Expenses 54,979 (3,557) 51,422 17,979 69,401 ---------------- ----------------- ---------------- --------------- -------------- Net Income $59,153 $23,173 $82,326 $ 2,117 $84,443 ================ ================= ================ =============== ============== Weighted Average Shares Outstanding 27,530 11,348 [P] 38,878 - 38,878 ================ ================= ================ =============== ============== Net Income Per Share $2.15 $2.12 $2.17 ================ ================ ============== Ratio of Earnings to Fixed Charges 4.8x 25.2x 7.3x
P-4 Hospitality Properties Trust Notes to Unaudited Pro Forma Financial Statements and Other Data (in thousands) Pro Forma Balance Sheet Adjustments A. Represents the historical balance sheet of the Company at December 31, 1997. B. Represents the purchase of the 9 Candlewood[RegTM] hotels open but not acquired as of December 31, 1997 for a cash price of $50,525, net of purchase price withheld for security deposits of $5,614, plus closing costs. C. Represents the net effect of the pro forma adjustments on cash. D. Represents the write off of deferred financing costs related to the secured term debt and the recording of the deferred finance costs in connection with the proposed offering of $150,000 of senior notes (the "Offering"). The accompanying pro forma income statement excludes the extraordinary loss and other non-recurring charges of $4,000 related to the expected early extinguishment of secured term debt. E. Represents prepayment of the $125,000 of secured term debt. F. Represents issuance of the senior notes expected to be issued in the Offering. Other Data Balance Sheet Adjustments G. Represents the purchase of the 7 hotels to be acquired but not open as of December 31, 1997: Cash purchase prices: 4 Courtyard by Marriott[RegTM] hotels $ 42,647 2 Residence Inn by Marriott[RegTM] hotels 39,357 One Candlewood[RegTM] hotel 7,112 Purchase price withheld as security deposits 9,902 ---------- Total $ 99,018 ========== The above hotels are properties the Company expects to purchase from sellers upon completion of construction. H. Represents net effect of the pro forma adjustments on cash. I. Represents pro forma net borrowings by the Company under its credit facility to complete planned hotel acquisitions, including $184 of draw fees. P-5 Hospitality Properties Trust Notes to Unaudited Pro Forma Financial Statements and Other Data (in thousands) J. Represents security deposits held by the Company as a result of purchasing and leasing the following hotels: 4 Courtyard by Marriott[RegTM] hotels $ 4,739 2 Residence Inn by Marriott[RegTM] hotels 4,373 One Candlewood[RegTM] hotel 790 ------- Total $ 9,902 ======= Pro Forma Income Statement Adjustments K. Represents the historical income statement of the Company for the year ended December 31, 1997. L. Represents the pro forma effect of leases entered and to be entered for hotels open during the period presented. This pro forma effect is derived as follows: Year Ended December 31, 1997 Pro forma Minimum Rent $ 115,649 Pro forma Percentage Rent 2,528 Amounts included in historical Minimum Rent (96,033) Amounts included in historical Percentage Rent (2,528) ---------- $ 19,616 ========== Certain of the hotels owned by the Company as of December 31, 1997 were under development and others are currently under development by the sellers of these properties. The Company is not contractually obligated to acquire these hotels until they are substantially completed. The foregoing pro forma income statement assumes the hotels, which were completed prior to December 31, 1997 were acquired as of their completion date. M. Represents the impact of the pro forma transactions on depreciation expense for the entire period presented. N. Represents the elimination of interest on the secured term debt ($125,000) at LIBOR plus the contractual spreads for the entire period presented, plus amortization of deferred financing costs offset by the pro forma interest expense of the proposed issuance of the senior notes. The average applicable LIBOR rate was 5.60% for the year ended December 31, 1997. O. Represents the estimated impact of the pro forma transactions on general and administrative expenses of the Company for the period presented. P. Represents the impact of additional Shares issued in 1997. P-6 Hospitality Properties Trust Notes to Unaudited Pro Forma Financial Statements and Other Data (in thousands) Other Data Income Statement Adjustments Q. Represents the adjusted pro forma effect of leases entered and to be entered for the transactions described in Note G, above, since January 1, 1997. This adjusted pro forma effect is derived as follows: Year Ended December 31, 1997 Adjusted Pro forma Minimum Rent $ 135,745 Adjusted Pro forma Percentage Rent 2,528 Amounts included in pro forma Minimum Rent (115,649) Amounts included in pro forma Percentage Rent (2,528) ------------- $ 20,096 ============= R. Represents the impact of the transactions described in Note G, above, on depreciation expense for the entire period presented. S. Represents interest on the credit line borrowings to be made in connection with the transactions described in Note G, above, at LIBOR plus contractual spreads for the entire period presented. The average applicable LIBOR rate was 5.60% for the year ended December 31, 1997. T. Represents the estimated impact of the transactions described in Note G, above, on general and administrative expenses of the Company. P-7 SIGNATURE 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. HOSPITALITY PROPERTIES TRUST By: /s/Thomas M. O'Brien -------------------------------------- Thomas M. O'Brien, Treasurer and Chief Financial Officer Date: February 13, 1998 EX-12 2 Exhibit 12
Hospitality Properties Trust Computation of Pro Forma Ratio to Fixed Charges and Other Data (in thousands, except ratio amounts) For the Year ended December 31, 1997 Adjusted Historical Pro Forma Pro Forma Income $59,153 $82,326 $84,443 Fixed Charges 15,534 3,396 13,371 ------- ------- ------- Adjusted Earnings $74,687 $85,722 $97,814 ======= ======= ======= Fixed Charges: Interest on indebtedness and amortization of deferred finance cost $15,534 $3,396 $13,371 ------- ------ ------- Total Fixed Charges $15,534 $3,396 $13,371 ======= ====== ======= Ratio of Earnings to Fixed Charges 4.8x 25.2x 7.3x ======= ====== =======
This computation should be read in conjunction with the Unaudited Pro Forma Financial Statements and Other Data contained elsewhere in this Form 8-K. -----END PRIVACY-ENHANCED MESSAGE-----