Maryland | 04-3262075 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts | 02458 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer ☒ | Accelerated filer ☐ | |
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☐ | |
Emerging growth company ☐ |
Page | ||
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Real estate properties: | ||||||||
Land | $ | 1,668,493 | $ | 1,566,630 | ||||
Buildings, improvements and equipment | 7,719,367 | 7,156,759 | ||||||
Total real estate properties, gross | 9,387,860 | 8,723,389 | ||||||
Accumulated depreciation | (2,719,738 | ) | (2,513,996 | ) | ||||
Total real estate properties, net | 6,668,122 | 6,209,393 | ||||||
Cash and cash equivalents | 14,489 | 10,896 | ||||||
Restricted cash (FF&E reserve escrow) | 73,115 | 60,456 | ||||||
Due from related persons | 75,231 | 65,332 | ||||||
Other assets, net | 313,510 | 288,151 | ||||||
Total assets | $ | 7,144,467 | $ | 6,634,228 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Unsecured revolving credit facility | $ | 458,000 | $ | 191,000 | ||||
Unsecured term loan, net | 398,920 | 398,421 | ||||||
Senior unsecured notes, net | 3,163,865 | 2,565,908 | ||||||
Convertible senior unsecured notes | — | 8,478 | ||||||
Security deposits | 126,574 | 89,338 | ||||||
Accounts payable and other liabilities | 160,144 | 188,053 | ||||||
Due to related persons | 47,509 | 58,475 | ||||||
Dividends payable | — | 5,166 | ||||||
Total liabilities | 4,355,012 | 3,504,839 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Preferred shares of beneficial interest, no par value; 100,000,000 shares authorized: | ||||||||
Series D preferred shares; 7 1/8% cumulative redeemable; zero and 11,600,000 shares issued and outstanding, respectively, aggregate liquidation preference of zero and $290,000, respectively | — | 280,107 | ||||||
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 164,349,141 and 164,268,199 shares issued and outstanding, respectively | 1,643 | 1,643 | ||||||
Additional paid in capital | 4,541,978 | 4,539,673 | ||||||
Cumulative net income | 3,278,475 | 3,104,767 | ||||||
Cumulative other comprehensive income | 59,801 | 39,583 | ||||||
Cumulative preferred distributions | (343,412 | ) | (341,977 | ) | ||||
Cumulative common distributions | (4,749,030 | ) | (4,494,407 | ) | ||||
Total shareholders’ equity | 2,789,455 | 3,129,389 | ||||||
Total liabilities and shareholders’ equity | $ | 7,144,467 | $ | 6,634,228 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
Hotel operating revenues | $ | 495,550 | $ | 464,981 | $ | 1,392,995 | $ | 1,334,656 | ||||||||
Rental income | 80,896 | 77,470 | 240,274 | 229,760 | ||||||||||||
FF&E reserve income | 1,142 | 1,065 | 3,524 | 3,517 | ||||||||||||
Total revenues | 577,588 | 543,516 | 1,636,793 | 1,567,933 | ||||||||||||
Expenses: | ||||||||||||||||
Hotel operating expenses | 343,274 | 322,012 | 965,546 | 923,239 | ||||||||||||
Depreciation and amortization | 98,205 | 90,139 | 286,811 | 266,192 | ||||||||||||
General and administrative | 13,404 | 37,739 | 76,097 | 91,127 | ||||||||||||
Acquisition related costs | — | 156 | — | 885 | ||||||||||||
Total expenses | 454,883 | 450,046 | 1,328,454 | 1,281,443 | ||||||||||||
Operating income | 122,705 | 93,470 | 308,339 | 286,490 | ||||||||||||
Dividend income | 626 | 626 | 1,878 | 1,375 | ||||||||||||
Interest income | 211 | 89 | 590 | 227 | ||||||||||||
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $2,194 and $2,122 and $6,541 and $6,114, respectively) | (46,574 | ) | (41,280 | ) | (135,329 | ) | (124,564 | ) | ||||||||
Loss on early extinguishment of debt | — | (158 | ) | — | (228 | ) | ||||||||||
Income before income taxes, equity in earnings of an investee and gain on sale of real estate | 76,968 | 52,747 | 175,478 | 163,300 | ||||||||||||
Income tax expense | (619 | ) | (948 | ) | (1,761 | ) | (3,483 | ) | ||||||||
Equity in earnings of an investee | 31 | 13 | 533 | 107 | ||||||||||||
Income before gain on sale of real estate | 76,380 | 51,812 | 174,250 | 159,924 | ||||||||||||
Gain on sale of real estate | 9,348 | — | 9,348 | — | ||||||||||||
Net income | 85,728 | 51,812 | 183,598 | 159,924 | ||||||||||||
Other comprehensive income: | ||||||||||||||||
Unrealized gain on investment securities | 7,273 | 14,032 | 19,923 | 51,253 | ||||||||||||
Equity interest in investee’s unrealized gains | 116 | 80 | 295 | 175 | ||||||||||||
Other comprehensive income | 7,389 | 14,112 | 20,218 | 51,428 | ||||||||||||
Comprehensive income | $ | 93,117 | $ | 65,924 | $ | 203,816 | $ | 211,352 | ||||||||
Net income | $ | 85,728 | $ | 51,812 | $ | 183,598 | $ | 159,924 | ||||||||
Preferred distributions | — | (5,166 | ) | (1,435 | ) | (15,498 | ) | |||||||||
Excess of liquidation preference over carrying value of preferred shares redeemed | — | — | (9,893 | ) | — | |||||||||||
Net income available for common shareholders | $ | 85,728 | $ | 46,646 | $ | 172,270 | $ | 144,426 | ||||||||
Weighted average common shares outstanding (basic) | 164,149 | 157,217 | 164,131 | 153,357 | ||||||||||||
Weighted average common shares outstanding (diluted) | 164,188 | 157,263 | 164,168 | 153,390 | ||||||||||||
Net income available for common shareholders per common share (basic and diluted) | $ | 0.52 | $ | 0.30 | $ | 1.05 | $ | 0.94 |
For the Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 183,598 | $ | 159,924 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 286,811 | 266,192 | ||||||
Amortization of debt issuance costs and debt discounts and premiums as interest | 6,541 | 6,114 | ||||||
Straight line rental income | (9,208 | ) | (10,377 | ) | ||||
Security deposits received or replenished | 37,239 | 34,945 | ||||||
FF&E reserve income and deposits | (56,936 | ) | (57,890 | ) | ||||
Loss on early extinguishment of debt | — | 228 | ||||||
Equity in earnings of an investee | (533 | ) | (107 | ) | ||||
Gain on sale of real estate | (9,348 | ) | — | |||||
Other non-cash (income) expense, net | (2,523 | ) | (2,298 | ) | ||||
Changes in assets and liabilities: | ||||||||
Due from related persons | (992 | ) | (1,909 | ) | ||||
Other assets | (12,996 | ) | (8,284 | ) | ||||
Accounts payable and other liabilities | (21,979 | ) | (20,823 | ) | ||||
Due to related persons | (12,619 | ) | (5,637 | ) | ||||
Net cash provided by operating activities | 387,055 | 360,078 | ||||||
Cash flows from investing activities: | ||||||||
Real estate acquisitions and deposits | (594,927 | ) | (206,745 | ) | ||||
Real estate improvements | (89,955 | ) | (122,239 | ) | ||||
FF&E reserve escrow fundings | (22,011 | ) | (2,265 | ) | ||||
Net proceeds from sale of real estate | 23,438 | — | ||||||
Net cash used in investing activities | (683,455 | ) | (331,249 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common shares, net | — | 371,956 | ||||||
Proceeds from issuance of senior unsecured notes, after discounts and premiums | 598,246 | 737,612 | ||||||
Repayment of senior unsecured notes | — | (575,000 | ) | |||||
Redemption of preferred shares | (290,000 | ) | — | |||||
Repurchase of convertible senior notes | (8,478 | ) | — | |||||
Borrowings under unsecured revolving credit facility | 631,000 | 643,000 | ||||||
Repayments of unsecured revolving credit facility | (364,000 | ) | (958,000 | ) | ||||
Payment of debt issuance costs | (5,018 | ) | (6,106 | ) | ||||
Repurchase of common shares | (533 | ) | (583 | ) | ||||
Distributions to preferred shareholders | (6,601 | ) | (15,498 | ) | ||||
Distributions to common shareholders | (254,623 | ) | (230,358 | ) | ||||
Net cash provided by (used in) financing activities | 299,993 | (32,977 | ) | |||||
Increase (decrease) in cash and cash equivalents | 3,593 | (4,148 | ) | |||||
Cash and cash equivalents at beginning of period | 10,896 | 13,682 | ||||||
Cash and cash equivalents at end of period | $ | 14,489 | $ | 9,534 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 149,261 | $ | 137,007 | ||||
Cash paid for income taxes | 2,588 | 2,464 | ||||||
Non-cash investing activities: | ||||||||
Hotel managers’ deposits in FF&E reserve | $ | 55,222 | $ | 55,518 | ||||
Hotel managers’ purchases with FF&E reserve | (64,574 | ) | (48,388 | ) |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
(in thousands) | ||||||||||||
Weighted average common shares for basic earnings per share | 164,149 | 157,217 | 164,131 | 153,357 | ||||||||
Effect of dilutive securities: Unvested share awards | 39 | 46 | 37 | 33 | ||||||||
Weighted average common shares for diluted earnings per share | 164,188 | 157,263 | 164,168 | 153,390 |
Acquisition Date | Location | Purchase Price | Land | Land Improvements | Building and Improvements | Furniture, Fixtures and Equipment | Intangible Assets | |||||||||||||||||||
2/1/2017 | Chicago, IL (1) | $ | 86,201 | $ | 13,609 | $ | 40 | $ | 58,929 | $ | 11,926 | $ | 1,697 | |||||||||||||
3/31/2017 | Seattle, WA (2) | 71,795 | 24,143 | 30 | 46,337 | 844 | 441 | |||||||||||||||||||
5/3/2017 | Columbia, SC (3) | 27,604 | 4,040 | 7,172 | 16,392 | — | — | |||||||||||||||||||
6/2/2017 | St. Louis, MO (4) | 88,076 | 4,250 | 161 | 79,733 | 3,394 | 538 | |||||||||||||||||||
6/29/2017 | Atlanta, GA (5) | 88,744 | 16,611 | 483 | 68,861 | 2,789 | — | |||||||||||||||||||
8/1/2017 | Columbus, OH (6) | 49,188 | 6,100 | 49 | 40,678 | 2,361 | — | |||||||||||||||||||
8/23/2017 | Charlotte, NC (7) | 43,972 | 2,682 | 1,011 | 35,266 | 5,013 | — | |||||||||||||||||||
9/8/2017 | Atlanta, GA (8) | 940 | 940 | — | — | — | — | |||||||||||||||||||
9/26/2017 | Various (9) | 139,954 | 30,731 | 6,393 | 93,914 | 8,916 | — | |||||||||||||||||||
9/28/2017 | Sayre, OK (10) | 8,664 | 1,030 | — | 7,634 | — | — | |||||||||||||||||||
$ | 605,138 | $ | 104,136 | $ | 15,339 | $ | 447,744 | $ | 35,243 | $ | 2,676 |
(1) | On February 1, 2017, we acquired the 483 room Hotel Allegro in Chicago, IL for a purchase price of $86,201, including capitalized acquisition costs of $707. We added this Kimpton® branded hotel to our management agreement with InterContinental Hotels Group, plc, or InterContinental. See Note 8 for further information regarding our InterContinental agreement. |
(2) | On March 31, 2017, we acquired the 121 room Hotel Alexis in Seattle, WA for a purchase price of $71,795, including capitalized acquisition costs of $170. We added this Kimpton® branded hotel to our management agreement with InterContinental. See Note 8 for further information regarding our InterContinental agreement. |
(3) | On May 3, 2017, pursuant to the terms of our June 2015 transaction agreement with TA, as amended, we acquired from, and leased back to, TA a newly developed travel center located in Columbia, SC for a purchase price of $27,604, including capitalized acquisition costs of $2. This property was added to our TA No. 4 lease and our minimum annual rent under the lease increased by $2,346 as a result. See Notes 8 and 10 for further information regarding our TA leases. |
(4) | On June 2, 2017, we acquired the 389 room Chase Park Plaza Hotel in St. Louis, MO for a purchase price of $88,076, including capitalized acquisition costs of $462. We converted this hotel to the Royal Sonesta® hotel brand and added it to our management agreement with Sonesta International Hotels Corporation, or Sonesta. See Notes 8 and 10 for further information regarding our Sonesta agreement. |
(5) | On June 29, 2017, we acquired the 495 room Crowne Plaza Ravinia hotel located in Atlanta, GA for a purchase price of $88,744, including capitalized acquisition costs of $140. We added this Crowne Plaza® branded hotel to our management agreement with InterContinental. See Note 8 for further information regarding our InterContinental agreement. |
(6) | On August 1, 2017, we acquired the 419 room Crowne Plaza & Lofts hotel in Columbus, OH for a purchase price of $49,188, including capitalized acquisition costs of $198. We added this Crowne Plaza® branded hotel to our management agreement with InterContinental. See Note 8 for further information regarding our InterContinental agreement. |
(7) | On August 23, 2017, we acquired the 300 room Crowne Plaza hotel in Charlotte, NC for a purchase price of $43,972, including capitalized acquisition costs of $115. We added this Crowne Plaza® branded hotel to our management agreement with InterContinental. See Note 8 for further information regarding our InterContinental agreement. |
(8) | On September 8, 2017, we acquired a land parcel adjacent to our Crowne Plaza hotel located in Atlanta, GA for a purchase price of $940, including capitalized acquisition costs of $40. |
(9) | On September 26, 2017, we acquired 14 extended stay hotels with 1,653 suites located in 12 states for a purchase price of $139,954, including capitalized acquisition costs of $1,954. In connection with this acquisition, we converted these hotels to the Sonesta ES Suites® brand and added them to our management agreement with Sonesta. See Notes 8 and 10 for further information regarding our Sonesta agreement. |
(10) | On September 28, 2017, we acquired land and certain improvements at a travel center that we previously leased from a third party and subleased to TA for a purchase price of $8,664, including capitalized acquisition costs of $64. Effective as of that date, rent due to that third party and TA’s sublease rental obligations to pay the third party rent ceased, and we amended our lease with TA to |
For the Three Months Ended September 30, 2017 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Revenues: | ||||||||||||||||
Hotel operating revenues | $ | 495,550 | $ | — | $ | — | $ | 495,550 | ||||||||
Rental income | 7,617 | 73,279 | — | 80,896 | ||||||||||||
FF&E reserve income | 1,142 | — | — | 1,142 | ||||||||||||
Total revenues | 504,309 | 73,279 | — | 577,588 | ||||||||||||
Expenses: | ||||||||||||||||
Hotel operating expenses | 343,274 | — | — | 343,274 | ||||||||||||
Depreciation and amortization | 61,996 | 36,209 | — | 98,205 | ||||||||||||
General and administrative | — | — | 13,404 | 13,404 | ||||||||||||
Total expenses | 405,270 | 36,209 | 13,404 | 454,883 | ||||||||||||
Operating income (loss) | 99,039 | 37,070 | (13,404 | ) | 122,705 | |||||||||||
Dividend income | — | — | 626 | 626 | ||||||||||||
Interest income | — | — | 211 | 211 | ||||||||||||
Interest expense | — | — | (46,574 | ) | (46,574 | ) | ||||||||||
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate | 99,039 | 37,070 | (59,141 | ) | 76,968 | |||||||||||
Income tax expense | — | — | (619 | ) | (619 | ) | ||||||||||
Equity in earnings of an investee | — | — | 31 | 31 | ||||||||||||
Income (loss) before gain on sale of real estate | 99,039 | 37,070 | (59,729 | ) | 76,380 | |||||||||||
Gain on sale of real estate | 9,348 | — | — | 9,348 | ||||||||||||
Net income (loss) | $ | 108,387 | $ | 37,070 | $ | (59,729 | ) | $ | 85,728 | |||||||
For the Nine Months Ended September 30, 2017 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Revenues: | ||||||||||||||||
Hotel operating revenues | $ | 1,392,995 | $ | — | $ | — | $ | 1,392,995 | ||||||||
Rental income | 22,854 | 217,420 | — | 240,274 | ||||||||||||
FF&E reserve income | 3,524 | — | — | 3,524 | ||||||||||||
Total revenues | 1,419,373 | 217,420 | — | 1,636,793 | ||||||||||||
Expenses: | ||||||||||||||||
Hotel operating expenses | 965,546 | — | — | 965,546 | ||||||||||||
Depreciation and amortization | 179,503 | 107,308 | — | 286,811 | ||||||||||||
General and administrative | — | — | 76,097 | 76,097 | ||||||||||||
Total expenses | 1,145,049 | 107,308 | 76,097 | 1,328,454 | ||||||||||||
Operating income (loss) | 274,324 | 110,112 | (76,097 | ) | 308,339 | |||||||||||
Dividend income | — | — | 1,878 | 1,878 | ||||||||||||
Interest income | — | — | 590 | 590 | ||||||||||||
Interest expense | — | — | (135,329 | ) | (135,329 | ) | ||||||||||
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate | 274,324 | 110,112 | (208,958 | ) | 175,478 | |||||||||||
Income tax expense | — | — | (1,761 | ) | (1,761 | ) | ||||||||||
Equity in earnings of an investee | — | — | 533 | 533 | ||||||||||||
Income (loss) before gain on sale of real estate | 274,324 | 110,112 | (210,186 | ) | 174,250 | |||||||||||
Gain on sale of real estate | 9,348 | — | — | 9,348 | ||||||||||||
Net income (loss) | $ | 283,672 | $ | 110,112 | $ | (210,186 | ) | $ | 183,598 | |||||||
As of September 30, 2017 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Total assets | $ | 4,490,298 | $ | 2,486,179 | $ | 167,990 | $ | 7,144,467 |
For the Three Months Ended September 30, 2016 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Revenues: | ||||||||||||||||
Hotel operating revenues | $ | 464,981 | $ | — | $ | — | $ | 464,981 | ||||||||
Rental income | 7,604 | 69,866 | — | 77,470 | ||||||||||||
FF&E reserve income | 1,065 | — | — | 1,065 | ||||||||||||
Total revenues | 473,650 | 69,866 | — | 543,516 | ||||||||||||
Expenses: | ||||||||||||||||
Hotel operating expenses | 322,012 | — | — | 322,012 | ||||||||||||
Depreciation and amortization | 56,397 | 33,742 | — | 90,139 | ||||||||||||
General and administrative | — | — | 37,739 | 37,739 | ||||||||||||
Acquisition related costs | 156 | — | — | 156 | ||||||||||||
Total expenses | 378,565 | 33,742 | 37,739 | 450,046 | ||||||||||||
Operating income (loss) | 95,085 | 36,124 | (37,739 | ) | 93,470 | |||||||||||
Dividend income | 626 | 626 | ||||||||||||||
Interest income | — | — | 89 | 89 | ||||||||||||
Interest expense | — | — | (41,280 | ) | (41,280 | ) | ||||||||||
Loss on early extinguishment of debt | (158 | ) | (158 | ) | ||||||||||||
Income (loss) before income taxes and equity in earnings of an investee | 95,085 | 36,124 | (78,462 | ) | 52,747 | |||||||||||
Income tax expense | — | — | (948 | ) | (948 | ) | ||||||||||
Equity in earnings of an investee | — | — | 13 | 13 | ||||||||||||
Net income (loss) | $ | 95,085 | $ | 36,124 | $ | (79,397 | ) | $ | 51,812 | |||||||
For the Nine Months Ended September 30, 2016 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Revenues: | ||||||||||||||||
Hotel operating revenues | $ | 1,334,656 | $ | — | $ | — | $ | 1,334,656 | ||||||||
Rental income | 22,810 | 206,950 | — | 229,760 | ||||||||||||
FF&E reserve income | 3,517 | — | — | 3,517 | ||||||||||||
Total revenues | 1,360,983 | 206,950 | — | 1,567,933 | ||||||||||||
Expenses: | ||||||||||||||||
Hotel operating expenses | 923,239 | — | — | 923,239 | ||||||||||||
Depreciation and amortization | 167,485 | 98,707 | — | 266,192 | ||||||||||||
General and administrative | — | — | 91,127 | 91,127 | ||||||||||||
Acquisition related costs | 885 | — | — | 885 | ||||||||||||
Total expenses | 1,091,609 | 98,707 | 91,127 | 1,281,443 | ||||||||||||
Operating income (loss) | 269,374 | 108,243 | (91,127 | ) | 286,490 | |||||||||||
Dividend income | 1,375 | 1,375 | ||||||||||||||
Interest income | — | — | 227 | 227 | ||||||||||||
Interest expense | — | — | (124,564 | ) | (124,564 | ) | ||||||||||
Loss on early extinguishment of debt | (228 | ) | (228 | ) | ||||||||||||
Income (loss) before income taxes and equity in earnings of an investee | 269,374 | 108,243 | (214,317 | ) | 163,300 | |||||||||||
Income tax expense | — | — | (3,483 | ) | (3,483 | ) | ||||||||||
Equity in earnings of an investee | — | — | 107 | 107 | ||||||||||||
Net income (loss) | $ | 269,374 | $ | 108,243 | $ | (217,693 | ) | $ | 159,924 | |||||||
As of December 31, 2016 | ||||||||||||||||
Hotels | Travel Centers | Corporate | Consolidated | |||||||||||||
Total assets | $ | 4,005,481 | $ | 2,483,718 | $ | 145,029 | $ | 6,634,228 |
Fair Value at September 30, 2017 Using | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Carrying Value at | Identical Assets | Observable Inputs | Unobservable Inputs | |||||||||||||
Description | September 30, 2017 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Recurring Fair Value Measurement Assets: | ||||||||||||||||
Investment in TA (1) | $ | 14,535 | $ | 14,535 | $ | — | $ | — | ||||||||
Investment in RMR Inc.(2) | $ | 128,569 | $ | 128,569 | $ | — | $ | — |
(1) | Our 3,420,000 common shares of TA, which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $17,407 as of September 30, 2017. The unrealized loss of ($2,872) for these shares as of September 30, 2017 is included in cumulative other comprehensive income in our condensed consolidated balance sheets. We evaluated the decline in the fair value of the TA shares and determined that based on the severity and duration of the decline, and our ability and intent to hold the investment for a reasonable period of time sufficient for a recovery of fair value, we do not consider this investment to be other-than-temporarily impaired at September 30, 2017. |
(2) | Our 2,503,777 shares of class A common stock of RMR Inc., which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $66,374 as of September 30, 2017. The unrealized gain of $62,195 for these shares as of September 30, 2017 is included in cumulative other comprehensive income in our condensed consolidated balance sheets. |
September 30, 2017 | December 31, 2016 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value (1) | Value | Value (1) | Value | |||||||||||||
Senior Unsecured Notes, due 2018 at 6.70% (2) | $ | 349,812 | $ | 351,253 | $ | 349,387 | $ | 358,740 | ||||||||
Senior Unsecured Notes, due 2021 at 4.25% | 395,137 | 417,246 | 394,056 | 413,790 | ||||||||||||
Senior Unsecured Notes, due 2022 at 5.00% | 494,095 | 537,360 | 493,187 | 527,945 | ||||||||||||
Senior Unsecured Notes, due 2023 at 4.50% | 499,063 | 530,825 | 298,134 | 298,845 | ||||||||||||
Senior Unsecured Notes, due 2024 at 4.65% | 347,383 | 367,026 | 347,079 | 348,523 | ||||||||||||
Senior Unsecured Notes, due 2025 at 4.50% | 344,883 | 360,227 | 344,368 | 341,439 | ||||||||||||
Senior Unsecured Notes, due 2026 at 5.25% | 340,544 | 375,799 | 339,697 | 354,772 | ||||||||||||
Senior Unsecured Notes, due 2027 at 4.95% | 392,948 | 421,316 | — | — | ||||||||||||
Convertible Unsecured Senior Notes, due 2027 at 3.8% (3) | — | — | 8,478 | 8,599 | ||||||||||||
Total financial liabilities | $ | 3,163,865 | $ | 3,361,052 | $ | 2,574,386 | $ | 2,652,653 |
(1) | Carrying value includes unamortized discounts and premiums and certain issuance costs. |
(2) | These senior notes were redeemed at par plus accrued interest in October 2017. |
(3) | These convertible senior notes were redeemed at par plus accrued interest in April 2017. |
For the Three Months Ended September 30, | |||||||||||||||
Increase | % Increase | ||||||||||||||
2017 | 2016 | (Decrease) | (Decrease) | ||||||||||||
Revenues: | |||||||||||||||
Hotel operating revenues | $ | 495,550 | $ | 464,981 | $ | 30,569 | 6.6 | % | |||||||
Rental income - hotels | 7,617 | 7,604 | 13 | 0.2 | % | ||||||||||
Rental income - travel centers | 73,279 | 69,866 | 3,413 | 4.9 | % | ||||||||||
Total rental income | 80,896 | 77,470 | 3,426 | 4.4 | % | ||||||||||
FF&E reserve income | 1,142 | 1,065 | 77 | 7.2 | % | ||||||||||
Expenses: | |||||||||||||||
Hotel operating expenses | 343,274 | 322,012 | 21,262 | 6.6 | % | ||||||||||
Depreciation and amortization - hotels | 61,996 | 56,397 | 5,599 | 9.9 | % | ||||||||||
Depreciation and amortization - travel centers | 36,209 | 33,742 | 2,467 | 7.3 | % | ||||||||||
Total depreciation and amortization | 98,205 | 90,139 | 8,066 | 8.9 | % | ||||||||||
General and administrative | 13,404 | 37,739 | (24,335 | ) | (64.5 | )% | |||||||||
Acquisition related costs | — | 156 | (156 | ) | (100.0 | )% | |||||||||
Operating income | 122,705 | 93,470 | 29,235 | 31.3 | % | ||||||||||
Dividend income | 626 | 626 | — | — | % | ||||||||||
Interest income | 211 | 89 | 122 | 137.1 | % | ||||||||||
Interest expense | (46,574 | ) | (41,280 | ) | (5,294 | ) | 12.8 | % | |||||||
Loss on early extinguishment of debt | — | (158 | ) | 158 | — | % | |||||||||
Income before income taxes, equity earnings of an investee and gain on sale of real estate | 76,968 | 52,747 | 24,221 | 45.9 | % | ||||||||||
Income tax expense | (619 | ) | (948 | ) | 329 | (34.7 | )% | ||||||||
Equity in earnings of an investee | 31 | 13 | 18 | 138.5 | % | ||||||||||
Income before gain on sale of real estate | 76,380 | 51,812 | 24,568 | 47.4 | % | ||||||||||
Gain on sale of real estate | 9,348 | — | 9,348 | 100.0 | % | ||||||||||
Net income | 85,728 | 51,812 | 33,916 | 65.5 | % | ||||||||||
Preferred distributions | — | (5,166 | ) | 5,166 | (100.0 | )% | |||||||||
Net income available for common shareholders | $ | 85,728 | $ | 46,646 | $ | 39,082 | 83.8 | % | |||||||
Weighted average shares outstanding (basic) | 164,149 | 157,217 | 6,932 | 4.4 | % | ||||||||||
Weighted average shares outstanding (diluted) | 164,188 | 157,263 | 6,925 | 4.4 | % | ||||||||||
Net income available for common shareholders per common share (basic and diluted) | $ | 0.52 | $ | 0.30 | $ | 0.22 | 73.3 | % |
For the Nine Months Ended September 30, | |||||||||||||||
Increase | % Increase | ||||||||||||||
2017 | 2016 | (Decrease) | (Decrease) | ||||||||||||
Revenues: | |||||||||||||||
Hotel operating revenues | $ | 1,392,995 | $ | 1,334,656 | $ | 58,339 | 4.4 | % | |||||||
Rental income - hotels | 22,854 | 22,810 | 44 | 0.2 | % | ||||||||||
Rental income - travel centers | 217,420 | 206,950 | 10,470 | 5.1 | % | ||||||||||
Total rental income | 240,274 | 229,760 | 10,514 | 4.6 | % | ||||||||||
FF&E reserve income | 3,524 | 3,517 | 7 | 0.2 | % | ||||||||||
Expenses: | |||||||||||||||
Hotel operating expenses | 965,546 | 923,239 | 42,307 | 4.6 | % | ||||||||||
Depreciation and amortization - hotels | 179,503 | 167,485 | 12,018 | 7.2 | % | ||||||||||
Depreciation and amortization - travel centers | 107,308 | 98,707 | 8,601 | 8.7 | % | ||||||||||
Total depreciation and amortization | 286,811 | 266,192 | 20,619 | 7.7 | % | ||||||||||
General and administrative | 76,097 | 91,127 | (15,030 | ) | (16.5 | )% | |||||||||
Acquisition related costs | — | 885 | (885 | ) | (100.0 | )% | |||||||||
Operating income | 308,339 | 286,490 | 21,849 | 7.6 | % | ||||||||||
Dividend income | 1,878 | 1,375 | 503 | 36.6 | % | ||||||||||
Interest income | 590 | 227 | 363 | 159.9 | % | ||||||||||
Interest expense | (135,329 | ) | (124,564 | ) | (10,765 | ) | 8.6 | % | |||||||
Loss on early extinguishment of debt | — | (228 | ) | 228 | (100.0 | )% | |||||||||
Income before income taxes, equity earnings of an investee and gain on sale of real estate | 175,478 | 163,300 | 12,178 | 7.5 | % | ||||||||||
Income tax expense | (1,761 | ) | (3,483 | ) | 1,722 | (49.4 | )% | ||||||||
Equity in earnings of an investee | 533 | 107 | 426 | 398.1 | % | ||||||||||
Income before gain on sale of real estate | 174,250 | 159,924 | 14,326 | 9.0 | % | ||||||||||
Gain on sale of real estate | 9,348 | — | 9,348 | 100.0 | % | ||||||||||
Net income | 183,598 | 159,924 | 23,674 | 14.8 | % | ||||||||||
Preferred distributions | (1,435 | ) | (15,498 | ) | 14,063 | (90.7 | )% | ||||||||
Excess of liquidation preference over carrying value of preferred shares redeemed | (9,893 | ) | — | (9,893 | ) | n/m | |||||||||
Net income available for common shareholders | $ | 172,270 | $ | 144,426 | $ | 27,844 | 19.3 | % | |||||||
Weighted average shares outstanding (basic) | 164,131 | 153,357 | 10,774 | 7.0 | % | ||||||||||
Weighted average shares outstanding (diluted) | 164,168 | 153,390 | 10,778 | 7.0 | % | ||||||||||
Net income available for common shareholders per common share (basic and diluted) | $ | 1.05 | $ | 0.94 | $ | 0.11 | 11.7 | % |
• | During the nine months ended September 30, 2017, we funded $4,638 for capital improvements to hotels under our Marriott No. 1 agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $1,000 for capital improvements under this agreement during the remainder of 2017 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase. |
• | During the nine months ended September 30, 2017, we funded $1,975 for capital improvements to hotels under our Marriott No. 234 agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $3,025 for capital improvements under this agreement during the remainder of 2017 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase. |
• | We did not fund any capital improvements to hotels under our InterContinental agreement during the nine months ended September 30, 2017. We currently expect to fund approximately $10,950 for capital improvements under this agreement during the remainder of 2017, approximately $28,000 during 2018 and approximately $20,000 during 2019 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase. |
• | Our Sonesta agreement does not require FF&E escrow deposits. Under our Sonesta agreement, we are required to fund capital expenditures made at our hotels. During the nine months ended September 30, 2017, we funded $21,892 for capital improvements to hotels included in our Sonesta agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $7,692 for renovations and other capital improvements under this agreement during the remainder of 2017, approximately $86,000 during 2018 and approximately $5,000 during 2019 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase to the extent amounts funded exceed threshold amounts, as defined in our Sonesta agreement. |
• | Our Wyndham agreement requires FF&E escrow deposits only if there are excess cash flows after payment of our minimum returns. No FF&E escrow deposits were required during the nine months ended September 30, 2017. During the nine months ended September 30, 2017, we funded $5,045 for capital improvements to hotels included in our Wyndham agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $1,800 for capital improvements under this agreement during the remainder of 2017 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase. |
• | Pursuant to an agreement we entered into with Carlson in June 2017, during the nine months ended September 30, 2017, we deposited $15,398 of net proceeds from the sale of two hotels into the FF&E reserve escrow account for our Carlson agreement and we deposited the remaining $8,030 of net proceeds from the sale of a third hotel into the FF&E reserve escrow account in October 2017. These amounts will be used to fund certain renovations to the remaining hotels operated under our Carlson agreement. We have agreed to fund up to $35,000 for renovation costs in excess of the net sales proceeds and available FF&E reserves. We currently expect to fund approximately $6,400 during 2018 and approximately $28,600 during 2019 for these renovations. As we fund these renovations, the annual minimum returns payable to us will increase. |
Rent / Return Coverage (3) | ||||||||||||||||||||||
Number of | Annual | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Operating Agreement | Number of | Rooms / | Minimum | September 30, | September 30, | |||||||||||||||||
Reference Name | Properties | Suites | Investment (1) | Return/Rent (2) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Marriott (No. 1) (4) | 53 | 7,610 | $ | 695,937 | $ | 69,100 | 1.50x | 1.59x | 1.26x | 1.39x | ||||||||||||
Marriott (No. 234) (5) | 68 | 9,120 | 1,003,364 | 106,538 | 1.22x | 1.23x | 1.12x | 1.13x | ||||||||||||||
Marriott (No. 5) (6) | 1 | 356 | 90,078 | 10,159 | 1.05x | 0.89x | 0.84x | 0.73x | ||||||||||||||
Subtotal / Average Marriott | 122 | 17,086 | 1,789,379 | 185,797 | 1.31x | 1.34x | 1.16x | 1.21x | ||||||||||||||
InterContinental (7) | 99 | 16,237 | 2,035,813 | 188,920 | 1.25x | 1.36x | 1.14x | 1.21x | ||||||||||||||
Sonesta (8) | 49 | 8,371 | 1,444,439 | 108,973 | 0.83x | 1.01x | 0.75x | 0.82x | ||||||||||||||
Wyndham (9) | 22 | 3,579 | 391,804 | 28,808 | 1.15x | 1.17x | 0.83x | 0.94x | ||||||||||||||
Hyatt (10) | 22 | 2,724 | 301,942 | 22,037 | 1.17x | 1.12x | 1.14x | 1.17x | ||||||||||||||
Carlson (11) | 8 | 1,579 | 187,070 | 12,920 | 1.73x | 1.66x | 1.35x | 1.25x | ||||||||||||||
Morgans (12) | 1 | 372 | 120,000 | 7,595 | 0.97x | 1.13x | 0.86x | 1.07x | ||||||||||||||
Subtotal / Average Hotels | 323 | 49,948 | 6,270,447 | 555,050 | 1.19x | 1.27x | 1.05x | 1.12x | ||||||||||||||
TA (No. 1) (13) | 40 | N/A | 672,884 | 52,410 | 1.80x | 1.88x | 1.58x | 1.67x | ||||||||||||||
TA (No. 2) (14) | 40 | N/A | 676,562 | 53,299 | 1.69x | 1.73x | 1.50x | 1.53x | ||||||||||||||
TA (No. 3) (15) | 39 | N/A | 632,069 | 53,670 | 1.76x | 1.83x | 1.50x | 1.60x | ||||||||||||||
TA (No. 4) (16) | 40 | N/A | 614,323 | 54,046 | 1.60x | 1.78x | 1.41x | 1.58x | ||||||||||||||
TA (No. 5) (17) | 40 | N/A | 880,832 | 69,114 | 1.74x | 1.69x | 1.56x | 1.59x | ||||||||||||||
Subtotal / Average TA | 199 | N/A | 3,476,670 | 282,539 | 1.72x | 1.78x | 1.51x | 1.59x | ||||||||||||||
Total / Average | 522 | 49,948 | $ | 9,747,117 | $ | 837,589 | 1.37x | 1.44x | 1.21x | 1.25x |
(1) | Represents the historical cost of our properties plus capital improvements funded by us less impairment writedowns, if any, and excludes capital improvements made from FF&E reserves funded from hotel operations which do not result in increases in minimum returns or rents. |
(2) | Each of our management agreements or leases provides for payment to us of an annual minimum return or rent, respectively. Certain of these minimum payment amounts are secured by full or limited guarantees or security deposits as more fully described below. In addition, certain of our hotel management agreements provide for payment to us of additional amounts to the extent of available cash flows as defined in the management agreement. Payments of these additional amounts are not guaranteed or secured by deposits. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments necessary to record rent on a straight line basis. |
(3) | We define coverage as combined total property level revenues minus all property level expenses and FF&E reserve escrows which are not subordinated to minimum returns and rents due to us (which data is provided to us by our managers or tenants), divided by the minimum returns or rents due to us. Coverage amounts for our InterContinental and Sonesta agreements and our TA Nos. 1, 2, 3 and 4 leases include data for periods prior to our ownership of certain properties. Coverage amounts for our Carlson agreement excludes data for periods prior to our sale of certain hotels. |
(4) | We lease 53 Courtyard by Marriott® branded hotels in 24 states to one of our TRSs. The hotels are managed by a subsidiary of Marriott under a combination management agreement which expires in 2024; Marriott has two renewal options for 12 years each for all, but not less than all, of the hotels. |
(5) | We lease 68 of our Marriott branded hotels (one full service Marriott®, 35 Residence Inn by Marriott®, 18 Courtyard by Marriott®, 12 TownePlace Suites by Marriott® and two SpringHill Suites by Marriott® hotels) in 22 states to one of our TRSs. The hotels are managed by subsidiaries of Marriott under a combination management agreement which expires in 2025; Marriott has two renewal options for 10 years each for all, but not less than all, of the hotels. |
(6) | We lease one Marriott® branded hotel in Kauai, HI to a subsidiary of Marriott under a lease that expires in 2019. Marriott has four renewal options for 15 years each. On August 31, 2016, Marriott notified us that it will not exercise its renewal option at the expiration of the current lease term ending on December 31, 2019. This lease is guaranteed by Marriott and provides for increases in the annual minimum rent payable to us based on changes in the consumer price index. |
(7) | We lease our 98 InterContinental branded hotels (19 Staybridge Suites®, 61 Candlewood Suites®, two InterContinental®, 10 Crowne Plaza®, three Holiday Inn® and three Kimpton® Hotels & Restaurants) in 28 states in the U.S. and Ontario, Canada to one of our TRSs. These 98 hotels are managed by subsidiaries of InterContinental under a combination management agreement. We lease one additional InterContinental® branded hotel in Puerto Rico to a subsidiary of InterContinental. The annual minimum return amount presented in the table on page 34 includes $7,904 of minimum rent related to the leased Puerto Rico hotel. The management agreement and the lease expire in 2036; InterContinental has two renewal options for 15 years each for all, but not less than all, of the hotels. |
(8) | We lease our 49 Sonesta branded hotels (five Royal Sonesta Hotels®, five Sonesta Hotels & Resorts® and 39 Sonesta ES Suites® hotels) in 26 states to one of our TRSs. The hotels are managed by Sonesta under a combination management agreement which expires in 2037; Sonesta has two renewal options for 15 years each for all, but not less than all, of the hotels. |
(9) | We lease our 22 Wyndham branded hotels (six Wyndham Hotels and Resorts® and 16 Hawthorn Suites® hotels) in 14 states to one of our TRSs. The hotels are managed by a subsidiary of Wyndham under a combination management agreement which expires in 2038; Wyndham has two renewal options for 15 years each for all, but not less than all, of the hotels. We also lease 48 vacation units in one of the managed hotels to Wyndham Vacation under a lease that expires in 2037; Wyndham Vacation has two renewal options for 15 years each for all, but not less than all, of the vacation units. The lease is guaranteed by Wyndham and provides for rent increases of 3% per annum. The annual minimum return amount presented in the table on page 34 includes $1,407 of minimum rent related to the Wyndham Vacation lease. |
(10) | We lease our 22 Hyatt Place® branded hotels in 14 states to one of our TRSs. The hotels are managed by a subsidiary of Hyatt under a combination management agreement that expires in 2030; Hyatt has two renewal options for 15 years each for all, but not less than all, of the hotels. |
(11) | We lease our 8 Carlson branded hotels (four Radisson® Hotels & Resorts and four Country Inns & Suites® hotels) in six states to one of our TRSs. The hotels are managed by a subsidiary of Carlson under a combination management agreement that, prior to the amendment described below, was scheduled to expire in 2030; Carlson has two renewal options for 15 years each for all, but not less than all, of the hotels. In June 2017, we amended our agreement with Carlson whereby we and Carlson agreed to sell three hotels with an aggregate of 511 rooms. We sold these hotels during the three months ended September 2017. The net proceeds from the sales of these three hotels will be used to fund certain renovations to the remaining hotels operated under our Carlson agreement and we have agreed to fund up to $35,000 for renovation costs in excess of the net sales proceeds and available FF&E reserves. Our annual minimum return and the limited guarantee cap under our Carlson agreement will increase by 8% of amounts we fund. In addition, the initial term of the management agreement and the limited guarantee provided by Carlson were extended to December 31, 2035. |
(12) | We lease The Clift Hotel® in San Francisco, CA to a subsidiary of Morgans. This lease is scheduled to expire in 2103 and requires annual rent to us of $7,595, which amount is scheduled to increase on October 14, 2019 and every five years thereafter based upon consumer price index increases of no less than 10% and no more than 20% at the time of each increase. Although the terms of this lease might have qualified this lease as a direct financing lease under GAAP, we recognize the rental income we receive from Morgans on a cash basis because of uncertainty regarding our collection of future rent increases. In December 2016, we notified Morgans that the closing of its merger with SBE without our consent was a breach of its lease obligations and shortly thereafter we commenced an unlawful detainer action in the California state courts to compel Morgans and SBE to surrender possession of this hotel to us. We are pursuing this litigation and are in discussions with Morgans and SBE regarding this hotel. The outcome of this pending litigation and our discussions with Morgans and SBE is not assured, but we believe Morgans may surrender to us possession of this hotel or that the court will determine that Morgans and SBE have breached the lease. We also believe that this hotel may require substantial capital investment to remain competitive in its market. The continuation of our dispute with Morgans and SBE is causing us to incur legal fees. Despite the continuation of this dispute, Morgans has paid the rents due to us through November 7, 2017; however, we believe that we may suffer some loss of future rent from this hotel, at least until this hotel is renovated and operations improve. |
(13) | We lease 40 travel centers (36 TravelCenters of America® branded travel centers and four Petro Stopping Centers® branded travel centers) in 29 states to a subsidiary of TA under a lease that expires in 2029; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers. In addition to the payment of our minimum rent, this lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent of $27,421 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA. |
(14) | We lease 40 travel centers (38 TravelCenters of America® branded travel centers and two Petro Stopping Centers® branded travel centers) in 27 states to a subsidiary of TA under a lease that expires in 2028; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers. In addition to the payment of our minimum rent, this lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent of $29,107 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA. |
(15) | We lease 39 travel centers (38 TravelCenters of America® branded travel centers and one Petro Stopping Centers® branded travel center) in 29 states to a subsidiary of TA under a lease that expires in 2026; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers. In addition to the payment of our minimum rent, this lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent of $29,324 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA. |
(16) | We lease 40 travel centers (37 TravelCenters of America® branded travel centers and three Petro Stopping Centers® branded travel centers) in 28 states to a subsidiary of TA under a lease that expires in 2030; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers. In addition to the payment of our minimum rent, this lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent of $21,233 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA. |
(17) | We lease 40 Petro Stopping Centers® branded travel centers in 25 states to a subsidiary of TA under a lease that expires in 2032; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers. In addition to the payment of our minimum rent, this lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2012 non-fuel revenues). TA’s previously deferred rent of $42,915 is due on June 30, 2024. This lease is guaranteed by TA. |
No. of | No. of Rooms / | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
Hotels | Suites | 2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||
ADR | ||||||||||||||||||||||||||||
Marriott (No. 1) | 53 | 7,610 | $ | 131.54 | $ | 134.12 | (1.9 | %) | $ | 131.82 | $ | 133.42 | (1.2 | %) | ||||||||||||||
Marriott (No. 234) | 68 | 9,120 | 133.48 | 132.04 | 1.1 | % | 132.57 | 130.64 | 1.5 | % | ||||||||||||||||||
Marriott (No. 5) | 1 | 356 | 272.72 | 254.86 | 7.0 | % | 268.89 | 253.20 | 6.2 | % | ||||||||||||||||||
Subtotal / Average Marriott | 122 | 17,086 | 136.08 | 135.98 | 0.1 | % | 135.65 | 134.82 | 0.6 | % | ||||||||||||||||||
InterContinental (1) | 99 | 16,237 | 120.63 | 120.77 | (0.1 | %) | 119.81 | 119.55 | 0.2 | % | ||||||||||||||||||
Sonesta (1) | 49 | 8,371 | 138.29 | 140.34 | (1.5 | %) | 140.06 | 139.70 | 0.3 | % | ||||||||||||||||||
Wyndham | 22 | 3,579 | 104.90 | 102.00 | 2.8 | % | 100.81 | 99.18 | 1.6 | % | ||||||||||||||||||
Hyatt | 22 | 2,724 | 108.48 | 108.31 | 0.2 | % | 110.09 | 109.73 | 0.3 | % | ||||||||||||||||||
Carlson (1) | 8 | 1,579 | 130.51 | 125.47 | 4.0 | % | 126.52 | 120.66 | 4.9 | % | ||||||||||||||||||
Morgans | 1 | 372 | 259.71 | 271.14 | (4.2 | %) | 262.86 | 269.78 | (2.6 | %) | ||||||||||||||||||
All Hotels Total / Average | 323 | 49,948 | $ | 128.27 | $ | 128.43 | (0.1 | %) | $ | 127.87 | $ | 127.26 | 0.5 | % | ||||||||||||||
OCCUPANCY | ||||||||||||||||||||||||||||
Marriott (No. 1) | 53 | 7,610 | 74.2 | % | 74.7 | % | -0.5 pts | 70.5 | % | 72.1 | % | -1.6 pts | ||||||||||||||||
Marriott (No. 234) | 68 | 9,120 | 77.4 | % | 78.8 | % | -1.4 pts | 76.8 | % | 77.8 | % | -1.0 pts | ||||||||||||||||
Marriott (No. 5) | 1 | 356 | 90.4 | % | 91.8 | % | -1.4 pts | 88.7 | % | 88.6 | % | 0.1 pts | ||||||||||||||||
Subtotal / Average Marriott | 122 | 17,086 | 76.3 | % | 77.2 | % | -0.9 pts | 74.2 | % | 75.5 | % | -1.3 pts | ||||||||||||||||
InterContinental (1) | 99 | 16,237 | 84.9 | % | 86.0 | % | -1.1 pts | 82.3 | % | 82.8 | % | -0.5 pts | ||||||||||||||||
Sonesta (1) | 49 | 8,371 | 74.7 | % | 75.0 | % | -0.3 pts | 71.7 | % | 70.3 | % | 1.4 pts | ||||||||||||||||
Wyndham | 22 | 3,579 | 75.4 | % | 77.2 | % | -1.8 pts | 71.6 | % | 73.9 | % | -2.3 pts | ||||||||||||||||
Hyatt | 22 | 2,724 | 84.4 | % | 82.7 | % | 1.7 pts | 83.5 | % | 82.2 | % | 1.3 pts | ||||||||||||||||
Carlson (1) | 8 | 1,579 | 79.3 | % | 82.4 | % | -3.1 pts | 76.2 | % | 77.3 | % | -1.1 pts | ||||||||||||||||
Morgans | 1 | 372 | 92.2 | % | 94.3 | % | -2.1 pts | 89.1 | % | 94.2 | % | -5.1 pts | ||||||||||||||||
All Hotels Total / Average | 323 | 49,948 | 79.4 | % | 80.2 | % | -0.8 pts | 76.9 | % | 77.4 | % | -0.5 pts | ||||||||||||||||
RevPAR | ||||||||||||||||||||||||||||
Marriott (No. 1) | 53 | 7,610 | $ | 97.60 | $ | 100.19 | (2.6 | %) | $ | 92.93 | $ | 96.20 | (3.4 | %) | ||||||||||||||
Marriott (No. 234) | 68 | 9,120 | 103.31 | 104.05 | (0.7 | %) | 101.81 | 101.64 | 0.2 | % | ||||||||||||||||||
Marriott (No. 5) | 1 | 356 | 246.54 | 233.96 | 5.4 | % | 238.51 | 224.34 | 6.3 | % | ||||||||||||||||||
Subtotal / Average Marriott | 122 | 17,086 | 103.83 | 104.98 | (1.1 | %) | 100.65 | 101.79 | (1.1 | %) | ||||||||||||||||||
InterContinental (1) | 99 | 16,237 | 102.41 | 103.86 | (1.4 | %) | 98.60 | 98.99 | (0.4 | %) | ||||||||||||||||||
Sonesta (1) | 49 | 8,371 | 103.30 | 105.26 | (1.9 | %) | 100.42 | 98.21 | 2.3 | % | ||||||||||||||||||
Wyndham | 22 | 3,579 | 79.09 | 78.74 | 0.4 | % | 72.18 | 73.29 | (1.5 | %) | ||||||||||||||||||
Hyatt | 22 | 2,724 | 91.56 | 89.57 | 2.2 | % | 91.93 | 90.20 | 1.9 | % | ||||||||||||||||||
Carlson (1) | 8 | 1,579 | 103.49 | 103.39 | 0.1 | % | 96.41 | 93.27 | 3.4 | % | ||||||||||||||||||
Morgans | 1 | 372 | 239.45 | 255.69 | (6.4 | %) | 234.21 | 254.13 | (7.8 | %) | ||||||||||||||||||
All Hotels Total / Average | 323 | 49,948 | $ | 101.85 | $ | 103.00 | (1.1 | %) | $ | 98.33 | $ | 98.50 | (0.2 | %) |
(1) | Operating data includes data for periods prior to our ownership of certain hotels and excludes data for periods prior to our sale of certain hotels. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net income available for common shareholders | $ | 85,728 | $ | 46,646 | $ | 172,270 | $ | 144,426 | |||||||||
Add (less): | Depreciation and amortization expense | 98,205 | 90,139 | 286,811 | 266,192 | ||||||||||||
Gain on sale of real estate (1) | (9,348 | ) | — | (9,348 | ) | — | |||||||||||
FFO available for common shareholders | 174,585 | 136,785 | 449,733 | 410,618 | |||||||||||||
Add: | Acquisition related costs (2) | — | 156 | — | 885 | ||||||||||||
Estimated business management incentive fees (3) | 873 | 25,036 | 38,243 | 56,272 | |||||||||||||
Loss on early extinguishment of debt (4) | — | 158 | — | 228 | |||||||||||||
Excess of liquidation preference over carrying value of preferred shares redeemed (5) | — | — | 9,893 | — | |||||||||||||
Normalized FFO available for common shareholders | $ | 175,458 | $ | 162,135 | $ | 497,869 | $ | 468,003 | |||||||||
Weighted average shares outstanding (basic) | 164,149 | 157,217 | 164,131 | 153,357 | |||||||||||||
Weighted average shares outstanding (diluted) (6) | 164,188 | 157,263 | 164,168 | 153,390 | |||||||||||||
Basic and diluted per common share amounts: | |||||||||||||||||
Net income available for common shareholders | $ | 0.52 | $ | 0.30 | $ | 1.05 | $ | 0.94 | |||||||||
FFO available for common shareholders | $ | 1.06 | $ | 0.87 | $ | 2.74 | $ | 2.68 | |||||||||
Normalized FFO available for common shareholders | $ | 1.07 | $ | 1.03 | $ | 3.03 | $ | 3.05 | |||||||||
Distributions declared per share | $ | 0.52 | $ | 0.51 | $ | 1.55 | $ | 1.52 |
(1) | We recorded a $9,348 gain on sale of real estate during the three months ended September 30, 2017 in connection with the sale of three hotels. |
(2) | Represents costs associated with our acquisition activities. Acquisition costs incurred during the 2017 periods have been capitalized in purchase accounting pursuant to a change in GAAP. |
(3) | Estimated incentive fees under our business management agreement calculated based on common share total return, as defined, are included in general and administrative expense in our condensed consolidated statements of comprehensive income. In calculating net income in accordance with GAAP, we recognize estimated business management incentive fee expense, if any, each quarter. Although we recognize this expense, if any, each quarter for purposes of calculating net income, we do not include these amounts in the calculation of Normalized FFO available for common shareholders until the fourth quarter, which is when the expense amount for the year is determined. Incentive fees for 2017, if any, will be paid in cash in January 2018. |
(4) | We recorded losses of $158 and $228 on early extinguishment of debt during the three and nine months ended September 30, 2016, respectively, in connection with the redemption of certain senior unsecured notes. |
(5) | In February 2017, we redeemed all 11,600,000 of our outstanding 7.125% Series D cumulative redeemable preferred shares at the stated liquidation preference of $25.00 per share plus accrued and unpaid distributions to the date of redemption. The liquidation preference of the redeemed shares exceeded the carrying amount for the redeemed shares as of the date of redemption by $9,893 and we reduced net income available for common shareholders in the nine months ended September 30, 2017 by that excess amount. |
(6) | Represents weighted average common shares adjusted to reflect the potential dilution of unvested share awards. |
Principal Balance | Annual Interest Rate | Annual Interest Expense | Maturity | Interest Payments Due | |||||||||
$ | 350,000 | 6.700 | % | (1) | $ | 23,450 | 2018 | Semi-Annually | |||||
400,000 | 4.250 | % | 17,000 | 2021 | Semi-Annually | ||||||||
500,000 | 5.000 | % | 25,000 | 2022 | Semi-Annually | ||||||||
500,000 | 4.500 | % | 22,500 | 2023 | Semi-Annually | ||||||||
350,000 | 4.650 | % | 16,275 | 2024 | Semi-Annually | ||||||||
350,000 | 4.500 | % | 15,750 | 2025 | Semi-Annually | ||||||||
350,000 | 5.250 | % | 18,375 | 2026 | Semi-Annually | ||||||||
400,000 | 4.950 | % | 19,800 | 2027 | Semi-Annually | ||||||||
$ | 3,200,000 | $ | 158,150 |
Impact of Increase in Interest Rates | |||||||||||||||
Interest Rate Per Year (1) | Outstanding Debt | Total Interest Expense Per Year | Annual Per Common Share Impact (2) | ||||||||||||
At September 30, 2017 | 2.38 | % | $ | 858,000 | $ | 20,420 | $ | 0.12 | |||||||
100 basis point increase | 3.38 | % | $ | 858,000 | $ | 29,000 | $ | 0.18 |
Impact of Increase in Interest Rates | |||||||||||||||
Interest Rate Per Year (1) | Outstanding Debt | Total Interest Expense Per Year | Annual Per Common Share Impact (2) | ||||||||||||
At September 30, 2017 | 2.36 | % | $ | 1,400,000 | $ | 33,040 | $ | 0.20 | |||||||
100 basis point increase | 3.36 | % | $ | 1,400,000 | $ | 47,040 | $ | 0.29 |
(1) | Weighted average based on the interest rates and the respective outstanding borrowings (assuming fully drawn) as of September 30, 2017. |
(2) | Based on diluted weighted average common shares outstanding for the nine months ended September 30, 2017. |
• | OUR HOTEL MANAGERS’ OR TENANTS’ ABILITIES TO PAY THE CONTRACTUAL AMOUNTS OF RETURNS OR RENTS DUE TO US, |
• | OUR ABILITY TO COMPETE FOR ACQUISITIONS EFFECTIVELY, |
• | OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS, |
• | OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND THE AMOUNT OF SUCH DISTRIBUTIONS, |
• | OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL, |
• | OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL, |
• | OUR INTENT TO MAKE IMPROVEMENTS TO CERTAIN OF OUR PROPERTIES AND THE SUCCESS OF OUR HOTEL RENOVATIONS TO IMPROVE OUR HOTELS' RATES AND OCCUPANCIES, |
• | OUR ABILITY TO ENGAGE AND RETAIN QUALIFIED MANAGERS AND TENANTS FOR OUR HOTELS AND TRAVEL CENTERS ON SATISFACTORY TERMS, |
• | THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY, |
• | OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT, |
• | OUR CREDIT RATINGS, |
• | THE ABILITY OF TA TO PAY CURRENT AND DEFERRED RENT AMOUNTS AND OTHER OBLIGATIONS DUE TO US, |
• | OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF RMR INC., |
• | OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF AIC AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC, |
• | OUR QUALIFICATION FOR TAXATION AS A REIT, AND |
• | OTHER MATTERS. |
• | THE IMPACT OF CONDITIONS AND CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR MANAGERS AND TENANTS, |
• | COMPETITION WITHIN THE REAL ESTATE, HOTEL, TRANSPORTATION AND TRAVEL CENTER INDUSTRIES, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED, |
• | COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS AFFECTING THE REAL ESTATE, HOTEL, TRANSPORTATION AND TRAVEL CENTER INDUSTRIES, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS, |
• | LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES, |
• | ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL, AND |
• | ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, TA, SONESTA, RMR INC., RMR LLC, AIC AND OTHERS AFFILIATED WITH THEM. |
• | OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS, THE CAPITAL COSTS WE INCUR TO MAINTAIN OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED, |
• | THE SECURITY DEPOSITS WHICH WE HOLD ARE NOT IN SEGREGATED CASH ACCOUNTS OR OTHERWISE SEPARATE FROM OUR OTHER ASSETS AND LIABILITIES. ACCORDINGLY, WHEN WE RECORD INCOME BY REDUCING OUR SECURITY DEPOSIT LIABILITIES, WE DO NOT RECEIVE ANY ADDITIONAL CASH PAYMENT. BECAUSE WE DO NOT RECEIVE ANY ADDITIONAL CASH PAYMENT AS WE APPLY SECURITY DEPOSITS TO COVER PAYMENT SHORTFALLS, THE FAILURE OF OUR MANAGERS OR TENANTS TO PAY MINIMUM RETURNS OR RENTS DUE TO US MAY REDUCE OUR CASH FLOWS AND OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS, |
• | AS OF SEPTEMBER 30, 2017, APPROXIMATELY 78% OF OUR AGGREGATE ANNUAL MINIMUM RETURNS AND RENTS WERE SECURED BY GUARANTEES OR SECURITY DEPOSITS FROM OUR MANAGERS AND TENANTS. THIS MAY IMPLY THAT THESE MINIMUM RETURNS AND RENTS WILL BE PAID. IN FACT, CERTAIN OF THESE GUARANTEES AND SECURITY DEPOSITS ARE LIMITED IN AMOUNT AND DURATION AND ALL THE GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITIES AND WILLINGNESS TO PAY. FURTHER, WYNDHAM'S GUARANTEE OF THE MINIMUM RETURNS DUE FROM OUR HOTELS THAT ARE MANAGED BY WYNDHAM WAS DEPLETED AS OF SEPTEMBER 30, 2017. WE DO NOT KNOW WHETHER WYNDHAM WILL CONTINUE TO PAY THE MINIMUM RETURNS DUE TO US DESPITE THE DEPLETED GUARANTEE OR IF WYNDHAM WILL DEFAULT ON ITS PAYMENTS. THE BALANCE OF OUR ANNUAL MINIMUM RETURNS AND RENTS AS OF SEPTEMBER 30, 2017 WAS NOT GUARANTEED NOR DO WE HOLD A SECURITY DEPOSIT WITH RESPECT TO THOSE AMOUNTS. WE CANNOT BE SURE OF THE FUTURE FINANCIAL PERFORMANCE OF OUR PROPERTIES AND WHETHER SUCH PERFORMANCE WILL COVER OUR MINIMUM RETURNS AND RENTS, WHETHER THE GUARANTEES OR SECURITY DEPOSITS WILL BE ADEQUATE TO COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS OR RENTS DUE TO US WHICH THEY GUARANTY OR SECURE, OR REGARDING OUR MANAGERS’, TENANTS’ OR GUARANTORS’ FUTURE ACTIONS IF |
• | WE HAVE RECENTLY RENOVATED CERTAIN HOTELS AND ARE CURRENTLY RENOVATING ADDITIONAL HOTELS. WE CURRENTLY EXPECT TO FUND APPROXIMATELY $32.5 MILLION DURING THE REMAINDER OF 2017 AND AN AGGREGATE OF APPROXIMATELY $174.0 MILLION IN 2018 AND 2019 FOR RENOVATIONS AND OTHER CAPITAL IMPROVEMENT COSTS AT CERTAIN OF OUR HOTELS AND THESE AMOUNTS WILL INCREASE IF AND AS WE CONCLUDE OUR PENDING AND OTHER ACQUISITIONS. THE COST OF CAPITAL PROJECTS ASSOCIATED WITH SUCH RENOVATIONS MAY BE GREATER THAN WE NOW ANTICIPATE. OPERATING RESULTS AT OUR HOTELS MAY DECLINE AS A RESULT OF HAVING ROOMS OUT OF SERVICE OR OTHER DISRUPTIONS DURING RENOVATIONS. ALSO, WHILE OUR FUNDING OF THESE CAPITAL PROJECTS WILL CAUSE OUR CONTRACTUAL MINIMUM RETURNS TO INCREASE, THE HOTELS’ OPERATING RESULTS MAY NOT INCREASE OR MAY NOT INCREASE TO THE EXTENT THAT THE MINIMUM RETURNS INCREASE. ACCORDINGLY, COVERAGE OF OUR MINIMUM RETURNS AT THESE HOTELS MAY REMAIN DEPRESSED FOR AN EXTENDED PERIOD, |
• | WE EXPECT TO PURCHASE FROM TA DURING THE REMAINDER OF 2017 APPROXIMATELY $16.1 MILLION OF CAPITAL IMPROVEMENTS TA EXPECTS TO MAKE TO THE TRAVEL CENTERS WE LEASE TO TA. PURSUANT TO THE TERMS OF THE APPLICABLE LEASES, THE ANNUAL RENT PAYABLE TO US BY TA WILL INCREASE AS A RESULT OF ANY SUCH PURCHASES. WE MAY ULTIMATELY PURCHASE MORE OR LESS THAN THIS BUDGETED AMOUNT. TA MAY NOT REALIZE RESULTS FROM ANY OF THESE CAPITAL IMPROVEMENTS WHICH EQUAL OR EXCEED THE INCREASED ANNUAL RENTS IT WILL BE OBLIGATED TO PAY TO US, WHICH COULD INCREASE THE RISK OF TA BEING UNABLE TO PAY AMOUNTS DUE TO US, |
• | HOTEL ROOM DEMAND AND TRUCKING ACTIVITY ARE OFTEN REFLECTIONS OF THE GENERAL ECONOMIC ACTIVITY IN THE COUNTRY AND IN THE GEOGRAPHIC AREAS WHERE OUR PROPERTIES ARE LOCATED. IF ECONOMIC ACTIVITY IN THE COUNTRY DECLINES, HOTEL ROOM DEMAND AND TRUCKING ACTIVITY MAY DECLINE AND THE OPERATING RESULTS OF OUR HOTELS AND TRAVEL CENTERS MAY DECLINE, THE FINANCIAL RESULTS OF OUR HOTEL MANAGERS AND OUR TENANTS, INCLUDING TA, MAY SUFFER AND THESE MANAGERS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS. ALSO, DEPRESSED OPERATING RESULTS FROM OUR PROPERTIES FOR EXTENDED PERIODS MAY RESULT IN THE OPERATORS OF SOME OR ALL OF OUR HOTELS AND OUR TRAVEL CENTERS BECOMING UNABLE OR UNWILLING TO MEET THEIR OBLIGATIONS OR THEIR GUARANTEES AND SECURITY DEPOSITS WE HOLD MAY BE EXHAUSTED, |
• | HOTEL AND OTHER COMPETITIVE FORMS OF TRAVEL LODGING SUPPLY GROWTH HAS BEEN INCREASING AND MAY AFFECT OUR HOTEL OPERATORS' ABILITY TO GROW ADR AND OCCUPANCY, AND ADR AND OCCUPANCY COULD DECLINE DUE TO INCREASED COMPETITION WHICH MAY CAUSE OUR HOTEL OPERATORS TO BECOME UNABLE TO PAY OUR RETURNS OR RENTS, |
• | IF THE CURRENT LEVEL OF COMMERCIAL ACTIVITY IN THE COUNTRY DECLINES, IF THE PRICE OF DIESEL FUEL INCREASES SIGNIFICANTLY, IF FUEL CONSERVATION MEASURES ARE INCREASED, IF FREIGHT BUSINESS IS DIRECTED AWAY FROM TRUCKING, IF TA IS UNABLE TO EFFECTIVELY COMPETE OR OPERATE ITS BUSINESS, IF FUEL EFFICIENCIES, THE USE OF ALTERNATIVE FUELS OR TRANSPORTATION TECHNOLOGIES REDUCE THE DEMAND FOR PRODUCTS AND SERVICES TA SELLS OR FOR VARIOUS OTHER REASONS, TA MAY BECOME UNABLE TO PAY CURRENT AND DEFERRED RENTS DUE TO US, |
• | OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES THAT GENERATE RETURNS OR CAN BE LEASED FOR RENTS WHICH EXCEED THEIR OPERATING AND CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING, MANAGEMENT CONTRACTS OR LEASE TERMS FOR NEW PROPERTIES, |
• | CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES AND ANY RELATED MANAGEMENT ARRANGEMENTS WE EXPECT TO ENTER MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS OR ARRANGEMENTS MAY CHANGE, |
• | AT SEPTEMBER 30, 2017, WE HAD $14.5 MILLION OF CASH AND CASH EQUIVALENTS, $542.0 MILLION AVAILABLE UNDER OUR $1.0 BILLION REVOLVING CREDIT FACILITY AND SECURITY DEPOSITS AND GUARANTEES COVERING SOME OF OUR MINIMUM RETURNS AND RENTS. THESE STATEMENTS MAY IMPLY THAT WE HAVE ABUNDANT WORKING CAPITAL AND LIQUIDITY. HOWEVER, OUR MANAGERS AND TENANTS MAY NOT BE ABLE TO FUND MINIMUM RETURNS AND RENTS DUE TO US FROM OPERATING OUR PROPERTIES OR FROM OTHER RESOURCES; IN THE PAST AND CURRENTLY, CERTAIN OF OUR TENANTS AND HOTEL MANAGERS HAVE IN FACT NOT PAID THE MINIMUM AMOUNTS DUE TO US FROM THEIR OPERATIONS OF OUR LEASED OR MANAGED PROPERTIES. ALSO, CERTAIN OF THE SECURITY DEPOSITS AND GUARANTEES WE HAVE TO COVER ANY SUCH SHORTFALLS ARE LIMITED IN AMOUNT AND DURATION, AND ANY SECURITY DEPOSITS WE APPLY FOR SUCH SHORTFALLS DO NOT RESULT IN ADDITIONAL CASH FLOWS TO US. OUR PROPERTIES REQUIRE, AND WE HAVE AGREED TO PROVIDE, SIGNIFICANT FUNDING FOR CAPITAL IMPROVEMENTS, RENOVATIONS AND OTHER MATTERS. ACCORDINGLY, WE MAY NOT HAVE SUFFICIENT WORKING CAPITAL OR LIQUIDITY, |
• | WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE, |
• | CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY, |
• | ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES, |
• | THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOAN MAY BE INCREASED TO UP TO $2.3 BILLION ON A COMBINED BASIS IN CERTAIN CIRCUMSTANCES; HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND TERM LOAN IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR, |
• | THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND TERM LOAN AND THE FACILITY FEE PAYABLE ON OUR REVOLVING CREDIT FACILITY ARE BASED ON OUR CREDIT RATINGS. FUTURE CHANGES IN OUR CREDIT RATINGS MAY CAUSE THE INTEREST AND FEES WE PAY TO INCREASE, |
• | WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS; HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET, |
• | THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS, |
• | WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., TA, SONESTA, AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE, |
• | RMR INC. MAY REDUCE THE AMOUNT OF ITS DISTRIBUTIONS TO ITS SHAREHOLDERS, INCLUDING US, |
• | MARRIOTT HAS NOTIFIED US THAT IT DOES NOT INTEND TO EXTEND ITS LEASE FOR OUR RESORT HOTEL ON KAUAI, HAWAII WHEN THAT LEASE EXPIRES ON DECEMBER 31, 2019 AND WE INTEND TO HAVE DISCUSSIONS WITH MARRIOTT ABOUT THE FUTURE OF THIS HOTEL. THESE STATEMENTS MAY IMPLY THAT MARRIOTT WILL NOT OPERATE THIS HOTEL IN THE FUTURE OR THAT WE MAY RECEIVE LESS CASH FLOW FROM THIS HOTEL IN THE FUTURE. OUR DISCUSSIONS WITH MARRIOTT HAVE ONLY RECENTLY BEGUN. AT THIS TIME WE CANNOT PREDICT HOW OUR DISCUSSIONS WITH |
• | WE HAVE ADVISED MORGANS THAT THE CLOSING OF ITS MERGER WITH SBE WAS IN VIOLATION OF OUR AGREEMENT WITH MORGANS, WE HAVE FILED AN ACTION FOR UNLAWFUL DETAINER AGAINST MORGANS AND SBE TO COMPEL MORGANS AND SBE TO SURRENDER POSSESSION OF THE SAN FRANCISCO HOTEL WHICH MORGANS HISTORICALLY LEASED FROM US, AND WE ARE IN DISCUSSIONS WITH MORGANS AND SBE REGARDING THIS MATTER. THE OUTCOME OF THIS PENDING LITIGATION AND OF OUR DISCUSSIONS WITH MORGANS AND SBE IS NOT ASSURED, BUT WE BELIEVE THAT MORGANS MAY SURRENDER POSSESSION OF THIS HOTEL OR THAT THE COURT WILL DETERMINE THAT MORGANS AND SBE HAVE BREACHED THE HISTORICAL LEASE. WE ALSO BELIEVE THAT THIS HOTEL MAY REQUIRE SUBSTANTIAL CAPITAL INVESTMENT TO REMAIN COMPETITIVE IN ITS MARKET. THE CONTINUATION OF OUR DISPUTE WITH MORGANS AND SBE REQUIRES US TO EXPEND LEGAL FEES AND THE RESULT OF THIS DISPUTE MAY CAUSE US SOME LOSS OF RENT, AT LEAST UNTIL THIS HOTEL MAY BE RENOVATED AND OPERATIONS IMPROVE. LITIGATION AND DISPUTES WITH TENANTS OFTEN PRODUCE UNEXPECTED RESULTS AND WE CAN PROVIDE NO ASSURANCE REGARDING THE RESULTS OF THIS DISPUTE. |
Maximum | |||||||||||
Total Number of | Approximate Dollar | ||||||||||
Shares Purchased | Value of Shares that | ||||||||||
Number of | as Part of Publicly | May Yet Be Purchased | |||||||||
Shares | Average Price | Announced Plans | Under the Plans or | ||||||||
Calendar Month | Purchased (1) | Paid per Share | or Programs | Programs | |||||||
September 2017 | 18,559 | $ | 27.98 | $ | — | $ | — | ||||
Total | 18,559 | $ | 27.98 | $ | — | $ | — | ||||
(1) | These common share withholdings and purchases were made to satisfy the tax withholding and payment obligations of certain of our officers and other RMR LLC employees in connection with the vesting of awards of our common shares. We withheld and purchased these shares at their fair market value based upon the trading price of our common shares at the close of trading on Nasdaq on the purchase date. |
Exhibit Number | Description | ||
3.1 | |||
3.2 | |||
4.1 | |||
4.2 | |||
4.3 | |||
4.4 | |||
4.5 | |||
4.6 | |||
4.7 |
4.8 | |||
4.9 | |||
4.10 | |||
4.11 | |||
4.12 | |||
4.13 | |||
10.1 | |||
10.2 | Representative Form of Management Agreement between Sonesta International Hotels Corporation and Cambridge TRS, Inc. (limited service). (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q/A, Amendment No. 2, for the quarter ended June 30, 2012.)(Schedule of applicable agreements filed herewith.) | ||
10.3 | |||
10.4 | |||
12.1 | |||
12.2 | |||
31.1 | |||
31.2 | |||
31.3 | |||
31.4 | |||
32.1 | |||
101.1 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) related notes to these financial statements, tagged as blocks of text and in detail. (Filed herewith.) |
HOSPITALITY PROPERTIES TRUST | |
/s/ John G. Murray | |
John G. Murray | |
President and Chief Operating Officer | |
Dated: November 8, 2017 | |
/s/ Mark L. Kleifges | |
Mark L. Kleifges | |
Chief Financial Officer and Treasurer | |
(Principal Financial and Accounting Officer) | |
Dated: November 8, 2017 |
By:_/s/ Mark L. Kleifges ___________ | Name: Mark L. Kleifges Title: Chief Financial Officer and Treasurer |
Owner | Hotel | Landlord | Date of Agreement | Effective Date | Invested Capital Amount | Section 2.02(1) Date | |||||||
Cambridge TRS, Inc. | Royal Sonesta Cambridge 40 Edwin H. Land Boulevard Cambridge, MA 02142 | HPT Cambridge LLC | January 31, 2012 | January 31, 2012 | $ | 120,000,000 | January 31, 2015 | ||||||
Cambridge TRS, Inc. | Royal Sonesta Harbor Court Baltimore 550 Light Street Baltimore, MD | Harbor Court Associates, LLC | May 31, 2012 | May 31, 2012 | $ | 47,296,000 | January 31, 2015 | ||||||
Cambridge TRS, Inc. | Sonesta Hotel Philadelphia 1800 Market Street Philadelphia, PA | HPT IHG-2 Properties Trust | June 18, 2012 | June 18, 2012 | $ | 32,500,000 | January 1, 2015 | ||||||
Cambridge TRS, Inc. | Royal Sonesta Houston Hotel 2222 West Loop South Houston, TX | HPT IHG-2 Properties Trust | July 16, 2012 | July 16, 2012 | $ | 70,671,350 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta Gwinnett Place 1775 Pleasant Hill Road Duluth, GA | HPT Cambridge LLC | February 26, 2013 | May 17, 2013 | $ | 31,000,000 | January 1, 2017 | ||||||
Cambridge TRS, Inc. | Royal Sonesta New Orleans 300 Bourbon Street New Orleans, LA | Royal Sonesta, Inc. | June 28, 2013 | June 28, 2013 | $ | 151,000,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta Fort Lauderdale 999 North Fort Lauderdale Beach Boulevard Fort Lauderdale, FL | HPT IHG-2 Properties Trust | May 30, 2014 | May 30, 2014 | $ | 65,000,000 | January 1, 2018 | ||||||
Cambridge TRS, Inc. | Sonesta Silicon Valley 1820 Barber Lane Milpitas, CA | HPT IHG-2 Properties Trust | December 5, 2016 | December 5, 2016 | $ | 46,000,000 | January 1, 2020 | ||||||
Cambridge TRS, Inc. | Royal Sonesta Chase Park Plaza 212-232 Kingshighway Boulevard St. Louis, MO | HPT IHG-2 Properties Trust | June 2, 2017 | June 2, 2017 | $ | 87,750,000 | January 1, 2021 |
Owner | Hotel | Landlord | Date of Agreement | Effective Date | Invested Capital Amount | Section 2.02(1) Date | |||||||
Cambridge TRS, Inc. | Sonesta ES Suites Burlington 11 Old Concord Road Burlington, MA | HPT IHG-2 Properties Trust | June 12, 2012 | June 12, 2012 | $ | 18,240,000 | January 31, 2015 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Orlando 8480 International Drive Orlando, FL | HPT IHG-2 Properties Trust | July 6, 2012 | July 9, 2012 | $ | 7,900,000 | January 31, 2015 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Andover 4 Technology Drive Andover, MA | HPT IHG-2 Properties Trust | July 25, 2012 | July 25, 2012 | $ | 17,100,000 | January 31, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Parsippany 61 Interpace Parkway Parsippany, NJ | HPT IHG-2 Properties Trust | July 30, 2012 | July 30, 2012 | $ | 22,312,500 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Somerset 260 Davidson Avenue Somerset, NJ | HPT IHG-2 Properties Trust | July 30, 2012 | August 1, 2012 | $ | 7,200,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Princeton 4375 U.S. Route 1 South Princeton, NJ | HPT IHG-2 Properties Trust | July 30, 2012 | August 3, 2012 | $ | 5,810,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Malvern 20 Morehall Road Malvern, PA | HPT IHG-2 Properties Trust | July 27, 2012 | August 6, 2012 | $ | 17,398,113 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Dublin 435 Metro Place South Dublin, OH | HPTMI Properties Trust | August 6, 2012 | August 11, 2012 | $ | 6,750,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Flagstaff 3440 Country Club Drive Flagstaff, AZ | HPTMI Properties Trust | August 6, 2012 | August 11, 2012 | $ | 5,625,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Houston 5190 Hidalgo Street Houston, TX | HPT IHG-2 Properties Trust | August 6, 2012 | August 13, 2012 | $ | 10,260,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Columbia 8844 Columbia 100 Parkway Columbia, MD | HPT IHG-2 Properties Trust | August 6, 2012 | August 14, 2012 | $ | 12,540,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Charlotte 7925 Forest Pine Drive Charlotte, NC | HPT IHG-2 Properties Trust | August 6, 2012 | August 16, 2012 | $ | 6,810,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites St. Louis 1855 Craigshire Road St. Louis, MO | HPT IHG-2 Properties Trust | August 6, 2012 | August 22, 2012 | $ | 3,780,000 | January 1, 2016 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Tucson 6477 East Speedway Boulevard Tucson, AZ | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 5,500,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Colorado Springs 3880 North Academy Boulevard Colorado Springs, CO | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 6,250,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Minneapolis 3040 Eagandale Place Eagan, MN | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 11,500,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Omaha 6990 Dodge Street Omaha, NE | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 6,000,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Princeton 4225 US Highway 1 South Brunswick – Princeton, NJ | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 13,500,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Somers Point 900 Mays Landing Road Somers Point, NJ | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 8,750,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Cincinnati 2670 Kemper Road Sharonville, OH | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 8,750,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Oklahoma City 4361 West Reno Avenue Oklahoma City, OK | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 13,250,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Burlington 35 Hurricane Lane Williston, VT | HPT IHG-2 Properties Trust | July 23, 2015 | July 23, 2015 | $ | 11,500,000 | January 1, 2019 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Cleveland Airport 1725 Rosbough Drive Middleburg Heights, OH | HPT IHG-2 Properties Trust | Februart | February 1, 2016 | February 1, 2016 | $ | 7,200,000 | January 1, 2020 | |||||
Cambridge TRS, Inc. | Sonesta ES Suites Westlake 30100 Clemens Road Westlake, OH | HPT IHG-2 Properties Trust | F | February 1, 2016 | February 1, 2016 | $ | 4,800,000 | January 1, 2020 | |||||
Cambridge TRS, Inc. | Sonesta ES Suites Birmingham 3 Greenhill Pkwy at U.S. Highway 280 Birmingham, AL | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 2,828,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Montgomery 1200 Hilmar Court Montgomery, AL | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 5,250,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Wilmington – Newark 240 Chapman Road Newark, DE | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 10,452,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Jacksonville 8365 Dix Ellis Trail Jacksonville, FL | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 7,803,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Ann Arbor 800 Victors Way Ann Arbor, MI | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 14,474,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites St. Louis – Chesterfield 15431 Conway Road Chesterfield, MO | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 9,080,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Cincinnati – Blue Ash 11401 Reed Hartman Highway Blue Ash, OH | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 11,599,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Cincinnati – Sharonville West 11689 Chester Road Cincinnati, OH | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 8,954,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Providence – Airport 500 Kilvert Street Warwick, RI | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 9,550,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Memphis 6141 Old Poplar Pike Memphis, TN | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 8,789,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Houston – NASA Clear Lake 525 Bay Area Boulevard Houston, TX | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 12,571,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Portland – Vancouver 8005 NE Parkway Drive Vancouver, WA | HPT IHG-2 Properties Trust | September 26, 2017 | September 26, 2017 | $ | 15,820,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Atlanta – Perimeter Center East 1901 Savoy Drive Atlanta, GA | HPT IHG-3 Properties LLC | September 26, 2017 | September 26, 2017 | $ | 10,410,000 | January 1, 2021 | ||||||
Cambridge TRS, Inc. | Sonesta ES Suites Chicago – Lombard 2001 South Highland Avenue Lombard, IL | HPT IHG-3 Properties LLC | September 26, 2017 | September 26, 2017 | $ | 10,150,000 | January 1, 2021 |
Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee | $ | 184,826 | $ | 226,993 | $ | 167,963 | $ | 199,036 | $ | 127,750 | $ | 153,219 | ||||||||||||
Fixed Charges | 135,329 | 161,913 | 144,898 | 139,486 | 145,954 | 136,111 | ||||||||||||||||||
Adjusted Earnings | $ | 320,155 | $ | 388,906 | $ | 312,861 | $ | 338,522 | $ | 273,704 | $ | 289,330 | ||||||||||||
Fixed Charges: | ||||||||||||||||||||||||
Interest on indebtedness and amortization of debt issuance costs and debt discounts and premiums | $ | 135,329 | $ | 161,913 | $ | 144,898 | $ | 139,486 | $ | 145,954 | $ | 136,111 | ||||||||||||
Ratio of Earnings to Fixed Charges | 2.37 | x | 2.40x | 2.16x | 2.43x | 1.88x | 2.13x |
Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||||
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee | $ | 184,826 | $ | 226,993 | $ | 167,963 | $ | 199,036 | $ | 127,750 | $ | 153,219 | ||||||||||||
Fixed Charges | 135,329 | 161,913 | 144,898 | 139,486 | 145,954 | 136,111 | ||||||||||||||||||
Adjusted Earnings | $ | 320,155 | $ | 388,906 | $ | 312,861 | $ | 338,522 | $ | 273,704 | $ | 289,330 | ||||||||||||
Fixed Charges: | ||||||||||||||||||||||||
Interest on indebtedness and amortization of debt issuance costs and debt discounts and premiums | $ | 135,329 | $ | 161,913 | $ | 144,898 | $ | 139,486 | $ | 145,954 | $ | 136,111 | ||||||||||||
Preferred distributions | 1,435 | 20,664 | 20,664 | 20,664 | 26,559 | 40,145 | ||||||||||||||||||
Combined Fixed Charges and Preferred distributions | $ | 136,764 | $ | 182,577 | $ | 165,562 | $ | 160,150 | $ | 172,513 | $ | 176,256 | ||||||||||||
Ratio of Earnings to Fixed Charges and Preferred distributions | 2.34 | x | 2.13x | 1.89x | 2.11x | 1.59x | 1.64x |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 8, 2017 | /s/ Barry M. Portnoy |
Barry M. Portnoy | |
Managing Trustee |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 8, 2017 | /s/ Adam D. Portnoy |
Adam D. Portnoy | |
Managing Trustee |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 8, 2017 | /s/ John G. Murray |
John G. Murray | |
President and Chief Operating Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 8, 2017 | /s/ Mark L. Kleifges |
Mark L. Kleifges | |
Chief Financial Officer and Treasurer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Barry M. Portnoy | /s/ John G. Murray | |
Barry M. Portnoy | John G. Murray | |
Managing Trustee | President and Chief Operating Officer | |
/s/ Adam D. Portnoy | /s/ Mark L. Kleifges | |
Adam D. Portnoy | Mark L. Kleifges | |
Managing Trustee | Chief Financial Officer and Treasurer | |
Date: November 8, 2017 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 07, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | HOSPITALITY PROPERTIES TRUST | |
Entity Central Index Key | 0000945394 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity filer Category | Large Accelerated Filer | |
Entity common Stock, Shares Outstanding | 164,349,141 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 200,000,000 | 200,000,000 |
Common shares, shares issued | 164,349,141 | 164,268,199 |
Common shares, shares outstanding | 164,349,141 | 164,268,199 |
Series D preferred shareholders' | ||
Preferred shares, par value (in dollars per share) | $ 0 | $ 0 |
Preferred shares, shares authorized | 100,000,000 | 100,000,000 |
Preferred shares, shares issued | 0 | 11,600,000 |
Preferred shares, shares outstanding | 0 | 11,600,000 |
Preferred shares, aggregate liquidation preference | $ 0 | $ 290,000 |
Dividend rate | 7.125% | 7.125% |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement [Abstract] | ||||
Interest expense, amortization of debt issuance costs and and debt discounts and premiums | $ 2,194 | $ 2,122 | $ 6,541 | $ 6,114 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Hospitality Properties Trust and its subsidiaries, or HPT, we, our or us, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2016, or our 2016 Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included in these condensed consolidated financial statements. These condensed consolidated financial statements include the accounts of HPT and our subsidiaries, all of which are 100% owned directly or indirectly by HPT. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. Reclassifications have been made to the prior years’ condensed consolidated financial statements to conform to the current year’s presentation. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets, impairment of real estate and the valuation of intangible assets. We have determined that each of our taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification™, or ASC. We have concluded that we must consolidate each of our TRSs because we are the entity with the power to direct the activities that most significantly impact the VIEs’ economic performance and we have the obligation to absorb losses and the right to receive benefits from each VIE that could be significant to the VIE, and are, therefore, the primary beneficiary of each VIE. The assets of our TRSs were $40,150 and $26,676 as of September 30, 2017 and December 31, 2016, respectively, and consist primarily of amounts due from, and working capital advances to, certain of their hotel managers. The liabilities of our TRSs were $139,276 and $101,602 as of September 30, 2017 and December 31, 2016, respectively, and consist primarily of security deposits they hold from and amounts payable to certain of their hotel managers. The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs. |
New Accounting Pronouncements |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements On January 1, 2017, we adopted FASB Accounting Standards Update, or ASU, No. 2017-01, Clarifying the Definition of a Business, which provides additional guidance on evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or of a business. The update defines three requirements for a set of assets and activities (collectively referred to as a “set”) to be considered a business: inputs, processes and outputs. As a result of the implementation of this update, certain property acquisitions, which under previous guidance were accounted for as business combinations, are now accounted for as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized as opposed to expensed under the previous guidance. On January 1, 2017, we adopted FASB ASU No. 2016-09, Compensation - Stock Compensation, which identifies areas for simplification involving several aspects of accounting for share based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The adoption of ASU No. 2016-09 did not have a material impact in our condensed consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU No. 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In August 2015, the FASB provided for a one-year deferral of the effective date for ASU No. 2014-09, which is now effective for us beginning January 1, 2018. The majority of our revenue is from hotels managed under TRS structures. We do not believe the standard will materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales of our managed hotels. A lesser portion of our revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU No. 2014-09. We are continuing to evaluate ASU No. 2014-09 (and related clarifying guidance issued by the FASB); however, we do not expect its adoption to have a significant impact on the amount or timing of our revenue recognition in our condensed consolidated financial statements. We currently expect to adopt the standard using the modified retrospective approach. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. This update is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted subject to certain conditions. Currently, changes in fair value of these investments are recorded through other comprehensive income. ASU No. 2016-01 states that these changes will be recorded through earnings. We are continuing to evaluate this guidance, but we expect the implementation of this guidance will affect how changes in the fair value of available for sale equity investments we hold are presented in our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. ASU No. 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the potential impact the adoption of ASU No. 2016-02 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect adoption of this guidance to have a material impact in our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents. Companies will show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheets. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon the adoption of ASU No. 2016-18, we will reconcile both cash and cash equivalents and restricted cash and restricted cash equivalents, whereas under the current guidance we explain the changes during the period for cash and cash equivalents only. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which clarifies which changes to the terms or conditions of a share based payment award are subject to the guidance on modification accounting under ASC 718. Entities would apply the modification accounting guidance unless the value, vesting requirements and classification of a share based payment award are the same immediately before and after a change to the terms or conditions of the award. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We are continuing to evaluate ASU No. 2017-09; however, we do not expect its adoption to have a material impact in our condensed consolidated financial statements. |
Revenue Recognition |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income. We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided. We report rental income for leased hotels and travel centers in our condensed consolidated statements of comprehensive income. We recognize rental income from operating leases on a straight line basis over the term of the lease agreements except for one lease in which there is uncertainty regarding the collection of scheduled future rent increases; see Note 8 for further information regarding this lease with Morgans Hotel Group, or Morgans. Rental income includes $3,087 and $9,208 for the three and nine months ended September 30, 2017, respectively, and $2,932 and $10,377 for the three and nine months ended September 30, 2016, respectively, of adjustments necessary to record scheduled rent increases under certain of our leases, the deferred rent obligations payable to us under our leases with TravelCenters of America LLC, or TA, and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis. See Notes 8 and 10 for further information regarding our TA leases. Due from related persons includes $51,161 and $42,254 and other assets includes $2,580 and $2,279 of straight line rent receivables at September 30, 2017 and December 31, 2016, respectively. We determine percentage rent due to us under our leases annually and recognize it when all contingencies have been met and the rent is earned, which is generally at year end. We had deferred estimated percentage rent of $435 and $1,384 for the three and nine months ended September 30, 2017, respectively, and $408 and $937 for the three and nine months ended September 30, 2016, respectively. We own all the FF&E reserve (as defined in Note 8) escrows for our hotels. We report deposits by our third party tenants into the escrow accounts as FF&E reserve income. We do not report the amounts which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income. |
Weighted Average Common Shares |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Common Shares | Weighted Average Common Shares The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share:
|
Shareholders' Equity |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Distributions On January 17, 2017, we paid a $0.4453 per share distribution, or $5,166, to our Series D preferred shareholders. On February 21, 2017, we paid a regular quarterly distribution to common shareholders of record on January 23, 2017 of $0.51 per share, or $83,777. On May 18, 2017, we paid a regular quarterly distribution to common shareholders of record on April 21, 2017 of $0.52 per share, or $85,419. On August 17, 2017, we paid a regular quarterly distribution to common shareholders of record on July 24, 2017 of $0.52 per share, or $85,427. On October 12, 2017, we declared a regular quarterly dividend to common shareholders of record on October 23, 2017 of $0.52 per share, or $85,462. We expect to pay this amount on or about November 16, 2017. Preferred Shares On February 10, 2017, we redeemed all 11,600,000 of our outstanding 7.125% Series D cumulative redeemable preferred shares at the stated liquidation preference of $25.00 per share plus accrued and unpaid distributions to the date of redemption (an aggregate of $291,435). We reduced net income available for common shareholders for the nine months ended September 30, 2017 by $9,893, which represents the amount by which the liquidation preference for our 7.125% Series D cumulative redeemable preferred shares that were redeemed during the period exceeded our carrying amount for those preferred shares as of the date of redemption. Common Share Grants and Purchases On June 15, 2017, we granted 3,000 of our common shares, valued at $30.12 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to each of our five Trustees as part of their annual compensation. On June 30, 2017, we purchased an aggregate of 499 of our common shares valued at $29.15 per common share, the closing price of our common shares on Nasdaq on that day, from two former employees of The RMR Group LLC, or RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. On September 14, 2017, we granted an aggregate of 85,000 of our common shares to our officers and certain other employees of RMR LLC valued at $28.08 per share, the closing price of our common shares on Nasdaq on that day. On September 19, 2017, we purchased an aggregate of 18,559 of our common shares for $27.98 per common share, the closing price of our common shares on Nasdaq on that day, from certain of our officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Cumulative Other Comprehensive Income Cumulative other comprehensive income represents the unrealized net gain on our available for sale equity investments and our share of the comprehensive income of Affiliates Insurance Company, or AIC. See Notes 10 and 13 for further information regarding these investments. |
Indebtedness |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Our principal debt obligations at September 30, 2017 were: (1) our $458,000 of outstanding borrowings under our $1,000,000 unsecured revolving credit facility; (2) our $400,000 unsecured term loan; and (3) an aggregate outstanding principal amount of $3,200,000 of public issuances of unsecured senior notes. Our $1,000,000 revolving credit facility is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is July 15, 2018 and, subject to our payment of an extension fee and meeting other conditions, we have the option to extend the stated maturity date of our revolving credit facility by one year to July 15, 2019. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. We are required to pay interest on borrowings under our revolving credit facility at the rate of LIBOR plus a premium, which was 110 basis points as of September 30, 2017. We also pay a facility fee, which was 20 basis points per annum at September 30, 2017, on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2017, the annual interest rate for the amount outstanding under our revolving credit facility was 2.34%. The weighted average annual interest rate for borrowings under our revolving credit facility was 2.33% and 2.17% for the three and nine months ended September 30, 2017, respectively, and 1.60% and 1.55% for the three and nine months ended September 30, 2016, respectively. As of September 30, 2017 and November 7, 2017, we had $458,000 and $330,000 outstanding and $542,000 and $670,000 available under our revolving credit facility, respectively. Our revolving credit facility is governed by a credit agreement with a syndicate of institutional lenders, which also governs our term loan. Our $400,000 term loan, which matures on April 15, 2019, is prepayable without penalty at any time. We are required to pay interest on the amounts under our term loan at the rate of LIBOR plus a premium, which was 120 basis points as of September 30, 2017. The interest rate premium is subject to adjustment based on changes to our credit ratings. As of September 30, 2017, the annual interest rate for the amount outstanding under our term loan was 2.44%. The weighted average annual interest rate for borrowings under our term loan was 2.43% and 2.20% for the three and nine months ended September 30, 2017, respectively, and 1.69% and 1.65% for the three and nine months ended September 30, 2016, respectively. Our credit agreement also includes a feature under which maximum aggregate borrowings may be increased up to $2,300,000 on a combined basis in certain circumstances. Our credit agreement and our notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager. Our credit agreement and our senior notes indentures and their supplements also contain a number of covenants, including covenants that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of our credit agreement and our senior notes indentures and their supplements at September 30, 2017. On January 13, 2017, we issued $600,000 aggregate principal amount of senior notes in public offerings, which included $200,000 principal amount of 4.500% senior notes due 2023 and $400,000 principal amount of 4.950% senior notes due 2027. Net proceeds from these offerings were $593,228 after discounts, premiums and expenses. On March 15, 2017, we repurchased at par plus accrued interest $8,431 of the outstanding principal amount of our 3.80% convertible senior notes due 2027, which were tendered by the holders of these notes for repurchase by us. On April 24, 2017, we redeemed at par plus accrued interest the remaining $47 of the outstanding principal amount of these notes. On October 26, 2017, we issued $400,000 principal amount of 3.950% senior notes due 2028 in a public offering. Net proceeds from this offering were $388,244 after discounts and expenses. On October 29, 2017, we redeemed at par all of our outstanding 6.70% senior notes due 2018 for a redemption price equal to the principal amount of $350,000, plus accrued and unpaid interest. |
Real Estate Properties |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties | Real Estate Properties At September 30, 2017, we owned 323 hotels and 199 travel centers. During the nine months ended September 30, 2017, we funded $111,966 for improvements to certain of our properties which, pursuant to the terms of our management and lease agreements with our hotel managers and tenants, resulted in increases in our contractual annual minimum returns and rents of $7,132. See Notes 8 and 10 for further information about our management and lease agreements and our fundings of improvements to certain of our properties. Acquisitions During the nine months ended September 30, 2017, we acquired 20 hotels, one travel center, a land parcel adjacent to one of our hotels and land and certain improvements at a travel center we leased from a third party and subleased to TA. We accounted for these transactions as acquisitions of assets. Our allocation of the purchase price of each of these acquisitions based on the estimated fair value of the acquired assets and assumed liabilities is presented in the table below.
Dispositions During the three months ended September 30, 2017, we sold three of our Carlson Hotels Worldwide, or Carlson, branded hotels. On August 1, 2017, we sold our 159 room Radisson hotel located in Chandler, AZ for net proceeds of $9,085; and we recorded a gain on this sale of $4,336 during the three months ended September 30, 2017. On August 31, 2017, we sold our 143 room Country Inn & Suites hotel located in Naperville, IL for net proceeds of $6,313; and we recorded a gain on this sale of $2,303 during the three months ended September 30, 2017. On September 22, 2017, we sold our 209 room Park Plaza hotel located in Bloomington, MN for net proceeds of $8,030; and we recorded a gain on this sale of $2,709 during the three months ended September 30, 2017. See Note 8 for further information regarding our Carlson agreement. |
Hotel Management Agreements and Leases |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Leases [Abstract] | |
Hotel Management Agreements and Leases | Hotel Management Agreements and Leases As of September 30, 2017, we owned 323 hotels and 199 travel centers, which are included in 14 operating agreements. We do not operate any of our properties. As of September 30, 2017, 320 of our hotels are leased to our TRSs and managed by independent hotel operating companies and three hotels are leased to third parties. As of September 30, 2017, our hotel properties are managed by or leased to separate subsidiaries of Marriott International, Inc., or Marriott, InterContinental, Sonesta, Wyndham Hotel Group, or Wyndham, Hyatt Hotels Corporation, or Hyatt, Carlson and Morgans, under nine agreements. These hotel agreements have initial terms expiring between 2019 and 2103. Each of these agreements is for between one and 99 of our hotels. In general, the agreements contain renewal options for all, but not less than all, of the affected properties included in each agreement, and the renewal terms range between 20 to 60 years. Most of these agreements require the third party manager or tenant to: (1) make payments to us of minimum returns or minimum rents; (2) deposit a percentage of total hotel sales into reserves established for the regular refurbishment of our hotels, or FF&E reserves; and (3) for our managed hotels, make payments to our TRSs of additional returns to the extent of available cash flows after payment of operating expenses, funding of the FF&E reserves, payment of our minimum returns, payment of certain management fees and replenishment of security deposits or guarantees. Some of our managers or tenants or their affiliates have provided deposits or guarantees to secure their obligations to pay us. Marriott No. 1 agreement. Our management agreement with Marriott for 53 hotels, or our Marriott No. 1 agreement, provides that, as of September 30, 2017, we are to be paid an annual minimum return of $69,100 to the extent that gross revenues of the hotels, after payment of hotel operating expenses and funding of the FF&E reserve, are sufficient to do so. Marriott’s base and incentive management fees are only earned after we receive our minimum returns. We realized minimum returns of $17,247 and $17,126 during the three months ended September 30, 2017 and 2016, respectively, and minimum returns of $51,657 and $51,361 during the nine months ended September 30, 2017 and 2016, respectively, under this agreement. We also realized additional returns of $3,603 and $6,807 during the three and nine months ended September 30, 2017 and $4,372 and $10,621 during the three and nine months ended September 30, 2016, respectively, which represents our share of hotel cash flows in excess of the minimum returns due to us for the period. We do not have any security deposits or guarantees for our minimum returns from the 53 hotels included in our Marriott No. 1 agreement. Accordingly, the minimum returns we receive from these hotels managed by Marriott are limited to the hotels' available cash flows after payment of operating expenses and funding of the FF&E reserve. We funded $4,638 for capital improvements at certain of the hotels included in our Marriott No. 1 agreement during the nine months ended September 30, 2017. We currently expect to fund approximately $1,000 for capital improvements under our Marriott No. 1 agreement during the remainder of 2017. As we fund these improvements, the annual minimum returns payable to us increase by 10% of the amounts funded. Marriott No. 234 agreement. Our management agreement with Marriott for 68 hotels, or our Marriott No. 234 agreement, provides that, as of September 30, 2017, we are to be paid an annual minimum return of $106,538. We realized minimum returns of $26,591 and $26,571 during the three months ended September 30, 2017 and 2016, respectively, and minimum returns of $79,771 and $79,682 during the nine months ended September 30, 2017 and 2016, respectively, under this agreement. Pursuant to our Marriott No. 234 agreement, Marriott has provided us with a security deposit to cover minimum return payment shortfalls, if any. Under this agreement, this security deposit may be replenished and increased up to $64,700 from a share of hotel cash flows in excess of the minimum returns due to us. Marriott’s base and incentive management fees are only earned after we receive our minimum returns. During the nine months ended September 30, 2017, our available security deposit was replenished by $9,986 from a share of hotel cash flows in excess of the minimum returns due to us for the period. The available balance of this security deposit was $26,466 as of September 30, 2017. Pursuant to our Marriott No. 234 agreement, Marriott has also provided us with a limited guarantee which expires in 2019 for shortfalls up to 90% of our minimum returns, if and after the available security deposit has been depleted. The available balance of the guarantee was $30,672 as of September 30, 2017. We funded $1,975 of capital improvements to hotels under our Marriott No. 234 agreement during the nine months ended September 30, 2017. We currently expect to fund approximately $3,025 for capital improvements to certain hotels under our Marriott No. 234 agreement during the remainder of 2017. As we fund these improvements, the annual minimum returns payable to us increase by 9% of the amounts funded. Marriott No. 5 agreement. We lease one hotel in Kauai, HI to Marriott which requires that, as of September 30, 2017, we are paid annual minimum rents of $10,159. This lease is guaranteed by Marriott and we realized $2,540 and $2,529 of rent for this hotel during the three months ended September 30, 2017 and 2016, respectively, and $7,620 and $7,587 during the nine months ended September 30, 2017 and 2016, respectively. The guarantee provided by Marriott with respect to this leased hotel is unlimited. Marriott has four renewal options for 15 years each. On August 31, 2016, Marriott notified us that it will not exercise its renewal option at the expiration of the current lease term ending on December 31, 2019. InterContinental agreement. Our management agreement with InterContinental for 99 hotels, or our InterContinental agreement, provides that, as of September 30, 2017, we are to be paid annual minimum returns and rents of $188,920. We realized minimum returns and rents of $46,404 and $40,084 during the three months ended September 30, 2017 and 2016, respectively, and minimum returns and rents of $131,649 and $118,372 during the nine months ended September 30, 2017 and 2016, respectively, under this agreement. We also realized additional returns under this agreement of $8,264 and $3,563 during the three months ended September 30, 2017 and 2016, respectively, and $11,836 and $7,467 during the nine months ended September 30, 2017 and 2016, respectively, from our share of hotel cash flows in excess of the minimum returns and rents due to us for those periods. Pursuant to our InterContinental agreement, InterContinental has provided us with a security deposit to cover minimum payment shortfalls, if any. Under this agreement, InterContinental is required to maintain a minimum security deposit of $37,000 and this security deposit may be replenished and increased up to $100,000 from a share of future cash flows from the hotels in excess of our minimum returns and rents. During the nine months ended September 30, 2017, the available security deposit was replenished by $7,557 from the hotels’ cash flows in excess of the minimum payments due to us for the period. During the nine months ended September 30, 2017, we amended our InterContinental agreement in connection with each of the five hotel acquisitions we made during that period. See Note 7 for further information regarding these acquisitions. As a result of the amendments, the annual minimum returns and rents due to us increased and InterContinental provided us an aggregate of $19,696 to supplement the existing security deposit. The available balance of the InterContinental security deposit was at the contractually capped amount of $100,000 as of September 30, 2017. We did not fund any capital improvements to our InterContinental hotels during the nine months ended September 30, 2017. We currently expect to fund approximately $10,950 for capital improvements under our InterContinental agreement during the remainder of 2017, approximately $28,000 during 2018 and approximately $20,000 during 2019. As we fund these improvements, the annual minimum returns and rents payable to us increase by 8% of the amounts funded. Sonesta agreement. As of September 30, 2017, Sonesta managed 10 of our full service hotels and 39 of our limited service hotels pursuant to management agreements for each of the hotels, which we refer to collectively as our Sonesta agreement, and a pooling agreement, which combines those management agreements for purposes of calculating gross revenues, payment of hotel operating expenses, payment of fees and distributions and minimum returns due to us. Our Sonesta agreement provides that we are paid a fixed annual minimum return equal to 8% of our invested capital, as defined therein, if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so. As of September 30, 2017, the annual minimum return was $108,973. Our Sonesta agreement further provides that we are paid an additional return based upon operating profits, as defined therein, after payment of Sonesta’s incentive fee, if applicable. We do not have any security deposits or guarantees for the hotels managed by Sonesta. Accordingly, the returns we receive from our hotels managed by Sonesta are limited to the available hotels’ cash flows after payment of operating expenses. We realized returns of $18,741 and $19,133 during the three months ended September 30, 2017 and 2016, respectively, and returns of $53,808 and $51,279 during the nine months ended September 30, 2017 and 2016, respectively, under our Sonesta agreement. Pursuant to our Sonesta agreement, we recognized management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third party reservation transmission fees aggregating $7,432 and $6,712 for the three months ended September 30, 2017 and 2016, respectively, and $20,719 and $19,007 for the nine months ended September 30, 2017 and 2016, respectively. In addition, we recognized procurement and construction supervision fees of $479 and $344 for the three months ended September 30, 2017 and 2016, respectively, and $673 and $1,268 for the nine months ended September 30, 2017 and 2016, respectively, pursuant to our Sonesta agreement. These amounts are included in hotel operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. Our Sonesta agreement does not require FF&E escrow deposits, but does require us to fund capital expenditures that we approve at our hotels managed by Sonesta. We funded $21,892 for renovations and other capital improvements to hotels included in our Sonesta agreement during the nine months ended September 30, 2017. We currently expect to fund approximately $7,692 for renovations and other capital improvements during the remainder of 2017, approximately $86,000 during 2018 and approximately $5,000 during 2019. The annual minimum returns due to us under our Sonesta agreement increase by 8% of the amounts funded in excess of threshold amounts, as defined therein. We owed Sonesta $5,685 and $4,467 for capital expenditure and other reimbursements at September 30, 2017 and 2016, respectively. Amounts due to Sonesta are included in due to related persons in our condensed consolidated balance sheets. See Note 10 for further information regarding our relationship with Sonesta and Note 7 for further information regarding the effects of certain of our property acquisitions on our agreements with Sonesta. Wyndham agreements. Our management agreement with Wyndham for 22 hotels, or our Wyndham agreement, provides that, as of September 30, 2017, we are to be paid annual minimum returns of $27,401. We realized returns of $6,847 and $6,687 during the three months ended September 30, 2017 and 2016, respectively, and returns of $20,489 and $20,009 during the nine months ended September 30, 2017 and 2016, respectively, under this agreement. Pursuant to our Wyndham agreement, Wyndham has provided us with a guarantee, which is limited to $35,656, subject to an annual payment limit of $17,828 and expires on July 28, 2020. As of December 31, 2016, $1,090 remained available to cover payment shortfalls of our minimum returns due under the management agreement. During the nine months ended September 30, 2017, the hotels under this agreement generated cash flows that were less than the minimum returns due to us and the remaining guarantee was depleted. This guarantee may be replenished from a share of future cash flows from these hotels in excess of our minimum returns. As of November 7, 2017, Wyndham has paid all of the minimum returns due to us under our Wyndham agreement. We also lease 48 vacation units in one of our hotels to Wyndham Vacation Resorts, Inc., a subsidiary of Wyndham, or Wyndham Vacation, which requires that, as of September 30, 2017, we are paid annual minimum rents of $1,407. The guarantee provided by Wyndham with respect to the Wyndham Vacation lease for part of one hotel is unlimited. We recognized rents of $454 during both the three months ended September 30, 2017 and 2016 and $1,361 during both the nine months ended September 30, 2017 and 2016 under our Wyndham Vacation lease agreement. Rental income for the three months ended September 30, 2017 and 2016 for this lease includes $102 and $112, respectively, and $306 and $336 for the nine months ended September 30, 2017 and 2016, respectively, of adjustments necessary to record rent on a straight line basis. Our Wyndham agreement requires FF&E escrow deposits equal to 5% of total hotel sales for all hotels included in the agreement subject to available cash flows after payment of our minimum return. No FF&E escrow deposits were made during the nine months ended September 30, 2017 due to insufficient available cash flows generated at these hotels. We funded $5,045 for capital improvements to certain hotels included in our Wyndham agreement during the nine months ended September 30, 2017. We currently expect to fund approximately $1,800 for capital improvements under this agreement during the remainder of 2017. As we fund these improvements, the annual minimum returns payable to us increase by 8% of the amounts funded. Hyatt agreement. Our management agreement with Hyatt for 22 hotels, or our Hyatt agreement, provides that, as of September 30, 2017, we are to be paid an annual minimum return of $22,037. We realized minimum returns of $5,509 during each of the three months ended September 30, 2017 and 2016 and minimum returns of $16,528 during each of the nine months ended September 30, 2017 and 2016 under this agreement. Pursuant to our Hyatt agreement, Hyatt has provided us with a guarantee, which is limited to $50,000. During the nine months ended September 30, 2017, our available guarantee was replenished by $3,517 from a share of hotel cash flows in excess of the minimum returns due to us. The available balance of the guarantee was $21,826 as of September 30, 2017. Carlson agreement. Our management agreement with Carlson for 8 hotels, or our Carlson agreement, provides that, as of September 30, 2017, we are to be paid an annual minimum return of $12,920. We realized minimum returns of $3,230 during each of the three months ended September 30, 2017 and 2016 and minimum returns of $9,690 during each of the nine months ended September 30, 2017 and 2016 under this agreement. Pursuant to our Carlson agreement, Carlson has provided us with a guarantee, which is limited to $40,000. During the nine months ended September 30, 2017, our available guarantee was replenished by $4,716 from a share of hotel cash flows in excess of the minimum returns due to us. The available balance of the guarantee was $33,545 as of September 30, 2017. In June 2017, we amended our Carlson agreement and agreed to sell three hotels. During the three months ended September 30, 2017, we completed the sale of these three hotels and deposited $15,398 of the net sales proceeds into the FF&E reserve escrow account for our Carlson agreement. The remaining net sales proceeds of $8,030 were deposited into the FF&E reserve escrow account in October 2017. See Note 7 for further information regarding these sales. The net proceeds from these sales will be used to fund certain renovations to the remaining hotels operated under our Carlson agreement and we have agreed to fund up to $35,000 for renovation costs in excess of the net sales proceeds and available FF&E reserves. We currently expect to fund approximately $6,400 during 2018 and approximately $28,600 during 2019 for these renovations. Our annual minimum returns and the limited guaranty cap under our Carlson agreement will increase by 8% of any amounts we fund (excluding the net sales proceeds described above). In addition, in June 2017, the initial term of the management agreement and the limited guarantee provided by Carlson were extended to December 31, 2035. Morgans agreement. We lease The Clift Hotel in San Francisco, CA to a subsidiary of Morgans. This lease is scheduled to expire in 2103 and requires annual rent to us of $7,595, which amount is scheduled to increase on October 14, 2019 and every five years thereafter based upon consumer price index increases, but no less than 10% and no more than 20% at the time of each increase. Although the terms of this lease might have qualified this lease as a direct financing lease under GAAP, we recognize the rental income we receive from Morgans on a cash basis because of uncertainty regarding our collection of future rent increases. In December 2016, we notified Morgans that the closing of its merger with SBE Entertainment Group LLC, or SBE, without our consent was a breach of its lease obligations and shortly thereafter we commenced an unlawful detainer action in the California state courts to compel Morgans and SBE to surrender possession of this hotel to us. We are pursuing this litigation and are in discussions with Morgans and SBE regarding this hotel. The outcome of this pending litigation and our discussions with Morgans and SBE is not assured, but we believe Morgans may surrender to us possession of this hotel or that the court will determine that Morgans and SBE have breached the lease. We also believe that this hotel may require substantial capital investment to remain competitive in its market. The continuation of our dispute with Morgans and SBE is causing us to incur legal fees. Despite the continuation of this dispute, Morgans has paid the rents due to us through November 7, 2017; however, we believe that we may suffer some loss of future rent from this hotel, at least until this hotel is renovated and operations improve. TA leases. As of September 30, 2017, we leased to TA a total of 199 travel centers under five leases. We recognized rental income from TA of $73,279 and $69,866 for the three months ended September 30, 2017 and 2016, respectively, and $217,420 and $206,950 for the nine months ended September 30, 2017 and 2016, respectively. Rental income for the three months ended September 30, 2017 and 2016 includes $2,988 and $2,823, respectively, and $8,907 and $10,053 for the nine months ended September 30, 2017 and 2016, respectively, of adjustments necessary to record the deferred rent obligations under our TA leases and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight line basis. As of September 30, 2017 and December 31, 2016, we had receivables for current rent amounts owed to us by TA and straight line rent adjustments of $75,231 and $65,332, respectively. These amounts are included in due from related persons in our condensed consolidated balance sheets. In addition, as of September 30, 2017, TA owed us deferred rent of $150,000, which is due and payable on various dates from 2024 through 2032. Our TA leases do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. Under our TA leases, TA may request that we fund capital improvements in return for increases in TA’s annual minimum rent. We funded $62,888 and $75,314 for the nine months ended September 30, 2017 and 2016, respectively, of qualifying capital improvements to our TA leases. As a result, TA’s annual minimum rent payable to us increased by $5,345 and $6,402, respectively. We currently expect to fund approximately $16,090 for renovations and other capital improvements to our travel centers during the remainder of 2017. TA is not obligated to request and we are not obligated to fund any such improvements. In addition to the rental income we recognized from TA during the three and nine months ended September 30, 2017 and 2016 as described above, our TA leases require TA to pay us percentage rent based upon increases in certain sales. We determine percentage rent due under our TA leases annually and recognize any resulting amount as rental income when all contingencies are met. We had aggregate deferred percentage rent under our TA leases of $435 and $408 for the three months ended September 30, 2017 and 2016, respectively, and $1,384 and $937 for the nine months ended September 30, 2017 and 2016, respectively. See Note 10 for further information regarding our relationship with TA and Note 7 for further information regarding the effects of certain 2017 property acquisitions on our leases with TA. Guarantees and security deposits generally. When we reduce the amounts of the security deposits we hold for payment deficiencies at our managed and leased hotels, we record income equal to the amounts by which this deposit is reduced up to the minimum return or minimum rent due to us. However, reducing the security deposits does not result in additional cash flows to us of the deficiency amounts, but reducing amounts of security deposits may reduce the refunds due to the respective lessees or managers who have provided us with these deposits upon expiration of the respective lease or management agreement. The security deposits are non-interest bearing and are not held in escrow. Under these agreements, any amount of the security deposits which are applied to payment deficits may be replenished from a share of future cash flows from the applicable hotel operations pursuant to the terms of the respective agreements. The net operating results of our managed hotel portfolios exceeded, in the aggregate, the minimum returns due to us in both the three months ended September 30, 2017 and 2016. Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $5,699 and $2,248 less than the minimum returns due to us in the three months ended September 30, 2017 and 2016, respectively, and $18,971 and $12,618 less than the minimum returns due to us in the nine months ended September 30, 2017 and 2016, respectively. When the managers of these hotels fund these shortfalls under the terms of our operating agreements or their guarantees, we reflect such fundings (including security deposit applications) in our condensed consolidated statements of comprehensive income as a reduction of hotel operating expenses. There was no reduction to hotel operating expenses in the three months ended September 30, 2017 or 2016 and reductions of $2,689 and $592 in the nine months ended September 30, 2017 and 2016, respectively, as a result of such fundings. We had shortfalls at certain of our managed hotel portfolios not funded by the managers of these hotels under the terms of our operating agreements of $5,699 and $2,248 in the three months ended September 30, 2017 and 2016, respectively, and $16,282 and $12,026 in the nine months ended September 30, 2017 and 2016, respectively, which represent the unguaranteed portions of our minimum returns from Sonesta. Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $31,355 and $35,123 more than the minimum returns due to us in the three months ended September 30, 2017 and 2016, respectively, and $67,052 and $80,867 more than the minimum returns due to us in the nine months ended September 30, 2017 and 2016, respectively. Like the security deposits we hold, certain guarantees held by us may be replenished by a share of future cash flows from the applicable hotels' operations in excess of the minimum returns due to us pursuant to the terms of the respective operating agreements. When our guarantees and our security deposits are replenished by cash flows from hotel operations, we reflect such replenishments in our condensed consolidated statements of comprehensive income as an increase to hotel operating expenses. We had $10,099 and $15,103 of guarantee and security deposit replenishments in the three months ended September 30, 2017 and 2016, respectively, and $26,319 and $33,897 of guarantee and security deposit replenishments in the nine months ended September 30, 2017 and 2016, respectively. |
Business and Property Management Agreements with RMR LLC |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Business and Property Management Agreements with RMR LLC | Business and Property Management Agreements with RMR LLC We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. We have two agreements with RMR LLC to provide management services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of the office building component of one of our hotels. Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $10,865 and $34,942 for the three months ended September 30, 2017 and 2016, respectively, and $68,526 and $83,547 for the nine months ended September 30, 2017 and 2016, respectively. The business management fees for the three and nine months ended September 30, 2017 include estimated annual incentive fees for 2017 of $873 and $38,243, respectively, based on our common share total return, as defined, as of September 30, 2017. Although we recognized estimated incentive fees in accordance with GAAP, the actual amount of annual incentive fees payable to RMR LLC for 2017, if any, will be calculated based on our common share total return, as defined, for the three year period ending December 31, 2017, and will be payable in 2018. The net business management fees we recognized for the three months ended September 30, 2016 and nine months ended September 30, 2016 included $25,036 and $56,272, respectively, of then estimated 2016 incentive fees; in January 2017, we paid RMR LLC an incentive fee of $52,407 for 2016. The net business management fees we recognized for the 2017 and 2016 periods are included in general and administrative expenses in our condensed consolidated statements of comprehensive income. Pursuant to our property management agreement with RMR LLC, we recognized property management fees of $12 and $16 for the three months ended September 30, 2017 and 2016, respectively, and $33 and $42 for the nine months ended September 30, 2017 and 2016, respectively. These fees are payable to RMR LLC in connection with the management of the office building component of one of our hotels. These amounts are included in hotel operating expenses in our condensed consolidated statements of comprehensive income. We are generally responsible for all of our operating expenses, including certain expenses incurred by RMR LLC on our behalf. We recognized $40 and $45 for property management related expenses related to the office building component of one of our hotels for the three months ended September 30, 2017 and 2016, respectively, and $131 and $129 for the nine months ended September 30, 2017 and 2016, respectively. These amounts are included in hotel operating expenses in our condensed consolidated statements of comprehensive income. In addition, we are responsible for our share of RMR LLC’s costs for providing our internal audit function. The amounts recognized as expense for internal audit costs were $67 and $34 for the three months ended September 30, 2017 and 2016, respectively, and $202 and $168 for the nine months ended September 30, 2017 and 2016, respectively. These amounts are included in general and administrative expenses in our condensed consolidated statements of comprehensive income for these periods. |
Related Person Transactions |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with TA, Sonesta, RMR LLC, The RMR Group Inc., or RMR Inc., AIC and others related to them, including other companies to which RMR LLC provides management services and which have trustees, directors and officers who are also our Trustees or officers. TA. TA is our largest tenant and property operator, leasing 35% of our gross carrying value of real estate properties as of September 30, 2017. We lease all of our travel centers to TA. We are also TA’s largest shareholder; as of September 30, 2017, we owned 3,420,000 common shares of TA, representing approximately 8.6% of TA’s outstanding common shares. RMR LLC provides management services to both us and TA. See Notes 7 and 8 for further information regarding our relationships, agreements and transactions with TA and Note 13 for further information regarding our investment in TA. Sonesta. Sonesta is a private company owned by our Managing Trustees. As of September 30, 2017, Sonesta managed 49 of our hotels pursuant to management and pooling agreements. See Notes 7 and 8 for further information regarding our relationships, agreements and transactions with Sonesta. Our Manager, RMR LLC. See Note 9 for further information regarding our management agreements with RMR LLC. We have historically granted share awards to certain RMR LLC employees under our equity compensation plans. In September 2017 and 2016, we granted annual share awards of 85,000 and 79,100 of our common shares, respectively, to our officers and to other employees of RMR LLC. In September 2017 and 2016, we purchased 18,559 and 19,677 of our common shares, respectively, at the closing price of our common shares on Nasdaq on the date of purchase, from certain employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We include the amounts recognized as expense for share awards in general and administrative expenses in our condensed consolidated statements of comprehensive income. RMR Inc. RMR LLC is a subsidiary of RMR Inc. and RMR Inc. is the managing member of RMR LLC. The controlling shareholder of RMR Inc., ABP Trust, is owned by our Managing Trustees. As of September 30, 2017, we hold 2,503,777 shares of class A common stock of RMR Inc. See Note 13 for further information regarding our investment in RMR Inc. In June 2017, we and our manager, RMR LLC, became aware that we had been a victim of a criminal fraud that law enforcement authorities refer to as business email compromise fraud. This fraud involved a person pretending to be the representative of the seller in one of our property acquisition transactions and such imposter providing fraudulent wire instructions to one of our senior officers. As a result, funds were sent by wire transfer to an account that was believed to be, but in fact was not, the seller’s account. RMR LLC reimbursed us during the second quarter of 2017 for this fraudulent wire payment. As a result of the reimbursement, this matter had no effect on our condensed consolidated financial statements. AIC. We, ABP Trust, TA and four other companies to which RMR LLC provides management services currently own AIC, an Indiana insurance company, in equal amounts. We and the other AIC shareholders participate in a combined property insurance program arranged and reinsured in part by AIC. We paid aggregate annual premiums, including taxes and fees, of approximately $6,352 in connection with this insurance program for the policy year ending June 30, 2018, which amount may be adjusted from time to time as we acquire and dispose of properties that are included in this insurance program. As of September 30, 2017 and December 31, 2016, our investment in AIC had a carrying value of $7,952 and $7,123, respectively. These amounts are included in other assets in our condensed consolidated balance sheets. We recognized income related to our investment in AIC, which amounts are presented as equity in earnings of an investee in our condensed consolidated statements of comprehensive income. Our other comprehensive income includes our proportionate part of unrealized gains on securities which are owned and held for sale by AIC. For further information about these and certain other related person relationships and transactions, please refer to our 2016 Annual Report. |
Income Taxes |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have elected to be taxed as a real estate investment trust, or REIT, under the United States Internal Revenue Code of 1986, as amended, or the IRC, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements. We are subject to income tax in Canada, Puerto Rico and certain states despite our qualification for taxation as a REIT. Further, we lease our managed hotels to our wholly owned TRSs that, unlike most of our subsidiaries, file a separate consolidated tax return and are subject to federal, state and foreign income taxes. Our consolidated income tax provision includes the income tax provision related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our qualification for taxation as a REIT. During the three and nine months ended September 30, 2017, we recognized income tax expense of $619 and $1,761, respectively, which includes $125 and $486, respectively, of foreign taxes, ($6) and $30, respectively, of federal taxes and $500 and $1,245, respectively, of state taxes. During the three and nine months ended September 30, 2016, we recognized income tax expense of $948 and $3,483, respectively, which includes $415 and $2,018, respectively, of foreign taxes, ($59) and $32, respectively, of federal taxes and $592 and $1,433, respectively, of state taxes. |
Segment Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information We aggregate our hotels and travel centers into two reportable segments, hotel investments and travel center investments, based on their similar operating and economic characteristics.
|
Fair Value of Assets and Liabilities |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The table below presents certain of our assets carried at fair value at September 30, 2017, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
In addition to the investment securities included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility, term loan, senior notes and security deposits. At September 30, 2017 and December 31, 2016, the fair values of these additional financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short term nature or variable interest rates, except as follows:
At September 30, 2017 and December 31, 2016, we estimated the fair values of our senior notes using an average of the bid and ask price of our then outstanding issuances of senior notes (Level 2 inputs). We estimated the fair value of our convertible senior notes at December 31, 2016 using discounted cash flow analyses and currently prevailing market interest rates (Level 3 inputs) because no market quotes or other observable inputs for these notes were available at December 31, 2016. |
New Accounting Pronouncements (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Basis of Accounting | The accompanying condensed consolidated financial statements of Hospitality Properties Trust and its subsidiaries, or HPT, we, our or us, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2016, or our 2016 Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included in these condensed consolidated financial statements. These condensed consolidated financial statements include the accounts of HPT and our subsidiaries, all of which are 100% owned directly or indirectly by HPT. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. Reclassifications have been made to the prior years’ condensed consolidated financial statements to conform to the current year’s presentation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets, impairment of real estate and the valuation of intangible assets. |
Variable Interest Entity | We have determined that each of our taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification™, or ASC. We have concluded that we must consolidate each of our TRSs because we are the entity with the power to direct the activities that most significantly impact the VIEs’ economic performance and we have the obligation to absorb losses and the right to receive benefits from each VIE that could be significant to the VIE, and are, therefore, the primary beneficiary of each VIE. |
New Accounting Pronouncements | On January 1, 2017, we adopted FASB Accounting Standards Update, or ASU, No. 2017-01, Clarifying the Definition of a Business, which provides additional guidance on evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or of a business. The update defines three requirements for a set of assets and activities (collectively referred to as a “set”) to be considered a business: inputs, processes and outputs. As a result of the implementation of this update, certain property acquisitions, which under previous guidance were accounted for as business combinations, are now accounted for as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized as opposed to expensed under the previous guidance. On January 1, 2017, we adopted FASB ASU No. 2016-09, Compensation - Stock Compensation, which identifies areas for simplification involving several aspects of accounting for share based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The adoption of ASU No. 2016-09 did not have a material impact in our condensed consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU No. 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. In August 2015, the FASB provided for a one-year deferral of the effective date for ASU No. 2014-09, which is now effective for us beginning January 1, 2018. The majority of our revenue is from hotels managed under TRS structures. We do not believe the standard will materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales of our managed hotels. A lesser portion of our revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU No. 2014-09. We are continuing to evaluate ASU No. 2014-09 (and related clarifying guidance issued by the FASB); however, we do not expect its adoption to have a significant impact on the amount or timing of our revenue recognition in our condensed consolidated financial statements. We currently expect to adopt the standard using the modified retrospective approach. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. This update is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted subject to certain conditions. Currently, changes in fair value of these investments are recorded through other comprehensive income. ASU No. 2016-01 states that these changes will be recorded through earnings. We are continuing to evaluate this guidance, but we expect the implementation of this guidance will affect how changes in the fair value of available for sale equity investments we hold are presented in our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. ASU No. 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the potential impact the adoption of ASU No. 2016-02 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect adoption of this guidance to have a material impact in our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents. Companies will show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheets. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon the adoption of ASU No. 2016-18, we will reconcile both cash and cash equivalents and restricted cash and restricted cash equivalents, whereas under the current guidance we explain the changes during the period for cash and cash equivalents only. In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, which clarifies which changes to the terms or conditions of a share based payment award are subject to the guidance on modification accounting under ASC 718. Entities would apply the modification accounting guidance unless the value, vesting requirements and classification of a share based payment award are the same immediately before and after a change to the terms or conditions of the award. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We are continuing to evaluate ASU No. 2017-09; however, we do not expect its adoption to have a material impact in our condensed consolidated financial statements. |
Weighted Average Common Shares (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation weighted average common shares to calculate basic and diluted earnings per share | The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share:
|
Real Estate Properties (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allocation of the acquisition cost to the estimated fair value of assets acquired | Our allocation of the purchase price of each of these acquisitions based on the estimated fair value of the acquired assets and assumed liabilities is presented in the table below.
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information |
|
Fair Value of Assets and Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of certain of the entity's assets carried at fair value, categorized by the level of inputs used in the valuation of each asset | The table below presents certain of our assets carried at fair value at September 30, 2017, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of additional financial instruments | At September 30, 2017 and December 31, 2016, the fair values of these additional financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short term nature or variable interest rates, except as follows:
|
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Ownership interest in subsidiaries | 100.00% | |
Assets of TRSs | $ 40,150 | $ 26,676 |
Liabilities of TRSs | $ 139,276 | $ 101,602 |
Revenue Recognition - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
agreement
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Revenue Recognition [Abstract] | |||||
Number of operating leases for which rental income is not recognized on straight line basis over the term of the lease agreements | agreement | 1 | ||||
Adjustments necessary to record rent on straight line basis | $ 3,087 | $ 2,932 | $ 9,208 | $ 10,377 | |
Straight line rent receivables | 2,580 | 2,580 | $ 2,279 | ||
TA | |||||
Related Party Transaction [Line Items] | |||||
Straight line rent receivable, due from related persons | 51,161 | 51,161 | $ 42,254 | ||
Deferred percentage rent | $ 435 | $ 408 | $ 1,384 | $ 937 |
Weighted Average Common Shares - Reconciliation of Weighted Average Common Shares (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding (basic) (in shares) | 164,149 | 157,217 | 164,131 | 153,357 |
Effect of dilutive share awards: Unvested share awards (in shares) | 39 | 46 | 37 | 33 |
Weighted average common shares outstanding (diluted) (in shares) | 164,188 | 157,263 | 164,168 | 153,390 |
Shareholders' Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands |
Oct. 12, 2017 |
Aug. 17, 2017 |
May 18, 2017 |
Feb. 21, 2017 |
Jan. 17, 2017 |
---|---|---|---|---|---|
Distributions | |||||
Common stock, quarterly per share distribution (in dollars per share) | $ 0.52 | $ 0.52 | $ 0.51 | ||
Common stock dividend | $ 85,427 | $ 85,419 | $ 83,777 | ||
Series D preferred shareholders' | |||||
Distributions | |||||
Preferred stock, per share distribution (in dollars per share) | $ 0.4453 | ||||
Preferred stock dividend | $ 5,166 | ||||
Subsequent event | |||||
Distributions | |||||
Common stock dividend | $ 85,462 | ||||
Quarterly distribution declared (in dollars per share) | $ 0.52 |
Real Estate Properties - Narrative (Details) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017
USD ($)
hotel
travelcenter
|
Sep. 30, 2016
USD ($)
|
|
Real Estate Properties [Line Items] | ||
Improvements to certain properties | $ 89,955 | $ 122,239 |
Hotels and travel centers | ||
Real Estate Properties [Line Items] | ||
Improvements to certain properties | 111,966 | |
Increase (decrease) in annual minimum returns and rents | $ 7,132 | |
Hotel | ||
Real Estate Properties [Line Items] | ||
Number of properties owned | hotel | 323 | |
Number of properties acquired | hotel | 20 | |
Travel centers | ||
Real Estate Properties [Line Items] | ||
Number of properties owned | travelcenter | 199 | |
Number of properties acquired | travelcenter | 1 |
Real Estate Properties - Dispositions (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 22, 2017
USD ($)
room
|
Aug. 31, 2017
USD ($)
room
|
Aug. 01, 2017
USD ($)
room
|
Sep. 30, 2017
USD ($)
hotel
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
Real Estate [Line Items] | |||||||
Gain on sale of real estate | $ 9,348 | $ 0 | $ 9,348 | $ 0 | |||
Chandler, AZ | Hotel | |||||||
Real Estate [Line Items] | |||||||
Number of rooms sold | room | 159 | ||||||
Proceeds from sale of property held-for-sale | $ 9,085 | ||||||
Gain on sale of real estate | 4,336 | ||||||
Naperville, IL | Hotel | |||||||
Real Estate [Line Items] | |||||||
Number of rooms sold | room | 143 | ||||||
Proceeds from sale of property held-for-sale | $ 6,313 | ||||||
Gain on sale of real estate | $ 2,303 | ||||||
Carlson | Chandler, AZ, Bloomington, MN, and Naperville, IL | Hotel | |||||||
Real Estate [Line Items] | |||||||
Number of properties sold | hotel | 3 | ||||||
Carlson | Bloomington, MN | Hotel | |||||||
Real Estate [Line Items] | |||||||
Number of rooms sold | room | 209 | ||||||
Proceeds from sale of property held-for-sale | $ 8,030 | ||||||
Gain on sale of real estate | $ 2,709 |
Hotel Management Agreements and Leases - Marriott No. 5 (Details) - Hotel $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017
USD ($)
hotel
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
agreement
hotel
|
Sep. 30, 2016
USD ($)
|
|
Management Agreements and Leases [Line Items] | ||||
Number of properties owned | hotel | 323 | 323 | ||
Marriott No 5 contract | ||||
Management Agreements and Leases [Line Items] | ||||
Number of properties owned | hotel | 1 | 1 | ||
Operating agreement annual rent and return | $ | $ 10,159 | |||
Realized returns and rents | $ | $ 2,540 | $ 2,529 | $ 7,620 | $ 7,587 |
Number of renewal options | agreement | 4 | |||
Term of renewal options | 15 years |
Hotel Management Agreements and Leases - Hyatt Agreement (Details) - Hotel $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017
USD ($)
hotel
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
hotel
|
Sep. 30, 2016
USD ($)
|
|
Management Agreements and Leases [Line Items] | ||||
Number of properties owned | hotel | 323 | 323 | ||
Hyatt Hotels Corporation | ||||
Management Agreements and Leases [Line Items] | ||||
Number of properties owned | hotel | 22 | 22 | ||
Operating agreement annual rent and return | $ 22,037 | |||
Realized returns and rents | $ 5,509 | $ 5,509 | 16,528 | $ 16,528 |
Guarantee provided to the entity, maximum | 50,000 | 50,000 | ||
Increase in guarantee | 3,517 | |||
Guarantee provided to the entity, remaining amount | $ 21,826 | $ 21,826 |
Hotel Management Agreements and Leases - Morgan Agreements (Details) - Morgans agreement - Hotel $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Management Agreements and Leases [Line Items] | |
Operating agreement annual rent and return | $ 7,595 |
Minimum | |
Management Agreements and Leases [Line Items] | |
Percentage increase in current rent based on changes In CPI index after specified period | 10.00% |
Maximum | |
Management Agreements and Leases [Line Items] | |
Percentage increase in current rent based on changes In CPI index after specified period | 20.00% |
Hotel Management Agreements and Leases - Guarantees and Security Deposits Generally (Details) - Hotel - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Management Agreements and Leases [Line Items] | ||||
Amount by which the cash flow available to pay the entity's minimum rent or return was less than the minimum amount | $ 5,699 | $ 2,248 | $ 18,971 | $ 12,618 |
Reduction of hotel operating expenses | 0 | 0 | 2,689 | 592 |
Shortfalls due to unguaranteed portions of minimum returns | 5,699 | 2,248 | 16,282 | 12,026 |
Amount by which the cash flow available to pay the entity's minimum rent or return was more than the minimum amount | 31,355 | 35,123 | 67,052 | 80,867 |
Increase in guarantee provided and security deposit to the entity | $ 10,099 | $ 15,103 | $ 26,319 | $ 33,897 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Components of provision for income taxes | ||||
Income tax expense | $ 619 | $ 948 | $ 1,761 | $ 3,483 |
Current foreign tax expense | 125 | 415 | 486 | 2,018 |
Current federal tax expense | (6) | (59) | 30 | 32 |
Current state tax expense | $ 500 | $ 592 | $ 1,245 | $ 1,433 |
Segment Information - Schedule of Segment Information (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
segment
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Segment Information | |||||
Number of reportable segments | segment | 2 | ||||
Hotel operating revenues | $ 495,550 | $ 464,981 | $ 1,392,995 | $ 1,334,656 | |
Rental income | 80,896 | 77,470 | 240,274 | 229,760 | |
FF&E reserve income | 1,142 | 1,065 | 3,524 | 3,517 | |
Total revenues | 577,588 | 543,516 | 1,636,793 | 1,567,933 | |
Hotel operating expenses | 343,274 | 322,012 | 965,546 | 923,239 | |
Depreciation and amortization | 98,205 | 90,139 | 286,811 | 266,192 | |
General and administrative | 13,404 | 37,739 | 76,097 | 91,127 | |
Acquisition related costs | 0 | 156 | 0 | 885 | |
Total expenses | 454,883 | 450,046 | 1,328,454 | 1,281,443 | |
Operating income | 122,705 | 93,470 | 308,339 | 286,490 | |
Dividend income | 626 | 626 | 1,878 | 1,375 | |
Interest income | 211 | 89 | 590 | 227 | |
Interest expense | (46,574) | (41,280) | (135,329) | (124,564) | |
Loss on early extinguishment of debt | 0 | (158) | 0 | (228) | |
Income before income taxes, equity in earnings of an investee and gain on sale of real estate | 76,968 | 52,747 | 175,478 | 163,300 | |
Income tax expense | (619) | (948) | (1,761) | (3,483) | |
Equity in earnings of an investee | 31 | 13 | 533 | 107 | |
Income before gain on sale of real estate | 76,380 | 51,812 | 174,250 | 159,924 | |
Gain on sale of real estate | 9,348 | 0 | 9,348 | 0 | |
Net income | 85,728 | 51,812 | 183,598 | 159,924 | |
Total assets | 7,144,467 | 7,144,467 | $ 6,634,228 | ||
Corporate | |||||
Segment Information | |||||
General and administrative | 13,404 | 37,739 | 76,097 | 91,127 | |
Total expenses | 13,404 | 37,739 | 76,097 | 91,127 | |
Operating income | (13,404) | (37,739) | (76,097) | (91,127) | |
Dividend income | 626 | 626 | 1,878 | 1,375 | |
Interest income | 211 | 89 | 590 | 227 | |
Interest expense | (46,574) | (41,280) | (135,329) | (124,564) | |
Loss on early extinguishment of debt | (158) | (228) | |||
Income before income taxes, equity in earnings of an investee and gain on sale of real estate | (59,141) | (78,462) | (208,958) | (214,317) | |
Income tax expense | (619) | (948) | (1,761) | (3,483) | |
Equity in earnings of an investee | 31 | 13 | 533 | 107 | |
Income before gain on sale of real estate | (59,729) | (210,186) | |||
Gain on sale of real estate | 0 | 0 | |||
Net income | (59,729) | (79,397) | (210,186) | (217,693) | |
Total assets | 167,990 | 167,990 | 145,029 | ||
Hotels | Operating segments | |||||
Segment Information | |||||
Hotel operating revenues | 495,550 | 464,981 | 1,392,995 | 1,334,656 | |
Rental income | 7,617 | 7,604 | 22,854 | 22,810 | |
FF&E reserve income | 1,142 | 1,065 | 3,524 | 3,517 | |
Total revenues | 504,309 | 473,650 | 1,419,373 | 1,360,983 | |
Hotel operating expenses | 343,274 | 322,012 | 965,546 | 923,239 | |
Depreciation and amortization | 61,996 | 56,397 | 179,503 | 167,485 | |
Acquisition related costs | 156 | 885 | |||
Total expenses | 405,270 | 378,565 | 1,145,049 | 1,091,609 | |
Operating income | 99,039 | 95,085 | 274,324 | 269,374 | |
Dividend income | |||||
Loss on early extinguishment of debt | |||||
Income before income taxes, equity in earnings of an investee and gain on sale of real estate | 99,039 | 95,085 | 274,324 | 269,374 | |
Income before gain on sale of real estate | 99,039 | 274,324 | |||
Gain on sale of real estate | 9,348 | 9,348 | |||
Net income | 108,387 | 95,085 | 283,672 | 269,374 | |
Total assets | 4,490,298 | 4,490,298 | 4,005,481 | ||
Travel Centers | Operating segments | |||||
Segment Information | |||||
Rental income | 73,279 | 69,866 | 217,420 | 206,950 | |
Total revenues | 73,279 | 69,866 | 217,420 | 206,950 | |
Depreciation and amortization | 36,209 | 33,742 | 107,308 | 98,707 | |
Total expenses | 36,209 | 33,742 | 107,308 | 98,707 | |
Operating income | 37,070 | 36,124 | 110,112 | 108,243 | |
Dividend income | |||||
Loss on early extinguishment of debt | |||||
Income before income taxes, equity in earnings of an investee and gain on sale of real estate | 37,070 | 36,124 | 110,112 | 108,243 | |
Income before gain on sale of real estate | 37,070 | 110,112 | |||
Gain on sale of real estate | 0 | 0 | |||
Net income | 37,070 | $ 36,124 | 110,112 | $ 108,243 | |
Total assets | $ 2,486,179 | $ 2,486,179 | $ 2,483,718 |
-:F8#9E+YX+DQAX:^124SA'E,UL(JAG
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M ,_E2 ,)A;JG-YMCZ =B4*"K_
MP#TO
MQ*(YR5J^C\SIF:+3ZGT)U!#(9BVJ4T9)JMV PV/9D@AC0PB;Q"*!
M>: 9YPUA'@B<.&.OR62O&!E"R%B6!L U@N9CXAJ
MB)^+LCJIHTEL+-WJ<1R+A(\TF.,U4;1*JP5$U64E1B%@6)+085P7\A2K)$*F
M-3S8%<.J/,=HT._TCG.!:2TR_CRP(R#T\V*+5LR%]R(DH:;-$.YI.[->@9E:
MZ22YHW[H/: \JTF+MC O892"G: KY%). -DU^YF_R#24CV>O7G-]FC1=5(7Q
MXXH>5:(!@.VE&&A2B;6+Z9DL7!%7<=JK!-G&:'"G-T,5)7GF7@;WC\4U^AT_3_EW81G:.G(W'EXW]KXWQ@%)V
M5SA"+7ZPQ5!0^W"\P;.=QFPRO.GG'\26;UR\ U!+ P04 " X@VA+
4ATV)DO)WPHLRMS@2._6^%_&)]R<>
M>E-%9VI%N@OB7?#>ROV1Y^P6B>:8\Q3#US%+! OL2PJ^E>+,_X'S;?AA4^$A
MP0]_*#QL$V2;!%DBR/Y;XE9,]E<2MNJI!MNF:7*DPL&D25YYEX&]Y^E-?H=/
MT_Y9V%8:1Z[HP\NF_C>('H*4W5T8H2Y\L,50T/AX?!/.=AJSR?#8SS^(+=^X
M_ 502P,$% @ .(-H2_:W9#BT 0 T@, !D !X;"]W;W)K!W!!@^
M-.V*P<@H^L09&DR( !>&6M7.%>@V79\00R"#$1'@Q!#K@4CG"#$9(>8H,3
M,>#$4.MP
F5BS=9
M,*:<][IJY,HME&J7GB?S@M54OO"6-?K)D8N:*GT4)T^V@M#:HK#_M^Z-6T
M;-PLM;:=R%)^5E79L)UPY+FNJ?B]816_KESDW@ROY:E0QN!E:4M/[!M3W]N=
MT"=O0#F4-6MDR1M'L./*7:/E%H4FP'K\*-E5CO:.D;+G_,TKFP+:LJ@Z3S^-6#N@.G"1SO;^@?K7@M9D\EV_+J9WE0Q&F*?17&* :<,P/3&$:73G9H!I0YD&S6R :7.!:8,^_3),CTUJVD09
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M4M H#=#L&)J'+M6,T@#)CB%YZ%+)* U@[!B,AW40(XT'C#W%N*5K6 6HXX273ZTY,18
ZYJF0]>&BIY\KN_ID5WO0S^/\RP
M 0T&=#4@-FG !P-^-0AHTL ;#+Q[(_B#@7]OA& P"+0(3E^LKOK/29TLYZ6\
M6&7_ IV2]CUELZ"9WVT[V$UG]U\S 54S^K[D(9\[[ZVC ;/J,72#T2$O)H1=
M$4Y#X,J"$(L5&>8\]-00:X3Q5Y/UH&%/
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MC_^#UK4RY-DGLY5.*MG?'C)UJ)O;T-R7W<%.]U#K
W&MG[,-PHTK"V>)&9C/P&PQ!JVSP J(L[VQX[VQT#[
M)\C!X6AL3/ZA?HY6Q% K&GMSJ4#:VU 8F8J#P;F@HLVA.YNVWI:=:R[[9V"]
MGG_OL#Q7&/8EFJX08+]'TP?(OD;31\B^0=.G_MSRD4Y_./^2-X>B;KU7QL7Y
MISNB[!GC5(@-/XFJ'FF^NSZ4=,_E;2KNF_Y0W#]P=E('_N#ZK\/B#U!+ P04
M " X@VA+:#\S(OP! "G!0 &0 'AL+W=O&W.
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MNTW-7HZC8SQHT4UC$<^SN?@'4$L#!!0 ( #B#:$NK\2#FY , %$1 9
M >&PO=V]R:W-H965T
\:
M.=]+_1JK][J]Z;8-*2I[B_>ZOQ*+_U!+ P04 " X@VA+IVGJ\'<"
M" &0 'AL+W=O