EX-99.2 3 a09-12631_1ex99d2.htm EX-99.2

Exhibit 99.2

 

 

HOSPITALITY PROPERTIES TRUST

 

First Quarter 2009

 

Supplemental Operating and Financial Data

 

 

 

All amounts in this report are unaudited.

 


 

TABLE OF CONTENTS

 

 

Page

 

 

 

 

CORPORATE INFORMATION

 

 

 

Company Profile

7

Investor Information

8

Research Coverage

9

 

 

FINANCIAL INFORMATION

 

 

 

Key Financial Data

11

Consolidated Balance Sheet

12

Consolidated Statement of Income

13

Notes to Consolidated Statement of Income

14

Consolidated Statement of Cash Flows

15

Calculation of EBITDA

16

Calculation of Funds from Operations (FFO)

17

Segment Information

18

Debt Summary

19

Debt Maturity Schedule

20

Leverage Ratios, Coverage Ratios and Public Debt Covenants

21

FF&E Reserve Escrows

22

2009 Acquisitions and Dispositions Information

23

2009 Financing Activities

24

 

 

 

 

 

 

OPERATING AGREEMENTS AND PORTFOLIO INFORMATION

 

 

 

Summary of Operating Agreements

26

Portfolio by Operating Agreement, Manager and Brand

28

Operating Statistics by Hotel Operating Agreement

29

Coverage by Operating Agreement

30

Operating Agreement Expiration Schedule

31

 

2


 

WARNING REGARDING FORWARD LOOKING STATEMENTS

 

THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS.  WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”, OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:

 

·      OUR MANAGERS’ OR TENANTS’ ABILITY TO PAY RETURNS OR RENT TO US, INCLUDING THE ABILITY OF MARRIOTT INTERNATIONAL INC., OR MARRIOTT, AND BARCELO CRESTLINE corporation, OR CRESTLINE, TO PAY THE FULL AMOUNT OF MINIMUM RETURNS OR RENTS DUE TO US IN THE FUTURE AND OUR ABILITY TO APPLY MARRIOTT’S AND CRESTLINE’S SECURITY DEPOSITS WHICH WE HOLD TO COVER ANY SHORTFALLS;

 

·      OUR ABILITY TO PAY DISTRIBUTIONS IN THE FUTURE, INCLUDING RESUMPTION OF DISTRIBUTIONS ON OUR COMMON SHARES LATER IN 2009 OR AT ANY FUTURE TIME, THE CONTINUATION OF PAYMENT OF DISTRIBUTIONS ON OUR PREFERRED SHARES, THE AMOUNT OF ANY SUCH DISTRIBUTIONS AND WHETHER ANY SUCH DISTRIBUTIONS WILL BE PAID IN CASH ONLY OR PARTLY IN STOCK; AND, IF PARTLY IN STOCK, THE PROPORTIONS OF CASH VERSUS STOCK COMPONENTS OF SUCH DISTRIBUTIONS;

 

·      OUR EXPECTATION THAT WE WILL REALIZE SUBSTANTIAL INCOME FOR FINANCIAL REPORTING PURPOSES AND THAT OUR DISTRIBUTIONS TO OUR COMMON SHAREHOLDERS IN 2009 WILL BE AT LEAST EQUAL TO THE MINIMUM AMOUNTS REQUIRED IN ORDER FOR US TO REMAIN A REAL ESTATE INVESTMENT TRUST, OR REIT, FOR FEDERAL TAX PURPOSES;

 

·      OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL;

 

·      THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY;

 

·      OUR ABILITY TO PAY INTEREST AND DEBT PRINCIPAL AND MAKE DISTRIBUTIONS; AND

 

·      OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS.

 

OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS INCLUDING;

 

·      CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS;

 

·      ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES, TRAVELCENTERS OF AMERICA LLC, OR TA, AND REIT MANAGEMENT & RESEARCH LLC, OR RMR, AND their affiliates;

 

·      CHANGES IN FEDERAL, STATE AND LOCAL LEGISLATION, GOVERNMENTAL REGULATIONS, ACCOUNTING RULES, TAX LAWS AND similar matters; and

 

3


 

·      ACTS OF TERRORISM, OUTBREAKS OF SO-CALLED PANDEMICS OR OTHER MAN MADE OR NATURAL DISASTERS BEYOND OUR CONTROL.

 

FOR EXAMPLE:

 

·      IF THE AVAILABILITY OF DEBT CAPITAL REMAINS RESTRICTED OR BECOMES MORE RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE OR ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE;

 

·      OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON A NUMBER OF FACTORS AND WE MAY BE UNABLE TO RESUME DISTRIBUTIONS ON OUR COMMON SHARES OR MAINTAIN DISTRIBUTIONS ON OUR PREFERRED SHARES.  IF CAPITAL MARKET CONDITIONS BECOME WORSE OR IF OUR TENANTS AND MANAGERS DO NOT PAY AMOUNTS DUE TO US, WE MAY BECOME UNABLE OR UNWILLING TO RESUME REGULAR QUARTERLY DISTRIBUTIONS TO COMMON SHAREHOLDERS.  ALSO, OUR HISTORICAL RATE OF COMMON SHARE DISTRIBUTIONS MAY NOT BE RESTORED BECAUSE OF CHANGES IN OUR EARNINGS OR OTHER CIRCUMSTANCES;

 

·      OUR ASSUMPTIONS ABOUT CONTINUING PAYMENTS FROM OUR TENANTS AND MANAGERS MAY PROVE INACCURATE, AND OUR TENANTS AND MANAGERS MAY NOT PAY ALL OF THE AMOUNTS DUE TO US.  MOREOVER, APPLICABLE TAX LAWS MAY PERMIT US TO REMAIN A REIT AND PAY DISTRIBUTIONS LESS THAN WE HAVE HISTORICALLY PAID OR EVEN LESS THAN OUR 2009 INCOME FOR FINANCIAL REPORTING PURPOSES.  RECENT CHANGES IN LAWS, SUCH AS THE DEFERRAL OF CANCELLATION OF DEBT INCOME PERMITTED BY THE 2009 ECONOMIC STIMULUS LAW, AND RECENT INTERNAL REVENUE SERVICE ACTIONS, SUCH AS THE ANNOUNCEMENT WHICH PERMITS REIT QUALIFYING DIVIDENDS TO BE PAID UP TO 90% IN SHARES, MAY PERMIT REITS LIKE US TO RETAIN OUR REIT TAX STATUS WITHOUT PAYING SUBSTANTIAL CASH DISTRIBUTIONS FOR TAXABLE YEARS ENDING ON OR BEFORE DECEMBER 31, 2009.  MOREOVER, THE AMOUNT OF 2009 DISTRIBUTIONS WHICH WE MAY BE REQUIRED TO PAY IN ORDER TO RETAIN OUR REIT TAX STATUS IS CONSIDERABLY LESS THAN THE TOTAL OF OUR HISTORICAL RATE OF QUARTERLY DISTRIBUTIONS FOR THE REMAINDER OF 2009 WOULD HAVE BEEN;

 

·      HOTEL ROOM DEMAND IS USUALLY A REFLECTION OF THE GENERAL ECONOMIC ACTIVITY IN THE COUNTRY.  IF HOTEL ROOM DEMAND BECOMES FURTHER DEPRESSED DURING THE CURRENT U.S. RECESSION, THE OPERATING RESULTS OF OUR HOTELS MAY DECLINE AND OUR OPERATORS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS;

 

·      THE CURRENT U.S. RECESSION MAY CONTINUE FOR LONGER OR BE WORSE THAN WE NOW ANTICIPATE.  SUCH CIRCUMSTANCES MAY FURTHER REDUCE THE DEMAND FOR GOODS AND SERVICES SOLD BY TA AND ADVERSELY IMPACT TA’S ABILITY TO GENERATE THE CASH FLOWS NECESSARY TO PAY OUR RENTS;

 

·      THE RECENT OUTBREAK OF SWINE FLU IN THE UNITED STATES MAY CAUSE TRAVEL TO DECLINE AND ANY SUCH DECLINE MAY ADVERSELY IMPACT THE FINANCIAL RESULTS AT OUR HOTELS AND THE ABILITY OF OUR TENANTS AND HOTEL OPERATORS TO MAKE REQUIRED PAYMENTS TO US;

 

4


 

·      THE MARRIOTT AND CRESTLINE SECURITY DEPOSITS WHICH WE HOLD ARE NOT IN SEGREGATED CASH ACCOUNTS OR OTHERWISE SEPARATE FROM OUR OTHER ASSETS AND LIABiLITIES.  ACCORDINGLY, ALTHOUGH WE MAY RECORD RECEIPT OF INCOME BY REDUCING OUR SECURITY DEPOSIT LIABILITY, WE WILL NOT RECEIVE ANY CASH PAYMENT.  BECAUSE WE WILL NOT RECEIVE A CASH PAYMENT AND BECAUSE THE AMOUNT OF THE SECURITY DEPOSITS AVAILABLE FOR FUTURE USE IS REDUCED AS WE APPLY SECURITY DEPOSITS TO COVER PAYMENT SHORTFALLS, MARRIOTT’S OR CRESTLINE’S FAILURE TO PAY MINIMUM RETURNS OR RENTS DUE TO US MAY REDUCE OUR CASH FLOWS AND OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS;

 

·      THE PRICE WHICH TA MUST PAY TO PURCHASE DIESEL FUEL AND OTHER PRODUCTS WHICH IT SELLS MAY MATERIALLY INCREASE, AND THESE PRICE INCREASES MAY INCREASE TA’s WORKING CAPITAL REQUIREMENTS MORE THAN CURRENTLY EXPECTED AND REDUCE TA’s ABILITY TO PAY OUR RENTS;

 

·      FUEL CONSERVATION EFFORTS, AN EXTENDED PERIOD OF LIMITED ACTIVITY IN THE HOUSING DEVELOPMENT INDUSTRY OR A SIGNIFICANT AND PROLONGED DECLINE IN THE IMPORT INTO THE U.S. OF CONSUMER GOODS, MAY EACH AFFECT THE DEMAND FOR TA’S GOODS AND SERVICES AND TA’S ABILITY TO PAY RENTS TO US, INCLUDING DEFERRED AMOUNTS DUE TO US; AND

 

·                  THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT STATES THAT WE HAVE REPURCHASED SOME OF OUR OUTSTANDING DEBT SECURITIES.  THE IMPLICATION OF THESE STATEMENTS MAY BE THAT WE WILL CONTINUE TO REPURCHASE OUR DEBT SECURITIES.  IN FACT, WE HAVE REPURCHASED OUR DEBT SECURITIES ON AN OPPORTUNISTIC BASIS, WHEN OPPORTUNITIES TO DO SO HAVE BEEN AVAILABLE TO US AT PRICES WE BELIEVE ARE ATTRACTIVE AND WHEN WE HAVE HAD AVAILABLE FINANCIAL RESOURCES.  AT OUR DISCRETION, WE MAY ACCELERATE, DELAY, DISCONTINUE OR RESTART MAKING SUCH PURCHASES AT ANY TIME.

 

THESE RESULTS COULD OCCUR FOR MANY DIFFERENT REASONS, SOME OF WHICH, SUCH AS NATURAL DISASTERS, PANDEMICS OR CHANGES IN OUR MANAGERS OR TENANTS REVENUES OR COSTS, OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE LARGELY BEYOND OUR CONTROL.

 

OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER “ITEM 1A. RISK FACTORS” OF OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2009 AND OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008, AS AMENDED.

 

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

 

EXCEPT AS REQUIRED BY APPLICABLE LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

 

5


 

 

 

 

 

CORPORATE INFORMATION

 


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

COMPANY PROFILE

 

The Company:

 

Strategy:

Hospitality Properties Trust, or HPT, is a real estate investment trust, or REIT. As of March 31, 2009, we owned 289 hotels and 185 travel centers located in 44 states, Puerto Rico and Canada. At March 31, 2009, our properties were operated by companies under thirteen long term management or lease agreements. We are the only investment grade rated, publicly owned hospitality REIT in the Country and we are currently included in a number of financial indices, including the S&P 400 MidCap Index, the Russell 1000 Index, the MSCI U.S. REIT index, the FTSE EPRA/NAREIT United States index and the S&P REIT Composite index.

 

Management:

HPT is managed by Reit Management & Research LLC, or RMR. RMR was founded in 1986 to manage public investments in real estate. As of March 31, 2009, RMR managed one of the largest portfolios of publicly owned real estate in North America, including approximately 1,300 properties located in 45 states, Washington, D.C., Puerto Rico and Ontario, Canada. RMR has approximately 580 employees in its headquarters and regional offices located throughout the U.S. In addition to managing HPT, RMR manages HRPT Properties Trust, a publicly traded REIT that primarily owns office buildings and industrial properties, and Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns healthcare properties. RMR also provides management services to Five Star Quality Care, Inc., a healthcare services company which is a tenant of SNH, and TravelCenters of America LLC, or TA, which is our largest tenant. An affiliate of RMR, RMR Advisors, Inc., is the investment manager of several publicly traded mutual funds, the RMR Funds, which principally invest in unaffiliated real estate companies. The public companies managed by RMR and its affiliates had combined total gross assets of approximately $16 billion as of March 31, 2009. We believe that being managed by RMR is a competitive advantage for HPT because RMR provides HPT with a depth of management and experience which may be unequaled in the real estate industry. We also believe RMR is able to provide management services to us at costs that are lower than we would have to pay for similar quality services.

 

Our business strategy is to maintain and grow an investment portfolio of high quality hotels and travel centers operated by qualified managers. Our properties are managed or leased under long term agreements that provide us cash flows in the form of returns and rents. We also seek to participate in operating improvements at our properties by charging rent increases based upon percentages of gross revenue increases at our leased properties and participating in hotel profits in excess of the minimum returns due to us at our managed hotels. Generally, we prefer to purchase multiple properties in one transaction because we believe a single operating agreement for multiple properties in diverse locations enhances the stability of our cash flows. When we buy individual properties we usually add those properties to a combination lease or management agreement for other properties that we own. We have a conservative capital structure and limit the amount of debt financing we use. We currently do not have any investments in off balance sheets entities.

 

 

 

Stock Exchange Listing:

Corporate Headquarters:

 

 

 

 

New York Stock Exchange

400 Centre Street

 

 

Newton, MA 02458

 

Trading Symbol:

(t)  (617) 964-8389

 

 

(f)  (617) 969-5730

 

Common Shares — HPT

 

 

Preferred Shares Series B — HPT-B

 

 

Preferred Shares Series C — HPT-C

 

 

 

 

 

Senior Unsecured Debt Ratings:

 

 

 

 

 

Standard & Poor’s — BBB

 

 

Moody’s — Baa2

 

 

 

 

 

Portfolio Data by Manager (as of 3/31/09):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

 

 

 

 

 

Percent of

 

 

 

 

 

Annualized

 

of Total

 

 

 

 

 

Number

 

Number

 

 

 

Percent of

 

Minimum

 

Minimum

 

 

 

Number of

 

of Rooms/

 

of Rooms/

 

Investment

 

Total

 

Return /

 

Return /

 

Manager

 

Properties

 

Suites (1)

 

Suites (1)

 

(000s)

 

Investment

 

Rent (000s)

 

Rent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InterContinental

 

131

 

20,140

 

47%

 

$1,783,672

 

28%

 

$153,682

 

26%

 

Marriott International

 

125

 

17,920

 

42%

 

1,587,497

 

24%

 

161,562

 

28%

 

Hyatt

 

22

 

2,725

 

6%

 

299,342

 

5%

 

21,777

 

4%

 

Carlson

 

11

 

2,096

 

5%

 

202,251

 

3%

 

12,920

 

2%

 

TA (2)(3)

 

185

 

N/A

 

N/A

 

2,540,698

 

40%

 

230,130

 

40%

 

Total

 

474

 

42,881

 

100%

 

$6,413,460

 

100%

 

$580,071

 

100%

 

 

Operating Statistics by Operating Agreement (Q1 2009):

 

 

 

 

 

 

 

Annualized

 

Percent

 

 

 

 

 

 

 

 

 

Number

 

Minimum

 

of Total

 

 

 

RevPAR

 

 

 

Number of

 

of Rooms/

 

Return /

 

Minimum

 

Coverage (4)

 

Change (5)

 

Operating Agreement

 

Properties

 

Suites (1)

 

Rent (000s)

 

Return / Rent

 

Q1

 

LTM

 

Q1

 

LTM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InterContinental (no. 1)

 

31

 

3,844

 

$37,882

 

7%

 

0.66x

 

1.03x

 

-16.8%

 

-4.5%

 

InterContinental (no. 2)

 

76

 

9,220

 

50,000

 

9%

 

0.80x

 

1.25x

 

-18.7%

 

-6.0%

 

InterContinental (no. 3)

 

14

 

4,139

 

44,258

 

8%

 

0.69x

 

1.08x

 

-19.1%

 

-7.2%

 

InterContinental (no. 4)

 

10

 

2,937

 

21,542

 

3%

 

0.41x

 

0.82x

 

-24.2%

 

-5.3%

 

Marriott (no. 1)

 

53

 

7,610

 

58,878

 

9%

 

0.85x

 

1.34x

 

-21.8%

 

-10.3%

 

Marriott (no. 2)

 

18

 

2,178

 

21,165

 

3%

 

0.54x

 

1.05x

 

-16.3%

 

-6.3%

 

Marriott (no. 3)

 

34

 

5,020

 

44,200

 

8%

 

0.65x

 

1.09x

 

-19.5%

 

-8.2%

 

Marriott (no. 4)

 

19

 

2,756

 

28,508

 

5%

 

0.88x

 

1.04x

 

-22.4%

 

-8.9%

 

Marriott (no. 5)

 

1

 

356

 

8,811

 

2%

 

0.16x

 

0.23x

 

-20.0%

 

-11.7%

 

Hyatt

 

22

 

2,725

 

21,777

 

4%

 

0.74x

 

0.98x

 

-16.2%

 

10.3%

 

Carlson

 

11

 

2,096

 

12,920

 

2%

 

0.77x

 

1.20x

 

-25.9%

 

-10.3%

 

TA (no. 1)(2)(3)

 

145

 

N/A

 

163,953

 

29%

 

1.12x

 

1.48x

 

N/A

 

N/A

 

TA (no. 2) (2)

 

40

 

N/A

 

66,177

 

11%

 

1.19x

 

1.57x

 

N/A

 

N/A

 

Total / Average

 

474

 

42,881

 

$580,071

 

100%

 

 

 

 

 

-20.0%

 

-6.7%

 

 

(1)

18 of our TA properties include hotels. The rooms associated with these hotels have been excluded from total number of rooms.

(2)

Effective July 1, 2008, we entered into a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5,000/month of rent under its two leases for the period July 1, 2008 until December 31, 2010. For the quarter ended March 31, 2009, TA deferred $15,000 in rents. TA rents presented in this report represent their contractual obligation and do not reflect any rent deferral.

(3)

The amount of annual minimum rent payable to us under TA agreement no. 1 is scheduled to increase to $167,641, $172,605 and $177,672 in 2010, 2011 and 2012, respectively. These represent contractual rent amounts and do not reflect the impact of any rent deferrals (see note 2).

(4)

We define coverage as combined total property sales minus all property level expenses which are not subordinated to minimum payments to us and the required FF&E reserve contributions, divided by the minimum return or minimum rent payments due to us. For some combinations, amounts have been calculated using data for periods prior to our ownership of certain properties and prior to commencement of our operating agreements. TA rent coverage ratios have been calculated based upon the contractual rent amounts and do not reflect the impact of any rent deferrals (see Note 2).

(5)

We define RevPAR as hotel room revenue per day per available room. RevPar change is the RevPar percentage change in the periods ending March 31, 2009 over the comparable year earlier periods.

 

7


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

 

INVESTOR INFORMATION

 

Board of Trustees

 

Barry M. Portnoy

 

Adam D. Portnoy

Managing Trustee

 

Managing Trustee

 

 

 

Bruce M. Gans, M.D.

 

William A. Lamkin

Independent Trustee

 

Independent Trustee

 

 

 

John L. Harrington

 

 

Independent Trustee

 

 

 

 

 

 

 

 

Senior Management

 

 

 

John G. Murray

 

Mark L. Kleifges

President and Chief Operating Officer

 

Treasurer and Chief Financial Officer

 

 

 

Ethan S. Bornstein

 

 

Senior Vice President

 

 

 

 

 

Contact Information

 

 

 

Investor Relations

 

Inquiries

Hospitality Properties Trust

 

Financial inquiries should be directed to Mark L. Kleifges,

400 Centre Street

 

Treasurer and Chief Financial Officer, at (617) 964-8389

Newton, MA 02458

 

or mkleifges@reitmr.com.

(t) (617) 964-8389

 

 

(f) (617) 969-5730

 

Investor and media inquiries should be directed to

(email) info@hptreit.com

 

Timothy A. Bonang, Director of Investor Relations, at

(website) www.hptreit.com

 

(617) 796-8232 or tbonang@hptreit.com, or Carlynn Finn,

 

 

Manager of Investor Relations at (617) 796-8232

 

 

or cfinn@hptreit.com

 

8


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

RESEARCH COVERAGE

 

Equity Research Coverage

 

Keefe, Bruyette & Woods

 

Stifel, Nicolaus

Smedes Rose

 

Rod Petrik

(212) 887-3696

 

(410) 454-4131

 

 

 

Morgan Keegan

 

UBS

Napoleon Overton

 

William Truelove

(901) 579-4865

 

(212) 713-8825

 

 

 

RBC

 

Wachovia Securities

Mike Salinsky

 

Jeffrey Donnelly

(216) 378-7627

 

(617) 603-4262

 

 

 

 

 

 

Debt Research Coverage

 

 

 

Credit Suisse

 

UBS

John Giordano

 

Michael Dimler

(212) 538-4935

 

(203) 719-3841

 

 

 

Wachovia Securities

 

 

Thierry Perrein

 

 

(704) 715-8455

 

 

 

 

 

 

 

 

Rating Agencies

 

 

 

Moody’s Investors Service

 

Standard and Poor’s

Maria Maslovsky

 

Beth Campbell

(212) 553-4831

 

(212) 438-2415

 

 

HPT is followed by the analysts and its publicly held debt is rated by the rating agencies listed above.  Please note that any opinions, estimates or forecasts regarding HPT’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions of HPT or its management.  HPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.

 

9


 

 

 

 

 

FINANCIAL INFORMATION

 


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

KEY FINANCIAL DATA

(amounts in thousands, except per share data)

 

 

 

As of and For the Three Months Ended (1)

 

 

 

3/31/2009

 

 

12/31/2008

 

 

9/30/2008

 

 

6/30/2008

 

 

3/31/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding (at end of period)

 

93,993

 

 

93,992

 

 

93,982

 

 

93,951

 

 

93,893

 

 

Weighted average common shares outstanding - basic and diluted (2)

 

93,992

 

 

93,984

 

 

93,954

 

 

93,942

 

 

93,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price at end of period

 

$

12.00

 

 

$

14.87

 

 

$

20.52

 

 

$

24.46

 

 

$

34.02

 

 

High during period

 

$

15.11

 

 

$

19.54

 

 

$

24.80

 

 

$

34.03

 

 

$

36.98

 

 

Low during period

 

$

9.09

 

 

$

7.20

 

 

$

18.87

 

 

$

24.46

 

 

$

30.40

 

 

Annualized dividends declared per share (3)

 

N/A

 

 

$

3.08

 

 

$

3.08

 

 

$

3.08

 

 

$

3.08

 

 

Annualized dividend yield (at end of period) (3)

 

N/A

 

 

20.7%

 

 

15.0%

 

 

12.6%

 

 

9.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Capitalization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

2,675,783

 

 

$

2,639,060

 

 

$

2,647,758

 

 

$

2,639,488

 

 

$

2,632,247

 

 

Plus: total shareholders’ equity

 

2,608,921

 

 

2,628,427

 

 

2,656,247

 

 

2,697,927

 

 

2,795,283

 

 

Total book capitalization

 

$

5,284,704

 

 

$

5,267,487

 

 

$

5,304,005

 

 

$

5,337,415

 

 

$

5,427,530

 

 

Total debt / total book capitalization

 

50.6%

 

 

50.1%

 

 

49.9%

 

 

49.5%

 

 

48.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,554,934

 

 

$

5,572,737

 

 

$

5,592,302

 

 

$

5,638,988

 

 

$

5,709,208

 

 

Total liabilities

 

$

2,946,013

 

 

$

2,944,310

 

 

$

2,936,054

 

 

$

2,941,061

 

 

$

2,913,925

 

 

Real estate, at cost

 

$

6,426,100

 

 

$

6,407,884

 

 

$

6,366,284

 

 

$

6,351,168

 

 

$

6,264,855

 

 

Total debt / real estate, at cost

 

41.6%

 

 

41.2%

 

 

41.6%

 

 

41.6%

 

 

42.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Capitalization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt (book value)

 

$

2,675,783

 

 

$

2,639,060

 

 

$

2,647,758

 

 

$

2,639,488

 

 

$

2,632,247

 

 

Plus: market value of preferred shares (at end of period)

 

197,897

 

 

219,718

 

 

206,965

 

 

293,808

 

 

331,157

 

 

Plus: market value of common shares (at end of period)

 

1,127,916

 

 

1,397,661

 

 

1,928,511

 

 

2,298,041

 

 

3,194,240

 

 

Total market capitalization

 

$

4,001,596

 

 

$

4,256,439

 

 

$

4,783,234

 

 

$

5,231,337

 

 

$

6,157,644

 

 

Total debt / total market capitalization

 

66.9%

 

 

62.0%

 

 

55.4%

 

 

50.5%

 

 

42.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

254,343

 

 

$

282,137

 

 

$

312,583

 

 

$

338,775

 

 

$

319,179

 

 

EBITDA (4)(7)

 

$

133,965

 

 

$

132,768

 

 

$

144,200

 

 

$

141,963

 

 

$

156,371

 

 

Net income available for common shareholders (5)(6)(7)(8)

 

$

53,613

 

 

$

44,990

 

 

$

30,481

 

 

$

(26,944

)

 

$

45,929

 

 

Funds from operations (FFO) available for common shareholders (6)(7)(9)

 

$

89,581

 

 

$

85,766

 

 

$

97,324

 

 

$

95,096

 

 

$

108,547

 

 

Common distributions declared (3)

 

N/A

 

 

$

72,374

 

 

$

72,366

 

 

$

72,342

 

 

$

72,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available for common shareholders (5)(6)(7)(8)

 

$

0.57

 

 

$

0.48

 

 

$

0.32

 

 

$

(0.29

)

 

$

0.49

 

 

FFO available for common shareholders (6)(7)(9)

 

$

0.95

 

 

$

0.91

 

 

$

1.04

 

 

$

1.01

 

 

$

1.16

 

 

Common distributions declared (3)

 

N/A

 

 

$

0.77

 

 

$

0.77

 

 

$

0.77

 

 

$

0.77

 

 

FFO payout ratio

 

N/A

 

 

84.6%

 

 

74.0%

 

 

76.2%

 

 

66.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (4) / interest expense

 

3.7x

 

 

3.4x

 

 

3.7x

 

 

3.6x

 

 

3.9x

 

 

EBITDA (4) / interest expense and preferred distributions

 

3.0x

 

 

2.9x

 

 

3.1x

 

 

3.1x

 

 

3.3x

 

 

 

(1)

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively. The unamortized note discount was $21,396 and $29,228 at March 31, 2009 and December 31, 2008, respectively, and the equity component was $43,622 and $43,770 at March 31, 2009 and December 31, 2008, respectively.

(2)

We had no outstanding dilutive common share equivalents during the periods presented.

(3)

On April 8, 2009, we announced that as a result of current conditions in the capital markets, we had suspended our regular quarterly common dividend for the remainder of 2009. During the fourth quarter of 2009, we expect to re-evaluate capital market conditions and our own earnings in order to determine what amount of common share dividends will be paid in 2009. At that time we will also determine if our common dividend will be paid in cash or a combination of cash and common shares. We expect that our dividends to common shareholders in 2009 will be at least equal to the minimum amounts required in order for us to remain a real estate investment trust for federal tax purposes.

(4)

See page 16 for our calculation of EBITDA.

(5)

Includes for the quarter ended June 30, 2008, a $53,225, or a $0.57 per share, non-cash loss on impairment related to the writedown of certain intangible assets arising from our acquisition of TA to their estimated fair value.

(6)

Includes for each of the quarters ended September 30, 2008, December 31, 2008 and March 31, 2009, a $15,000, or $0.16 per share, rent deferral by TA. We have not recognized the deferred rent as revenue due to uncertainties regarding its payment by TA in the future.

(7)

Includes for the quarter ended June 30, 2008, $19,613, or a $0.21 per share, reserve for the straight line rent receivable relating to our TA No 1. lease.

(8)

Includes for the quarter ended March 31, 2009, $26,555, or a $0.28 per share, gain on extinguishment of debt relating to our 3.8% convertible senior notes.

(9)

See page 17 for our calculation of FFO.

 

 

11


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

CONSOLIDATED BALANCE SHEET

(dollars in thousands, except share data)

 

 

 

March 31,
2009

 

 

December 31,
2008

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate properties, at cost:

 

 

 

 

 

 

 

Land

 

$

1,392,591

 

 

$

1,392,614

 

 

Buildings, improvements and equipment

 

5,033,509

 

 

5,015,270

 

 

 

 

6,426,100

 

 

6,407,884

 

 

Accumulated depreciation

 

(1,112,431

)

 

(1,060,203

)

 

 

 

5,313,669

 

 

5,347,681

 

 

Cash and cash equivalents

 

11,796

 

 

22,450

 

 

Restricted cash (FF&E reserve escrow)

 

25,014

 

 

32,026

 

 

Other assets, net

 

204,455

 

 

170,580

 

 

 

 

$

5,554,934

 

 

$

5,572,737

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving credit facility

 

$

546,000

 

 

$

396,000

 

 

Senior notes, net of discounts

 

1,693,972

 

 

1,693,730

 

 

Convertible senior notes, net of discount (1)

 

432,274

 

 

545,772

 

 

Mortgage payable

 

3,537

 

 

3,558

 

 

Security deposits

 

169,402

 

 

169,406

 

 

Accounts payable and other liabilities

 

93,149

 

 

128,078

 

 

Due to affiliates

 

2,925

 

 

3,012

 

 

Dividends payable

 

4,754

 

 

4,754

 

 

Total liabilities

 

2,946,013

 

 

2,944,310

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

Preferred shares of beneficial interest; no par value;

 

 

 

 

 

 

 

100,000,000 shares authorized:

 

 

 

 

 

 

 

Series B preferred shares; 8 7/8% cumulative redeemable;

 

 

 

 

 

 

 

3,450,000 shares issued and outstanding, aggregate liquidation preference $86,250

 

83,306

 

 

83,306

 

 

Series C preferred shares; 7% cumulative redeemable;

 

 

 

 

 

 

 

12,700,000 shares issued and outstanding, aggregate liquidation preference $317,500

 

306,833

 

 

306,833

 

 

Common shares of beneficial interest, $0.01 par value;

 

 

 

 

 

 

 

150,000,000 shares authorized; 93,992,635 and 93,991,635 shares issued and outstanding, respectively

 

940

 

 

940

 

 

Additional paid-in capital (1)

 

3,093,691

 

 

3,093,827

 

 

Accumulated other comprehensive loss

 

(1,120

)

 

(511

)

 

Cumulative net income

 

1,888,904

 

 

1,827,821

 

 

Cumulative preferred distributions

 

(131,111

)

 

(123,641

)

 

Cumulative common distributions

 

(2,632,522

)

 

(2,560,148

)

 

Total shareholders’ equity

 

2,608,921

 

 

2,628,427

 

 

 

 

$

5,554,934

 

 

$

5,572,737

 

 

 

(1)

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The unamortized note discount was $21,396 and $29,228 at March 31, 2009 and December 31, 2008, respectively, and the equity component was $43,622 and $43,770 at March 31, 2009 and December 31, 2008, respectively.

 

 

12


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

CONSOLIDATED STATEMENT OF INCOME

(in thousands, except per share data)

 

 

 

 

For the Three Months Ended

 

 

 

 

 

3/31/2009

 

 

3/31/2008

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Hotel operating revenues (1)

 

 

$

175,701

 

 

$

222,440

 

 

Minimum rent (1)(2)

 

 

73,791

 

 

89,956

 

 

FF&E reserve income (3)

 

 

4,803

 

 

6,183

 

 

Interest income

 

 

48

 

 

600

 

 

Total revenues

 

 

254,343

 

 

319,179

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Hotel operating expenses

 

 

111,454

 

 

156,376

 

 

Interest (including amortization of deferred financing costs and debt discounts of $3,357 and $3,397, respectively) (4)

 

 

36,541

 

 

39,926

 

 

Depreciation and amortization

 

 

61,848

 

 

58,251

 

 

General and administrative

 

 

9,599

 

 

11,444

 

 

Total expenses

 

 

219,442

 

 

265,997

 

 

 

 

 

 

 

 

 

 

 

Income before gain on extinguishment of debt, gain on sale of real estate and income taxes

 

 

34,901

 

 

53,182

 

 

Gain on extinguishment of debt (5)

 

 

26,555

 

 

-

 

 

Gain on sale of real estate, net (6)

 

 

-

 

 

645

 

 

Income before income taxes

 

 

61,456

 

 

53,827

 

 

Income tax expense

 

 

(373

)

 

(428

)

 

 

 

 

 

 

 

 

 

 

Net income

 

 

61,083

 

 

53,399

 

 

 

 

 

 

 

 

 

 

 

Preferred distributions

 

 

(7,470

)

 

(7,470

)

 

Net income available for common shareholders

 

 

$

53,613

 

 

$

45,929

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

93,992

 

 

93,893

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income per common share:

 

 

 

 

 

 

 

 

Net income available for common shareholders

 

 

$

0.57

 

 

$

0.49

 

 

 

See notes to consolidated statement of income on page 14.

 

 

13

 


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

NOTES TO CONSOLIDATED STATEMENT OF INCOME

 

(in thousands, except per share data)

 

(1)

 

At March 31, 2009, each of our our 289 hotels are included in one of eleven operating agreements of hotels of which 197 are leased to one of our taxable REIT subsidiaries and managed by independent hotel operating companies and 92 are leased to third parties. Our 185 travel centers are leased under two agreements. Our consolidated statement of income includes hotel operating revenues and expenses of managed hotels and rental income from our leased hotels and travel centers.

 

 

 

(2)

 

During the three months ended March 31, 2009, TA elected to defer $15,000, or $0.16 per share, of rents under the previously announced rent deferral agreement. We have not recognized the deferred rent as revenue due to uncertainties regarding its payment by TA.

 

 

 

(3)

 

Various percentages of total sales at most of our hotels are escrowed as reserves for future renovations or refurbishment, or FF&E reserve escrows. We own all the FF&E 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.

 

 

 

(4)

 

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively.

 

 

 

(5)

 

During the first quarter of 2009, we recorded a $26,555, or $0.28 per share, gain on the extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes, net of unamortized discounts and issuance costs.

 

 

 

(6)

 

During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, Arizona for $8,000 and recognized a gain on sale of $645.

 

 

14


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

CONSOLIDATED STATEMENT OF CASH FLOWS (1)

(in thousands)

 

 

 

For the Three Months Ended

 

 

 

3/31/2009

 

 

3/31/2008

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

61,083

 

 

$

53,399

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

61,848

 

 

58,251

 

Amortization of deferred financing costs and debt discounts as interest

 

3,367

 

 

3,397

 

Straight line rental income

 

-

 

 

(3,794

)

Other non-cash (income) expense, net

 

(729

)

 

(781

)

FF&E reserve income and deposits

 

(12,379

)

 

(16,230

)

Gain on extinguishment of debt

 

(26,555

)

 

-

 

Gain on sale of real estate, net

 

-

 

 

(645

)

Change in assets and liabilities:

 

 

 

 

 

 

Increase in other assets

 

(1,172

)

 

(2,998

)

Decrease in accounts payable and other

 

(29,732

)

 

(35,867

)

(Decrease) increase in due to affiliate

 

(87

)

 

1,616

 

Cash provided by operating activities

 

55,644

 

 

56,348

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Real estate acquisitions

 

(3,016

)

 

(45,877

)

FF&E reserve fundings

 

(45,921

)

 

(20,235

)

Net proceeds from sale of real estate

 

-

 

 

7,644

 

Cash used in investing activities

 

(48,937

)

 

(58,468

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Repurchase of convertible senior notes

 

(87,517

)

 

-

 

Repayment of senior notes

 

-

 

 

(150,000

)

Draws on revolving credit facility

 

185,000

 

 

303,000

 

Repayments of revolving credit facility

 

(35,000

)

 

(65,000

)

Deferred financing costs incurred

 

-

 

 

(27

)

Distributions to preferred shareholders

 

(7,470

)

 

(7,470

)

Distributions to common shareholders

 

(72,374

)

 

(72,297

)

Cash (used in) provided by financing activities

 

(17,361

)

 

8,206

 

 

 

 

 

 

 

 

(Decrease) increase in cash and cash equivalents

 

(10,654

)

 

6,086

 

Cash and cash equivalents at beginning of period

 

22,450

 

 

23,401

 

Cash and cash equivalents at end of period

 

$

11,796

 

 

$

29,487

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

 56,388

 

 

$

58,696

 

Cash paid for income taxes

 

 

130

 

 

 

170

 

 

 

 

 

 

 

 

Non cash investing activities:

 

 

 

 

 

 

Property managers’ deposits in FF&E reserve

 

$

 11,675

 

 

$

19,496

 

Property managers’ purchases with FF&E reserve

 

(28,555

)

 

(22,396

)

 

(1)

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively.

 

 

15


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

CALCULATION OF EBITDA

(in thousands)

 

 

 

For the Three Months Ended  

 

 

3/31/2009

 

3/31/2008

 

 

 

 

 

 

 

Net income (1)(2)

 

$

61,083

 

 

$

53,399

 

Plus:

Interest expense

 

36,541

 

 

39,926

 

 

Depreciation and amortization

 

61,848

 

 

58,251

 

 

Deferred percentage rent (3)

 

675

 

 

1,552

 

 

Deferred additional returns (4)

 

-

 

 

3,460

 

 

Income taxes

 

373

 

 

428

 

Less:

Gain on sale of real estate (5)

 

-

 

 

(645

)

 

Gain on extinguishment of debt (6)

 

(26,555

)

 

-

 

EBITDA

 

$

133,965

 

 

$

156,371

 

 

(1)

 

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively.

 

(2)

 

Net income for the three months ended March 31, 2009 is reduced by a $15,000 rent deferral by TA. We have not recognized the deferred rent as revenue due to uncertainties regarding its payment by TA in the future.

 

(3)

 

In calculating net income, we recognize percentage rental income received for the first, second and third quarters in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this revenue until the fourth quarter for purposes of calculating net income, we include these amounts in the calculation of EBITDA for each quarter of the year. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters.

 

(4)

 

Our share of the operating results of our managed hotels in excess of the minimum returns due to us, or additional returns, is generally determined based upon annual calculations. We recognize additional returns in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this income until the fourth quarter for purposes of calculating net income, we include these amounts in the calculation of EBITDA for each quarter of the year. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters.

 

(5)

 

During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, Arizona for $8,000 and recognized a gain on sale of $645.

 

(6)

 

During the first quarter of 2009, we recorded a $26,555, or $0.28 per share, gain on the extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes.

 

We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, depreciation and amortization expense, income tax expense, deferred percentage rent, deferred additional returns less gain on extinguishment of debt and gain on sale of real estate.  Other companies may calculate EBITDA differently than we do.  We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities. We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest and depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating performances and of operating performances among REITs. EBITDA does not represent cash generated by operating activities in accordance with  generally accepted accounting principles, or GAAP, and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity.

 

 

16


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

CALCULATION OF FUNDS FROM OPERATIONS (FFO)

(in thousands, except per share data)

 

 

 

For the Three Months Ended  

 

 

3/31/2009

 

3/31/2008

 

 

 

 

 

 

 

Net income available for common shareholders (1)(2)

 

$

53,613

 

 

$

45,929

 

Plus:

Depreciation and amortization

 

61,848

 

 

58,251

 

 

Deferred percentage rent (3)

 

675

 

 

1,552

 

 

Deferred additional returns (4)

 

-

 

 

3,460

 

Less:

Gain on extinguishment of debt (5)

 

(26,555

)

 

-

 

 

Gain on sale of real estate (6)

 

-

 

 

(645

)

FFO available for common shareholders

 

$

89,581

 

 

$

108,547

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

93,992

 

 

93,893

 

 

 

 

 

 

 

 

Net income available for common shareholders per share

 

$

0.57

 

 

$

0.49

 

FFO available for common shareholders per share

 

$

0.95

 

 

$

1.16

 

 

(1)

 

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively.

 

(2)

 

Net income for the three months ended March 31, 2009 is reduced by a $15,000, rent deferral by TA. We have not recognized the deferred rent as revenue due to uncertainties regarding its payment by TA in the future.

 

(3)

 

In calculating net income, we recognize percentage rental income received for the first, second and third quarters in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this revenue until the fourth quarter for purposes of calculating net income, we include these estimated amounts in the calculation of FFO for each quarter of the year. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters.

 

(4)

 

Our share of the operating results of our managed hotels in excess of the minimum returns due to us, or additional returns, is generally determined based upon annual calculations. We recognize additional returns in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this income until the fourth quarter for purposes of calculating net income, we include these estimated amounts in the calculation of FFO for each quarter of the year. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters.

 

(5)

 

During the first quarter of 2009, we recorded a $26,555, or $0.28 per share, gain on the extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes.

 

(6)

 

During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, Arizona for $8,000 and recognized a gain on sale of $645.

 

 

 

We compute FFO as shown in the calculation above. Our calculation of FFO differs from the National Association of Real Estate Investment Trusts, or NAREIT, definition of FFO because we include acquisition costs, if any, deferred percentage rent (see Note 3) and deferred additional returns (see Note 4) and  exclude gain on extinguishment of debt (see Note 5).  We consider FFO to be an appropriate measure of performance for a real estate investment trust, or REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense, FFO can facilitate a comparison of current operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our board of trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future capital needs and operating performance.

 

 

17


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

SEGMENT INFORMATION (1)

(in thousands)

 

 

 

For the Three Months Ended March 31, 2009

 

 

 

 

Hotels

 

 

Travel Centers

 

 

Corporate

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating revenues

 

$

175,701

 

 

$

-

 

 

$

-

 

 

$

175,701

 

 

Minimum rent

 

31,593

 

 

42,198

 

 

-

 

 

73,791

 

 

FF&E reserve income

 

4,803

 

 

-

 

 

-

 

 

4,803

 

 

Interest income

 

-

 

 

-

 

 

48

 

 

48

 

 

Total revenues

 

212,097

 

 

42,198

 

 

48

 

 

254,343

 

 

Hotel operating expenses

 

(111,454

)

 

-

 

 

-

 

 

(111,454

)

 

Operating income

 

100,643

 

 

42,198

 

 

48

 

 

142,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

36,541

 

 

36,541

 

 

Depreciation and amortization expense

 

40,409

 

 

21,439

 

 

-

 

 

61,848

 

 

General and administrative expense

 

-

 

 

-

 

 

9,599

 

 

9,599

 

 

Total expenses

 

40,409

 

 

21,439

 

 

46,140

 

 

107,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before gain on extinguishment of debt and income taxes

 

60,234

 

 

20,759

 

 

(46,092

)

 

34,901

 

 

Gain on extinguishment of debt

 

-

 

 

-

 

 

26,555

 

 

26,555

 

 

Income (loss) before income taxes

 

60,234

 

 

20,759

 

 

(19,537

)

 

61,456

 

 

Income tax expense

 

-

 

 

-

 

 

(373

)

 

(373

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

60,234

 

 

$

20,759

 

 

$

(19,910

)

 

$

61,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,195,529

 

 

$

2,331,011

 

 

$

28,394

 

 

$

5,554,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended March 31, 2008

 

 

 

 

Hotels

 

 

Travel Centers

 

 

Corporate

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel operating revenues

 

$

222,440

 

 

$

-

 

 

$

-

 

 

$

222,440

 

 

Minimum rent

 

30,890

 

 

59,066

 

 

-

 

 

89,956

 

 

FF&E reserve income

 

6,183

 

 

-

 

 

-

 

 

6,183

 

 

Interest income

 

-

 

 

-

 

 

600

 

 

600

 

 

Total revenues

 

259,513

 

 

59,066

 

 

600

 

 

319,179

 

 

Hotel operating expenses

 

(156,376

)

 

-

 

 

-

 

 

(156,376

)

 

Operating income

 

103,137

 

 

59,066

 

 

600

 

 

162,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

39,926

 

 

39,926

 

 

Depreciation and amortization expense

 

38,428

 

 

19,823

 

 

-

 

 

58,251

 

 

General and administrative expense

 

-

 

 

-

 

 

11,444

 

 

11,444

 

 

Total expenses

 

38,428

 

 

19,823

 

 

51,370

 

 

109,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before gain on sale of real estate and income taxes

 

64,709

 

 

39,243

 

 

(50,770

)

 

53,182

 

 

Gain on sale of real estate

 

645

 

 

-

 

 

-

 

 

645

 

 

Income (loss) before income taxes

 

65,354

 

 

39,243

 

 

(50,770

)

 

53,827

 

 

Income tax expense

 

-

 

 

-

 

 

(428

)

 

(428

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

65,354

 

 

$

39,243

 

 

$

(51,198

)

 

$

53,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,246,441

 

 

$

2,408,652

 

 

$

54,115

 

 

$

5,709,208

 

 

 

(1)  All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. The implementation of FSP 14-1 resulted in non-cash interest expense for the three months ended March 31, 2009 and 2008 of $2,438, or $.02 per share, and $2,357, or $0.03 per share, respectively.

 

 

18


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

DEBT SUMMARY

(dollars in thousands)

 

 

 

Interest

 

 

Principal

 

 

Maturity

 

 

Years to

 

 

 

 

Rate

 

 

Balance

 

 

Date

 

 

Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage - secured by one hotel in Overland Park, KS

 

8.300

%

 

$

3,537

 

 

07/01/11

 

 

2.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving credit facility (LIBOR + 55 bps) (1)

 

1.080

%

 

$

546,000

 

 

10/24/10

 

 

1.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes due 2010

 

9.125

%

 

$

50,000

 

 

07/15/10

 

 

1.3

 

 

Senior notes due 2012

 

6.850

%

 

125,000

 

(2)

07/15/12

 

 

3.3

 

 

Senior notes due 2013

 

6.750

%

 

300,000

 

(3)

02/15/13

 

 

3.9

 

 

Senior notes due 2015

 

5.125

%

 

300,000

 

(4)

02/15/15

 

 

5.9

 

 

Senior notes due 2016

 

6.300

%

 

275,000

 

 

06/15/16

 

 

7.2

 

 

Senior notes due 2017

 

5.625

%

 

300,000

 

 

03/15/17

 

 

8.0

 

 

Senior notes due 2018

 

6.700

%

 

350,000

 

 

01/15/18

 

 

8.8

 

 

Convertible senior notes due 2027

 

3.800

%

 

453,670

 

(5)

03/15/27

 

(6)

18.0

 

 

Total / weighted average unsecured fixed rate debt

 

5.741

%

 

$

2,153,670

 

 

 

 

 

8.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average secured fixed rate debt / total

 

8.300

%

 

$

3,537

 

 

 

 

 

2.3

 

 

Weighted average unsecured floating rate debt / total

 

1.080

%

 

546,000

 

 

 

 

 

1.6

 

 

Weighted average unsecured fixed rate debt / total

 

5.741

%

 

2,153,670

 

 

 

 

 

8.8

 

 

Weighted average debt / total

 

4.803

%

 

$

2,703,207

 

 

 

 

 

7.4

 

 

 

(1)

Represents amounts outstanding on our $750 million revolving credit facility at March 31, 2009.  Subject to certain conditions, at our option, this facility’s maturity date can be extended to October 24, 2011 upon our payment of a fee.  Interest rate is as of March 31, 2009.

 

 

(2)

In April and May of 2009, we repurchased $24.2 million of our 6.85% senior notes at a total cost of $20.6 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(3)

In April 2009, we repurchased $13.0 million of our 6.75% senior notes at a total cost of $10.4 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(4)

In April 2009, we repurchased $20.0 million of our 5.125% senior notes at a total cost of $14.2 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(5)

During the first quarter of 2009, we repurchased $121.3 million of our convertible senior notes at a total cost of $87.5 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(6)

The convertible senior notes are convertible if certain conditions are met (including certain changes in control) into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the initial exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior notes may require us to repurchase all or a portion of the notes on March 20, 2012, March 15, 2017, and March 15, 2022, or upon the occurrence of certain change in control events prior to March 20, 2012.

 

 

 

19


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

DEBT MATURITY SCHEDULE

(dollars in thousands)

 

 

 

Scheduled Principal Payments During Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured

 

 

Unsecured

 

 

Unsecured

 

 

 

 

 

 

 

Fixed Rate

 

 

Floating

 

 

Fixed

 

 

 

 

 

Year

 

Debt

 

 

Rate Debt

 

 

Rate Debt

 

 

Total

 

 

2009

 

$

63

 

 

$

-

 

 

$

-

 

 

$

63

 

 

2010

 

91

 

 

546,000

 

(1)

50,000

 

 

596,091

 

 

2011

 

3,383

 

 

-

 

 

-

 

 

3,383

 

 

2012

 

-

 

 

-

 

 

125,000

 

(2)

125,000

 

 

2013

 

-

 

 

-

 

 

300,000

 

(3)

300,000

 

 

2014

 

-

 

 

-

 

 

-

 

 

-

 

 

2015

 

-

 

 

-

 

 

300,000

 

(4)

300,000

 

 

2016

 

-

 

 

-

 

 

275,000

 

 

275,000

 

 

2017

 

-

 

 

-

 

 

300,000

 

 

300,000

 

 

2018

 

-

 

 

-

 

 

350,000

 

 

350,000

 

 

2027

 

-

 

 

-

 

 

453,670

 

(5)(6)

453,670

 

 

 

 

$

3,537

 

 

$

546,000

 

 

$

2,153,670

 

 

$

2,703,207

 

 

 

(1)

Represents amounts outstanding on our $750 million revolving credit facility at March 31, 2009. Subject to certain conditions, at our option, this facility’s maturity date can be extended to October 24, 2011 upon our payment of a fee.

 

 

(2)

In April and May of 2009, we repurchased $24.2 million of our 6.85% senior notes at a total cost of $20.6 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(3)

In April 2009, we repurchased $13.0 million of our 6.75% senior notes at a total cost of $10.4 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(4)

In April 2009, we repurchased $20.0 million of our 5.125% senior notes at a total cost of $14.2 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

(5)

The convertible senior notes are convertible if certain conditions are met (including certain changes in control) into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the initial exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior notes may require us to repurchase all or a portion of the notes on March 20, 2012, March 15, 2017, and March 15, 2022, or upon the occurrence of certain change in control events prior to March 20, 2012.

 

 

(6)

During the first quarter of 2009, we repurchased $121.3 million of our convertible senior notes at a total cost of $87.5 million, excluding accrued interest, using borrowings under our revolving credit facility.

 

 

20


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS

 

 

 

As of and For the Three Months Ended

 

 

3/31/2009

 

 

12/31/2008

 

 

9/30/2008

 

 

6/30/2008

 

 

3/31/2008

 

Leverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt / total assets

 

48.2%

 

 

47.4%

 

 

47.3%

 

 

46.8%

 

 

46.1%

 

Total debt / real estate assets, at cost

 

41.6%

 

 

41.2%

 

 

41.6%

 

 

41.6%

 

 

42.0%

 

Total debt / total book capitalization

 

50.6%

 

 

50.1%

 

 

49.9%

 

 

49.5%

 

 

48.5%

 

Total debt / total market capitalization

 

66.9%

 

 

62.0%

 

 

55.4%

 

 

50.5%

 

 

42.7%

 

Secured debt / total assets

 

0.1%

 

 

0.1%

 

 

0.1%

 

 

0.1%

 

 

0.1%

 

Variable rate debt / total debt

 

20.4%

 

 

15.0%

 

 

15.4%

 

 

15.2%

 

 

15.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1) / interest expense (2)

 

3.7x

 

 

3.4x

 

 

3.7x

 

 

3.6x

 

 

3.9x

 

EBITDA (1) / interest expense and preferred distributions (2)

 

3.0x

 

 

2.9x

 

 

3.1x

 

 

3.1x

 

 

3.3x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public Debt Covenants: (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt / adjusted total assets - allowable maximum 60.0%

 

41.4%

 

 

41.2%

 

 

41.7%

 

 

41.7%

 

 

41.9%

 

Secured debt / adjusted total assets - allowable maximum 40.0%

 

0.1%

 

 

0.1%

 

 

0.1%

 

 

0.1%

 

 

0.1%

 

Consolidated income available for debt service / debt service - required minimum 1.50x

 

3.63x

 

 

3.93x

 

 

3.41x

 

 

3.23x

 

 

3.69x

 

Total unencumbered assets to unsecured debt - required minimum 150% / 200%

 

241.4%

 

 

242.8%

 

 

240.2%

 

 

240.2%

 

 

238.6%

 

 

(1)

See page 16 for our calculation of EBITDA.

 

 

(2)

All periods presented reflect the retroactive application of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, or FSP 14-1. Interest expense includes additional non-cash interest of $2,348, $2,473, $2,434, $2,396 and $2,357 for the three months ending March 31, 2009, December 31, September 30, June 30 and March 31 2008, respectively, resulting from the adoption of FSP 14-1.

 

 

(3)

Adjusted total assets and unencumbered assets include original cost of real estate assets and acquisition costs less impairment write downs and exclude depreciation and amortization, accounts receivable and intangible assets. Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, loss on asset impairment, gains and losses on sales of property and amortization of deferred charges. Debt service excludes non-cash interest expense reulsting from the adoption of FSP 14-1.

 

 

21


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

FF&E RESERVE ESCROWS (1)

(dollars in thousands)

 

 

 

As of and For the Three Months Ended

 

HPT Owned:

 

3/31/2009

 

12/31/2008

 

9/30/2008

 

6/30/2008

 

3/31/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

FF&E reserves (beginning of period)

 

$      32,026 

 

$      37,485 

 

$      37,003 

 

$      45,469 

 

$      28,134 

 

Manager deposits

 

11,675 

 

17,286 

 

18,732 

 

16,246 

 

19,496 

 

HPT fundings (2):

 

 

 

 

 

 

 

 

 

 

 

Carlson

 

-    

 

-    

 

-    

 

125 

 

172 

 

Marriott

 

5,022 

 

4,881 

 

829 

 

5,431 

 

9,772 

 

Hyatt

 

-    

 

-    

 

1,000 

 

1,500 

 

600 

 

InterContinental

 

4,846 

 

-    

 

-    

 

-    

 

9,691 

 

Hotel improvements

 

(28,555)

 

(27,626)

 

(20,079)

 

(31,768)

 

(22,396)

 

FF&E reserves (end of period)

 

$      25,014 

 

$      32,026 

 

$      37,485 

 

$      37,003 

 

$      45,469 

 

 

 

(1)

 

Generally, each of our hotel operating agreements require the deposit of a percentage of gross hotel revenues into escrows to fund periodic hotel renovations, or FF&E reserves. For recently built or renovated hotels, this requirement may be deferred for a period. We own all the FF&E reserve escrows for our hotels.

 

 

 

(2)

 

Represents FF&E reserve deposits not funded by hotel operations, but separately funded by us. The operating agreements for our hotels generally provide that, if necessary, we will provide FF&E funding in excess of escrowed reserves. To the extent we make such fundings, our annual minimum returns or rent generally increases by a percentage of the amounts we fund.

 

 

22


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

2009 ACQUISITIONS AND DISPOSITIONS INFORMATION

(dollars in thousands)

 

2009 ACQUISITIONS (through 3/31/2009):

 

 

 

 

 

 

 

 

 

Number

 

 

 

 

 

Purchase

 

Date

 

 

 

 

 

 

 

of Rooms

 

Operating

 

Purchase

 

Price per

 

Acquired

 

Properties

 

Brand

 

Location

 

/ Suites

 

Agreement

 

Price

 

Room / Suite

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There were no acquisitions during the three months ended March 31, 2009.

 

 

 

 

 

 

2009 DISPOSITIONS (through 3/31/09):

 

 

 

 

 

 

 

 

 

Number

 

 

 

 

 

Sales

 

Date

 

 

 

 

 

 

 

of Rooms

 

Operating

 

Sales

 

Price per

 

Disposed

 

Properties

 

Brand

 

Location

 

/ Suites

 

Agreement

 

Price

 

Room / Suite

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There were no dispositions during the three months ended March 31, 2009.

 

 

23


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

2009 FINANCING ACTIVITIES

(share amounts and dollars in thousands)

 

 

 

 

For the Three Months
Ended

 

 

 

3/31/2009

 

 

 

 

 

Debt Transactions: (1)

 

 

 

New debt raised

 

$

-    

 

Total new debt

 

-    

 

 

 

 

 

Debt repurchased and retired (2)

 

(121,330)

 

Net debt

 

$

(121,330)

 

 

 

 

 

Equity Transactions:

 

 

 

New common shares issued

 

-    

 

New common equity raised, net

 

$

-    

 

 

 

 

 

New preferred shares issued

 

-    

 

New preferred equity raised, net

 

$

-    

 

Total new equity

 

$

-    

 

 

 

(1)                  Excludes drawings and repayments under our revolving credit facility.

 

(2)                  During the first quarter of 2009, we repurchased $121.3 million face amount of our convertible senior notes at a total cost of $87.5 million, excluding accrued interest, using borrowings under our revolving credit facility.  For financial reporting purposes, the carrying value of the notes repurchased were net of unamortized issuance costs of $1,553 and unamortized discounts of $5,853 resulting from the adoption of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”.

 

 

24


 

 

 

 

 

OPERATING AGREEMENTS

AND PORTFOLIO INFORMATION

 


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

SUMMARY OF OPERATING AGREEMENTS

(dollars in thousands)

 

Operating Agreement

 

Marriott (no. 1)

 

Marriott (no. 2)

 

Marriott (no. 3)

 

Marriott (no. 4)

 

Marriott (no. 5)

 

InterContinental (no. 1)

 

InterContinental (no. 2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Properties

 

53

 

18

 

34

 

19

 

1

 

31

 

76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Rooms / Suites

 

7,610

 

2,178

 

5,020

 

2,756

 

356

 

3,844

 

9,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Brands

 

Courtyard by Marriott®

 

Residence Inn by Marriott®

 

Marriott® / Residence Inn by Marriott® / Courtyard by Marriott® / TownePlace Suites by Marriott® / SpringHill Suites by Marriott®

 

Residence Inn by Marriott® / Courtyard by Marriott® / TownePlace Suites by Marriott® / SpringHill Suites by Marriott®

 

Marriott®

 

Staybridge Suites®

 

Candlewood Suites®

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of States

 

24

 

14

 

14

 

14

 

1

 

16

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manager

 

Subsidiary of Marriott International

 

Subsidiary of Marriott International

 

Subsidiaries of Marriott International

 

Subsidiaries of Marriott International

 

Subsidiary of Marriott International

 

Subsidiary of InterContinental

 

Subsidiary of InterContinental

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant

 

Subsidiary of Host Hotels & Resorts Subleased to Subsidiary of Barcelo Crestline

 

Subsidiary of Host Hotels & Resorts Subleased to Subsidiary of Barcelo Crestline

 

Our TRS

 

Subsidiary of Barcelo Crestline

 

Subsidiary of Marriott International

 

Our TRS

 

Our TRS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment at March 31, 2009 (1)

 

$590,160

 

$211,836

 

$427,544

 

$274,222

 

$83,735

 

$436,708

 

$589,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Current Term

 

2012

 

2010

 

2019

 

2015

 

2019

 

2031

 

2028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewal Options (2)

 

3 for 12 years each

 

(3)

 

2 for 15 years each

 

2 for 10 years each

 

4 for 15 years each

 

2 for 12.5 years each

 

2 for 15 years each

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Minimum Return / Minimum Rent

 

$58,878

 

$21,165

 

$44,200

 

$28,508

 

$8,811

 

$37,882

 

$50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional Return (4)

 

--

 

--

 

$711

 

--

 

--

 

--

 

$10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage Return / Rent (5)

 

5% of revenues above 1994/95 revenues

 

7.5% of revenues above 1996 revenues

 

7% of revenues above 2000/01 revenues

 

7% of revenues above 1999/2000 revenues

 

CPI based calculation

 

7.5 %of revenues above 2004/06/08 revenues

 

7.5% of revenues above 2006/07 revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Security Deposit

 

$50,540

 

$17,220

 

$36,204 (6)

 

28,508 (7)

 

--

 

$36,872 (8)

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Security Features

 

HPT controlled lockbox with minimum balance maintenance requirement; subtenant and subtenant parent minimum net worth requirement

 

HPT controlled lockbox with minimum balance maintenance requirement; subtenant and subtenant parent minimum net worth requirement

 

 

 

Tenant minimum net worth requirement

 

Marriott guarantee; parent minimum net worth requirement

 

Limited guarantee provided by InterContinental; parent minimum net worth requirement

 

Limited guarantee provided by InterContinental; parent minimum net worth requirement

 

 

(1)

Excludes expenditures made from FF&E reserves funded from hotel operations, but includes amounts funded by us separately.

(2)

Renewal options may be exercised by the manager or tenant for all, but not less than all, of the properties within each combination.

(3)

On November 13, 2008, we were notified by the tenant that it will not exercise its renewal option at the end of the current lease term. Upon expiration of the agreement, we expect to lease these hotels one of our these to TRSs and the hotel brands and management agreement with Marriott are currently not expected to change.

(4)

These management agreements provide for annual additional return payments in the amount listed, to the extent of available cash flow after payment of operating costs, funding of the FF&E reserve, payment of our minimum return and payment of certain management fees.  These amounts are generally not guaranteed or secured by deposits.

(5)

Each management contract or lease provides for payment to us of a percentage of increases in total property sales over a base year level as additional return or rent.

(6)

Marriott’s payment due on March 27, 2009, for this agreement was deficient in the amount of $838.  On April 9, 2009, we applied $838 of this deposit to cover  the minimum return deficiency.  On April 24, 2009, we did not receive the $3,409 payment due from Marriott under this agreement.  On May 7, 2009, we applied $3,409 of this deposit to cover the minimum return deficiency.  As of May 7, 2009 the balance of this security deposit is $31,957.

(7)

On April 24, 2009, we did not receive the $2,193 payment due from Crestline under this agreement.  On May 7, 2009, we applied $2,193 of this deposit to cover the minimum return deficiency.  As of May 7, 2009 the balance of this security deposit is $26,315.

(8)

A single $36,872 deposit secures InterContinental’s obligations under the InterContinental  No. 1, No. 3 and No. 4 portfolios.

 

 

26


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

SUMMARY OF OPERATING AGREEMENTS

(dollars in thousands)

 

Operating Agreement

 

InterContinental (no. 3)

 

InterContinental (no. 4)

 

Hyatt

 

Carlson

 

TA (no. 1)

 

TA (no. 2)

 

Total / Range / Average
(all investments)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Properties

 

14

 

10

 

22

 

11

 

145

 

40

 

474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Rooms / Suites

 

4,139

 

2,937

 

2,725

 

2,096

 

(1)

 

--

 

42,881 (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Brands

 

InterContinental® / Crowne Plaza® / Holiday Inn® / Staybridge Suites®

 

Crowne Plaza® / Staybridge Suites®

 

AmeriSuites® / Hyatt PlaceTM

 

Radisson Hotels & Resorts® / Park Plaza® Hotels & Resorts / Country Inn & Suites by CarlsonSM

 

TravelCenters of America®

 

Petro Stopping Centers®

 

17 Brands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of States

 

7 plus Ontario and Puerto Rico

 

5

 

14

 

7

 

39

 

25

 

44 plus Ontario and Puerto Rico

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Manager

 

Subsidiaries of InterContinental

 

Subsidiaries of InterContinental

 

Subsidiary of Hyatt

 

Subsidiary of Carlson

 

TA

 

TA

 

5 Managers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant

 

Our TRS and a subsidiary of InterContinental

 

Our TRS

 

Our TRS

 

Our TRS

 

Subsidiary of TA

 

Subsidiary of TA

 

5 Tenants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment at March 31, 2009 (2)

 

$512,373

 

$245,186

 

$299,342

 

$202,251

 

$1,835,192

 

$705,506

 

6,413,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Current Term

 

2029

 

2030

 

2030

 

2030

 

2022

 

2024

 

2010-2031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewal Options (3)

 

2 for 15 years each

 

2 for 15 years each

 

2 for 15 years each

 

2 for 15 years each

 

N/A

 

2 for 15 years each

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Minimum Return / Minimum Rent

 

$44,258

 

$21,542

 

$21,777

 

$12,920

 

$163,953 (4)(5)

 

$66,177 (4)

 

$580,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional Return (6)

 

$3,458

 

$1,750

 

50% of cash flow in excess of minimum return (7)

 

50% of cash flow in excess of minimum return (7)

 

--

 

--

 

$15,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage Return / Rent (8)

 

7.5% of revenues above 2006/07 revenues

 

7.5% of revenues above 2007 revenues

 

--

 

--

 

3% of non-fuel revenues and 0.3% of fuel revenues above 2011 revenues

 

3% of non-fuel revenues and 0.3% of fuel revenues above 2012 revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Security Deposit

 

$36,872 (9)

 

$36,872 (9)

 

--

 

--

 

--

 

--

 

$169,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Security Features

 

Limited guarantee provided by InterContinental; parent minimum net worth requirement

 

Limited guarantee provided by InterContinental; parent minimum net worth requirement

 

Limited guarantee provided by Hyatt; parent minimum net worth requirement

 

Limited guarantee provided by Carlson; parent minimum net worth requirement

 

TA guarantee

 

TA guarantee

 

 

 

 

(1)

18 of our TA properties include hotels. The rooms associated with these hotels have been excluded from total hotel rooms.

(2)

Excludes expenditures made from FF&E reserves funded from hotel operations, but includes amounts funded by us separately.

(3)

Renewal options may be exercised by the manager or tenant for all, but not less than all, of the properties within each combination.

(4)

Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5 million per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. For the three months ended March, 31, 2009, TA deferred $15 million in rents. TA rents presented in this report represent their contractual obligation and do not reflect any rent deferral.

(5)

The amount of minimum rent payable to us by TA is scheduled to increase to $167,641, $172,605 and $177,672 in 2010, 2011 and 2012, respectively.

(6)

These management agreements provide for annual additional return payments in the amount listed, to the extent of available cash flow after payment of operating costs, funding of the FF&E reserve, payment of our minimum return and payment of certain management fees. These amounts are not guaranteed or secured by deposits.

(7)

These management agreements provide for payment to us of 50% of available cash flow after payment of operating costs, funding the FF&E reserve, payment of our minimum return and reimbursement to the managers of working capital and guaranty advances, if any.

(8)

Each management contract or lease provides for payment to us of a percentage of increases in total property sales over a base year level as additional return or rent.

(9)

A single $36,872 deposit secures InterContinental’s obligations under the InterContinental No. 1, No. 3 and No. 4 portfolios.

 

 

27


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

PORTFOLIO BY OPERATING AGREEMENT, MANAGER AND BRAND

(dollars in thousands)

 

 

 

 

 

Percent of

 

 

 

Percent of

 

 

 

 

 

 

 

Annual

 

Percent of

 

 

 

Number of

 

Number of

 

Number of

 

Number of

 

 

 

Percent of

 

Investment per

 

Minimum

 

Minimum

 

 

 

Properties

 

Properties

 

Rooms / Suites (1)

 

Rooms / Suites (1)

 

Investment (2)

 

Investment

 

Room / Suite

 

Return / Rent

 

Return / Rent

 

By Operating Agreement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InterContinental (no. 1)

 

31

 

7%

 

3,844

 

9%

 

$

436,708

 

7%

 

$

114

 

$

37,882

 

7%

 

InterContinental (no. 2)

 

76

 

16%

 

9,220

 

21%

 

589,405

 

9%

 

64

 

50,000

 

9%

 

InterContinental (no. 3)

 

14

 

3%

 

4,139

 

10%

 

512,373

 

8%

 

124

 

44,258

 

8%

 

InterContinental (no. 4)

 

10

 

2%

 

2,937

 

7%

 

245,186

 

4%

 

83

 

21,542

 

3%

 

Marriott (no. 1)

 

53

 

11%

 

7,610

 

18%

 

590,160

 

9%

 

78

 

58,878

 

9%

 

Marriott (no. 2)

 

18

 

4%

 

2,178

 

5%

 

211,836

 

3%

 

97

 

21,165

 

3%

 

Marriott (no. 3)

 

34

 

7%

 

5,020

 

12%

 

427,544

 

7%

 

85

 

44,200

 

8%

 

Marriott (no. 4)

 

19

 

4%

 

2,756

 

6%

 

274,222

 

4%

 

100

 

28,508

 

5%

 

Marriott (no. 5)

 

1

 

-

 

356

 

1%

 

83,735

 

1%

 

235

 

8,811

 

2%

 

Hyatt

 

22

 

5%

 

2,725

 

6%

 

299,342

 

5%

 

110

 

21,777

 

4%

 

Carlson

 

11

 

2%

 

2,096

 

5%

 

202,251

 

3%

 

96

 

12,920

 

2%

 

TA (no. 1) (3)(4)

 

145

 

31%

 

N/A

 

N/A

 

1,835,192

 

29%

 

N/A

 

163,953

 

29%

 

TA (no. 2) (3)

 

40

 

8%

 

N/A

 

N/A

 

705,506

 

11%

 

N/A

 

66,177

 

11%

 

Total

 

474

 

100%

 

42,881

 

100%

 

$

6,413,460

 

100%

 

$

90

 

$

580,071

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Manager:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InterContinental

 

131

 

28%

 

20,140

 

47%

 

$

1,783,672

 

28%

 

$

89

 

$

153,682

 

26%

 

Marriott International

 

125

 

27%

 

17,920

 

42%

 

1,587,497

 

24%

 

89

 

161,562

 

28%

 

Hyatt

 

22

 

5%

 

2,725

 

6%

 

299,342

 

5%

 

110

 

21,777

 

4%

 

Carlson

 

11

 

2%

 

2,096

 

5%

 

202,251

 

3%

 

96

 

12,920

 

2%

 

TA (3)(4)

 

185

 

38%

 

N/A

 

N/A

 

2,540,698

 

40%

 

N/A

 

230,130

 

40%

 

Total

 

474

 

100%

 

42,881

 

100%

 

$

6,413,460

 

100%

 

$

90

 

$

580,071

 

100%

 

 

By Brand:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AmeriSuites® / Hyatt PlaceTM

 

22

 

5%

 

2,725

 

6%

 

$

299,342

 

5%

 

$

110

 

 

 

 

 

Candlewood Suites®

 

76

 

16%

 

9,220

 

22%

 

589,387

 

9%

 

64

 

 

 

 

 

Country Inn & Suites by CarlsonSM

 

5

 

1%

 

753

 

2%

 

74,827

 

1%

 

99

 

 

 

 

 

Courtyard by Marriott®

 

71

 

15%

 

10,281

 

24%

 

850,617

 

13%

 

83

 

 

 

 

 

Crowne Plaza®

 

12

 

3%

 

4,406

 

10%

 

371,431

 

6%

 

84

 

 

 

 

 

Holiday Inn®

 

3

 

1%

 

697

 

2%

 

36,010

 

1%

 

52

 

 

 

 

 

InterContinental®

 

5

 

1%

 

1,479

 

3%

 

309,949

 

5%

 

210

 

 

 

 

 

Marriott Hotels®

 

3

 

1%

 

1,349

 

3%

 

154,316

 

2%

 

114

 

 

 

 

 

Park Plaza® Hotels & Resorts

 

1

 

0%

 

209

 

0%

 

11,533

 

0%

 

55

 

 

 

 

 

Radisson Hotels & Resorts®

 

5

 

1%

 

1,134

 

3%

 

115,890

 

2%

 

102

 

 

 

 

 

Residence Inn by Marriott®

 

37

 

8%

 

4,695

 

11%

 

457,552

 

7%

 

97

 

 

 

 

 

SpringHill Suites by Marriott®

 

2

 

0%

 

264

 

1%

 

20,880

 

0%

 

79

 

 

 

 

 

Staybridge Suites®

 

35

 

7%

 

4,338

 

10%

 

476,895

 

7%

 

110

 

 

 

 

 

TownePlace Suites by Marriott®

 

12

 

3%

 

1,331

 

3%

 

104,133

 

2%

 

78

 

 

 

 

 

TravelCenters of America®

 

145

 

30%

 

N/A

 

N/A

 

1,835,192

 

29%

 

N/A

 

 

 

 

 

Petro Stopping Centers®

 

40

 

8%

 

N/A

 

N/A

 

705,506

 

11%

 

N/A

 

 

 

 

 

Total

 

474

 

100%

 

42,881

 

100%

 

$

6,413,460

 

100%

 

$

90

 

 

 

 

 

 

(1)   18 of our TA properties include a hotel. The rooms associated with these hotels have been excluded from total hotel rooms.

(2)   Includes intangibles acquired by us at the time of the our investments in the TA lease no. 1 of 145 TravelCenters of America properties. Excludes expenditures made from FF&E reserves funded from hotel operations, but includes amounts separately funded by us.

(3)   Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5 million per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. As of March 31, 2009, TA deferred $45 million in rents. TA rents presented in this report represent their contractural obligation and do not reflect any rent deferral.

(4)   The amount of annual minimum rent payable to us by TA is scheduled to increase to $167,641, $172,605 and $177,672 in 2010, 2011 and 2012, respectively.

 

 

28


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

 

OPERATING STATISTICS BY HOTEL OPERATING AGREEMENT

 

 

 

 

No. of

 

No. of
Rooms /

 

First Quarter (1)

 

 

 

Hotels

 

Suites

 

2009

 

2008

 

Change

 

ADR

 

 

 

 

 

 

 

 

 

 

 

InterContinental (no. 1)

 

31

 

3,844

 

$

108.18

 

$

115.06

 

-6.0%

 

InterContinental (no. 2)

 

76

 

9,220

 

67.53

 

72.18

 

-6.4%

 

InterContinental (no. 3)

 

14

 

4,139

 

130.49

 

147.76

 

-11.7%

 

InterContinental (no. 4)

 

10

 

2,937

 

100.62

 

115.16

 

-12.6%

 

Marriott (no. 1)

 

53

 

7,610

 

117.52

 

128.78

 

-8.7%

 

Marriott (no. 2)

 

18

 

2,178

 

108.66

 

121.96

 

-10.9%

 

Marriott (no. 3)

 

34

 

5,020

 

104.24

 

110.80

 

-5.9%

 

Marriott (no. 4)

 

19

 

2,756

 

115.96

 

128.59

 

-9.8%

 

Marriott (no. 5)

 

1

 

356

 

213.97

 

235.91

 

-9.3%

 

Hyatt

 

22

 

2,725

 

98.01

 

108.07

 

-9.3%

 

Carlson

 

11

 

2,096

 

95.77

 

110.90

 

-13.6%

 

Total

 

289

 

42,881

 

$

102.42

 

$

112.34

 

-8.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCUPANCY

 

 

 

 

 

 

 

 

 

 

 

InterContinental (no. 1)

 

31

 

3,844

 

63.6%

 

71.9%

 

-8.3 pt

 

InterContinental (no. 2)

 

76

 

9,220

 

60.5%

 

69.6%

 

-9.1 pt

 

InterContinental (no. 3)

 

14

 

4,139

 

67.3%

 

73.5%

 

-6.2 pt

 

InterContinental (no. 4)

 

10

 

2,937

 

59.6%

 

68.7%

 

-9.1 pt

 

Marriott (no. 1)

 

53

 

7,610

 

53.8%

 

62.8%

 

-9.0 pt

 

Marriott (no. 2)

 

18

 

2,178

 

62.2%

 

66.2%

 

-4.0 pt

 

Marriott (no. 3)

 

34

 

5,020

 

57.5%

 

67.2%

 

-9.7 pt

 

Marriott (no. 4)

 

19

 

2,756

 

61.0%

 

70.9%

 

-9.9 pt

 

Marriott (no. 5)

 

1

 

356

 

73.3%

 

83.1%

 

-9.8 pt

 

Hyatt

 

22

 

2,725

 

60.7%

 

65.7%

 

-5.0 pt

 

Carlson

 

11

 

2,096

 

56.3%

 

65.6%

 

-9.3 pt

 

Total

 

289

 

42,881

 

59.9%

 

68.3%

 

-8.4 pt

 

 

 

 

 

 

 

 

 

 

 

 

 

RevPAR

 

 

 

 

 

 

 

 

 

 

 

InterContinental (no. 1)

 

31

 

3,844

 

$

68.80

 

$

82.73

 

-16.8%

 

InterContinental (no. 2)

 

76

 

9,220

 

40.86

 

50.24

 

-18.7%

 

InterContinental (no. 3)

 

14

 

4,139

 

87.82

 

108.60

 

-19.1%

 

InterContinental (no. 4)

 

10

 

2,937

 

59.97

 

79.11

 

-24.2%

 

Marriott (no. 1)

 

53

 

7,610

 

63.23

 

80.87

 

-21.8%

 

Marriott (no. 2)

 

18

 

2,178

 

67.59

 

80.74

 

-16.3%

 

Marriott (no. 3)

 

34

 

5,020

 

59.94

 

74.46

 

-19.5%

 

Marriott (no. 4)

 

19

 

2,756

 

70.74

 

91.17

 

-22.4%

 

Marriott (no. 5)

 

1

 

356

 

156.84

 

196.04

 

-20.0%

 

Hyatt

 

22

 

2,725

 

59.49

 

71.00

 

-16.2%

 

Carlson

 

11

 

2,096

 

53.92

 

72.75

 

-25.9%

 

Total

 

289

 

42,881

 

$

61.35

 

$

76.73

 

-20.0%

 

 

(1)          Includes data for the calendar periods indicated, except for our Marriott® branded hotels, which include data for comparable fiscal periods.

 

 

“ADR” is average daily rate; “RevPAR” is revenue per available room.  All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods.  We have not independently verified our managers’ and tenants’ operating data.

 

 

29


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

COVERAGE BY OPERATING AGREEMENT (1)

 

 

 

For the Twelve Months Ended (2)

 

  Operating Agreement

 

3/31/2009

 

12/31/2008

 

9/30/2008

 

6/30/2008

 

3/31/2008

 

InterContinental (no. 1)

 

1.03x

 

1.13x

 

1.15x

 

1.14x

 

1.12x

 

InterContinental (no. 2)

 

1.25x

 

1.38x

 

1.42x

 

1.42x

 

1.42x

 

InterContinental (no. 3)

 

1.08x

 

1.23x

 

1.32x

 

1.36x

 

1.37x

 

InterContinental (no. 4)

 

0.82x

 

1.02x

 

1.15x

 

1.18x

 

1.30x

 

Marriott (no. 1)

 

1.34x

 

1.47x

 

1.56x

 

1.60x

 

1.62x

 

Marriott (no. 2)

 

1.05x

 

1.13x

 

1.21x

 

1.20x

 

1.25x

 

Marriott (no. 3)

 

1.09x

 

1.17x

 

1.24x

 

1.26x

 

1.26x

 

Marriott (no. 4)

 

1.04x

 

1.15x

 

1.21x

 

1.22x

 

1.23x

 

Marriott (no. 5)

 

0.23x

 

0.37x

 

0.48x

 

0.61x

 

0.76x

 

Hyatt

 

0.98x

 

1.07x

 

1.00x

 

0.86x

 

0.70x

 

Carlson

 

1.20x

 

1.42x

 

1.51x

 

1.61x

 

1.66x

 

TA (no. 1) (3)(4)

 

1.48x

 

1.43

 

1.24x

 

1.18x

 

1.20x

 

TA (no. 2) (3)(4)

 

1.57x

 

1.51

 

1.32x

 

1.16x

 

1.09x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended (2)

 

  Operating Agreement

 

3/31/2009

 

12/31/2008

 

9/30/2008

 

6/30/2008

 

3/31/2008

 

InterContinental (no. 1)

 

0.66x

 

0.87x

 

1.28x

 

1.29x

 

1.09x

 

InterContinental (no. 2)

 

0.80x

 

1.08x

 

1.56x

 

1.55x

 

1.32x

 

InterContinental (no. 3)

 

0.69x

 

0.86x

 

1.18x

 

1.59x

 

1.29x

 

InterContinental (no. 4)

 

0.41x

 

0.74x

 

0.95x

 

1.18x

 

1.22x

 

Marriott (no. 1)

 

0.85x

 

1.23x

 

1.58x

 

1.74x

 

1.40x

 

Marriott (no. 2)

 

0.54x

 

1.06x

 

1.36x

 

1.25x

 

0.87x

 

Marriott (no. 3)

 

0.65x

 

0.96x

 

1.30x

 

1.47x

 

1.01x

 

Marriott (no. 4)

 

0.88x

 

1.03x

 

0.95x

 

1.29x

 

1.37x

 

Marriott (no. 5)

 

0.16x

 

-0.01x

 

0.45x

 

0.36x

 

0.68x

 

Hyatt

 

0.74x

 

0.87x

 

1.13x

 

1.21x

 

1.09x

 

Carlson

 

0.77x

 

1.11x

 

1.40x

 

1.51x

 

1.66x

 

TA (no. 1) (3)(4)

 

1.12x

 

1.59x

 

1.80x

 

1.43x

 

0.88x

 

TA (no. 2) (3)(4)

 

1.19x

 

1.69x

 

1.91x

 

1.49x

 

0.93x

 

 

(1)   We define coverage as combined total property sales minus all property level expenses which are not subordinated to minimum payments to us and the required FF&E reserve contributions (which data is provided to us by our managers or tenants), divided by the minimum return or minimum rent payments due to us. For some combinations, amounts have been calculated using data for periods prior to our ownership of certain properties and prior to commencement of our operating agreements.

(2)   Includes data for the calendar periods indicated, except for our Marriott® branded hotels, which include data for comparable fiscal periods.

(3)   Includes data for periods prior to our ownership of some properties.

(4)   Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5 million per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. For each of the quarters ended September 30, 2008, December 31, 2008 and March 31, 2009, TA deferred $15 million in rents. TA rent coverage ratios have been calculated based upon the contractual rent amounts and do not reflect the impact of any rent deferral.

 

 

All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers’ or tenants’ operating data.

 

 

30


 

Hospitality Properties Trust

Supplemental Operating and Financial Data

March 31, 2009

 

OPERATING AGREEMENT EXPIRATION SCHEDULE

(dollars in thousands)

 

 

 

Annualized Minimum
Return / Rent

 

% of Annualized
Minimum Return /
Rent

 

Cumulative % of
Annualized Minimum
Return / Rent

 

2008

 

$

-

 

-

 

-

 

2009

 

-

 

-

 

-

 

2010

 

21,165

(1)

3.6%

 

3.6%

 

2011

 

-

 

-

 

-

 

2012

 

58,878

 

10.2%

 

13.8%

 

2013

 

-

 

-

 

13.8%

 

2014

 

-

 

-

 

13.8%

 

2015

 

28,508

(2)

4.9%

 

18.7%

 

2016

 

-

 

-

 

18.7%

 

2017

 

-

 

-

 

18.7%

 

2018 and thereafter

 

471,520

(2)

81.3%

 

100.0%

 

Total

 

$

580,071

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

Weighted average remaining term

 

14.2 years

 

 

 

 

 

 

(1)          On November 13, 2008, we were notified that the tenant will not exercise its renewal option at the end of the current lease term.  Upon expiration of the agreement, we expect to lease the hotels to one of our taxable REIT subsidiaries; the hotel brand and management agreement with Marriott are not expected to change.

 

(2)          Crestline did not pay the minimum rent due in April for the lease which expires in 2015 ($28.5 million/year) and Marriott did not pay the minimum returns due in March and April to us for our management agreement which expires in 2019 ($44,200/year).  We have sent notices to Crestline and Marriott concerning these defaults and we are having discussions with Marriott about these defaults.  We have not yet determined whether we will accelerate the terminations of these contracts if these defaults are not cured.

 

 

31