Exhibit 99.2
HOSPITALITY PROPERTIES TRUST
Fourth Quarter 2006
Supplemental Operating and Financial Data
Unless otherwise noted all amounts in this report are unaudited.
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. ALSO, 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. THESE FORWARD LOOKING STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS REPORT AND INCLUDE STATEMENTS REGARDING OUR INTENT, BELIEF OR EXPECTATION WITH RESPECT TO:
• OUR MANAGERS’ OR TENANTS’ ABILITIES TO PAY RETURNS OR RENT TO US,
• OUR ABILITY TO PURCHASE ADDITIONAL PROPERTIES,
• OUR INTENT TO REFURBISH CERTAIN OF OUR PROPERTIES,
• OUR ABILITY TO PAY INTEREST AND DEBT PRINCIPAL AND MAKE DISTRIBUTIONS,
• OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,
• OUR TAX STATUS AS A REAL ESTATE INVESTMENT TRUST,
• OUR ABILITY TO APPROPRIATELY BALANCE THE USE OF DEBT AND EQUITY AND TO RAISE CAPITAL, AND
• OTHER MATTERS.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION:
• THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS (INCLUDING PREVAILING INTEREST RATES) ON US AND OUR OPERATORS AND TENANTS,
• COMPLIANCE WITH AND CHANGES TO LAWS AND REGULATIONS AFFECTING THE REAL ESTATE, HOTEL AND TRAVEL CENTER INDUSTRIES,
• CHANGES IN FINANCING TERMS AND
• COMPETITION WITHIN THE REAL ESTATE, HOTEL AND TRAVEL CENTER INDUSTRIES GENERALLY AND REITS SPECIFICALLY.
FOR EXAMPLE:
• IF HOTEL ROOM DEMAND BECOMES DEPRESSED, THE OPERATING RESULTS OF OUR HOTELS MAY DECLINE, THE FINANCIAL RESULTS OF OUR OPERATORS AND TENANTS MAY DECLINE AND OUR OPERATORS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS.
• ALSO, WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO BUY OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, MANAGEMENT AGREEMENTS OR LEASE TERMS FOR NEW PROPERTIES.
• OTHER RISKS MAY ADVERSELY IMPACT US, AS DESCRIBED MORE FULLY IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005, OUR QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2006, AND OUR CURRENT REPORT ON FORM 8-K DATED DECEMBER 12, 2006, AS AMENDED, UNDER “ITEM 1A. RISK FACTORS”.
THESE UNEXPECTED RESULTS COULD OCCUR DUE TO MANY DIFFERENT REASONS, SOME OF WHICH, SUCH AS NATURAL DISASTERS, TERRORIST ATTACKS OR CHANGES IN OUR OPERATORS’ OR TENANTS’ COSTS OR REVENUES OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OUR CONTROL.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
COMPANY PROFILE
The Company:
Hospitality Properties Trust is a real estate investment trust, or REIT. As of December 31, 2006, we owned 310 hotels located in 38 states, Puerto Rico, and Canada, which are operated by unaffiliated hotel operating companies under eleven long term combination management or lease agreements. On January 31, 2007, we purchased TravelCenters of America, Inc. (TravelCenters) for approximately $1.9 billion. Simultaneous with the acquisition, we restructured the business of TravelCenters and completed the capitalization and spin off of the TravelCenters operating business in a newly formed company, TravelCenters of America, LLC (AMEX: TA). We retained ownership of 146 hospitality and fuel service areas located in 39 states which are operated by TA under a long term lease agreement. 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, the MSCI U.S. REIT index, the FTSE EPRA/NAREIT United States index and the S&P REIT Composite index.
Management:
Hospitality Properties Trust is managed by Reit Management & Research LLC (RMR). RMR was founded in 1986 to manage public investments in real estate. As of December 31, 2006, RMR managed one of the largest portfolios of publicly owned real estate in the United States, including over 1,000 properties, more than 91 million square feet, located in 43 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has approximately 450 employees in its headquarters and regional offices located throughout the Country. In addition to managing HPT, RMR and its affiliates also manage HRPT Properties Trust (HRP), a publicly traded REIT that primarily owns office buildings and industrial properties, Senior Housing Properties Trust (SNH), a publicly traded REIT that owns senior living properties and five publicly traded mutual funds (RMR Funds) which principally invest in securities of real estate companies (excluding securities of companies managed by RMR and its affiliates). The public companies managed by RMR and its affiliates had combined total market capitalization of approximately $14 billion as of December 31, 2006. 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 provides management services to HPT at costs that are lower than HPT would have to pay for similar quality services.
Strategy:
Our business strategy is to maintain and grow an investment portfolio of high quality hotels and travel centers operated by experienced managers. Our properties are managed or leased under long term agreements that provide us stable cash flows in the form of minimum 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 do not have any investments in joint ventures or partnerships.
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 12/31/06):
| | | | | | | | | | | | | | Percent | |
| | | | | | Percent of | | | | | | Annualized | | of Total | |
| | | | Number | | Number | | | | Percent of | | Minimum | | Minimum | |
| | Number | | of Rooms | | of Rooms | | Investment | | Total | | Return / | | Return / | |
Manager | | of Hotels | | / Suites | | / Suites | | (000s) | | Investment | | Rent (000s) | | Rent | |
| | | | | | | | | | | | | | | |
InterContinental | | 131 | | 20,140 | | 44 | % | $ | 1,752,158 | | 45 | % | $ | 148,986 | | 43 | % |
Marriott International | | 125 | | 17,926 | | 40 | % | 1,516,582 | | 39 | % | 154,406 | | 44 | % |
Hyatt | | 24 | | 2,929 | | 6 | % | 267,850 | | 7 | % | 19,150 | | 5 | % |
Carlson | | 12 | | 2,262 | | 5 | % | 210,757 | | 5 | % | 11,535 | | 3 | % |
Homestead | | 18 | | 2,399 | | 5 | % | 145,000 | | 4 | % | 15,960 | | 5 | % |
Total | | 310 | | 45,656 | | 100 | % | $ | 3,892,347 | | 100 | % | $ | 350,037 | | 100 | % |
Operating Statistics by Operating Agreement (Q4 2006):
| | | | | | Annualized | | Percent | | | | | | | | | |
| | | | Number | | Minimum | | of Total | | | | | | RevPAR | |
| | Number | | of Rooms | | Return / | | Minimum | | Coverage (1) | | Change (2) | |
Operating Agreement | | of Hotels | | / Suites | | Rent (000s) | | Return / Rent | | Q4 | | LTM | | Q4 | | LTM | |
| | | | | | | | | | | | | | | | | |
Marriott (no. 1) | | 53 | | 7,610 | | $ | 58,010 | | 17 | % | 1.37 | x | 1.49 | x | 3.3 | % | 6.4 | % |
Marriott (no. 2) | | 18 | | 2,178 | | 18,854 | | 5 | % | 1.29 | x | 1.34 | x | 6.8 | % | 9.4 | % |
Marriott (no. 3) | | 35 | | 5,382 | | 49,034 | | 14 | % | 1.05 | x | 1.11 | x | 5.3 | % | 5.9 | % |
Marriott (no. 4) | | 19 | | 2,756 | | 28,508 | | 8 | % | 1.09 | x | 1.21 | x | 5.8 | % | 12.4 | % |
InterContinental (no. 1) (3) | | 31 | | 3,844 | | 37,777 | | 11 | % | 0.90 | x | 1.07 | x | 2.2 | % | 5.4 | % |
InterContinental (no. 2) | | 76 | | 9,220 | | 50,000 | | 15 | % | 1.24 | x | 1.35 | x | 5.9 | % | 10.0 | % |
InterContinental (no. 3) | | 14 | | 4,139 | | 42,873 | | 12 | % | 1.12 | x | 1.37 | x | 6.1 | % | 10.8 | % |
InterContinental (no. 4) | | 10 | | 2,937 | | 18,336 | | 5 | % | 1.35 | x | 1.51 | x | 4.4 | % | 14.0 | % |
Hyatt (4) | | 24 | | 2,929 | | 19,150 | | 5 | % | 0.42 | x | 0.80 | x | -10.9 | % | -1.2 | % |
Carlson | | 12 | | 2,262 | | 11,535 | | 3 | % | 1.16 | x | 1.36 | x | 56.3 | % | 45.7 | % |
Homestead | | 18 | | 2,399 | | 15,960 | | 5 | % | 1.22 | x | 1.46 | x | -7.5 | % | 0.0 | % |
Total / Average | | 310 | | 45,656 | | $ | 350,037 | | 100 | % | | | | | 5.0 | % | 8.9 | % |
(1) | | We define coverage as combined total hotel sales minus all 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 operators 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 hotels and prior to commencement of our operating agreements. We have not independently verified our managers’ and tenants’ operating data. |
| | |
(2) | | We define RevPAR as hotel room revenue per day per available room. Operating data presented are based upon the operating results provided by our managers and tenants; we have not independently verified our managers’ and tenants’ operating data. |
| | |
(3) | | The calculation of RevPAR excludes one hotel which was closed from May 2005 through May 2006 due to fire damage and a newly developed hotel acquired in April 2006. |
| | |
(4) | | In connection with the rebranding of our AmeriSuites® hotels to Hyatt PlaceTM hotels during the third and fourth quarters of 2006, 12 hotels were undergoing renovations which required some hotel rooms to be taken out of service. |
5
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
INVESTOR INFORMATION
Board of Trustees |
| | |
Barry M. Portnoy | | Adam D. Portnoy |
Managing Trustee | | Managing Trustee |
| | |
Frank J. Bailey | | William A. Lamkin |
Independent Trustee | | Independent Trustee |
| | |
John L. Harrington | | |
Independent Trustee | | |
| | |
Senior Management |
| | |
John G. Murray | | Mark L. Kleifges |
President, Chief Operating Officer and Secretary | | Treasurer and Chief Financial Officer |
| | |
Ethan S. Bornstein | | |
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, Manager of Investor Relations, at |
(website) www.hptreit.com | | (617) 796-8149 or tbonang@hptreit.com. |
6
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
RESEARCH COVERAGE |
| | |
Equity Research Coverage |
| | |
BB&T Capital Markets | | RBC |
Stephanie Krewson | | Mike Salinsky |
(804) 782-8784 | | (216) 378-7627 |
| | |
Calyon Securities | | Stifel, Nicolaus |
Smedes Rose | | Rod Petrik |
(212) 408-5649 | | (410) 454-4131 |
| | |
Merrill Lynch | | UBS |
David Bragg | | William Truelove |
(212) 449-8922 | | (212) 713-8825 |
| | |
Morgan Keegan | | Wachovia Securities |
Napoleon Overton | | Jeffrey Donnelly |
(901) 579-4865 | | (617) 603-4262 |
| | |
Debt Research Coverage |
| | |
Credit Suisse | | Wachovia Securities |
Matthew Lynch | | Dan Sullivan |
(212) 325-6456 | | (704) 383-6441 |
| | |
Rating Agencies |
| | |
Moody’s Investors Service | | Standard and Poor’s |
Maria Maslovsky | | Emile Courtney |
(212) 553-4831 | | (212) 438-7824 |
| | | | |
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.
7
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
KEY FINANCIAL DATA
(amounts in thousands, except per share data)
| | As of and For the Three Months Ended | |
| | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
| | | | | | | | | | | |
Shares Outstanding: | | | | | | | | | | | |
Common shares outstanding (at end of period) (1) | | 86,284 | | 74,282 | | 71,957 | | 71,921 | | 71,921 | |
Weighted average common shares outstanding - basic and diluted (2) | | 75,587 | | 73,613 | | 71,953 | | 71,921 | | 71,921 | |
| | | | | | | | | | | |
Common Share Data: | | | | | | | | | | | |
Price at end of period | | $ | 47.53 | | $ | 47.20 | | $ | 43.92 | | $ | 43.67 | | $ | 40.10 | |
High during period | | $ | 51.46 | | $ | 48.00 | | $ | 44.10 | | $ | 46.47 | | $ | 43.30 | |
Low during period | | $ | 46.65 | | $ | 42.50 | | $ | 40.08 | | $ | 39.32 | | $ | 38.42 | |
Annualized dividends paid per share | | $ | 2.96 | | $ | 2.96 | | $ | 2.96 | | $ | 2.92 | | $ | 2.92 | |
Annualized dividend yield (at end of period) | | 6.2 | % | 6.3 | % | 6.7 | % | 6.7 | % | 7.3 | % |
| | | | | | | | | | | |
Market Capitalization: | | | | | | | | | | | |
Total debt (book value) | | $ | 1,199,830 | | $ | 1,212,699 | | $ | 1,284,567 | | $ | 1,207,478 | | $ | 960,372 | |
Plus: market value of preferred shares (at end of period) | | 88,838 | | 89,114 | | 88,596 | | 91,425 | | 88,769 | |
Plus: market value of common shares (at end of period) | | 4,101,079 | | 3,506,110 | | 3,160,351 | | 3,140,790 | | 2,884,032 | |
Total market capitalization | | $ | 5,389,747 | | $ | 4,807,923 | | $ | 4,533,514 | | $ | 4,439,693 | | $ | 3,933,173 | |
Total debt / total market capitalization | | 22.3 | % | 25.2 | % | 28.3 | % | 27.2 | % | 24.4 | % |
| | | | | | | | | | | |
Book Capitalization: | | | | | | | | | | | |
Total debt | | $ | 1,199,830 | | $ | 1,212,699 | | $ | 1,284,567 | | $ | 1,207,478 | | $ | 960,372 | |
Plus: total shareholders’ equity | | 2,447,540 | | 1,897,111 | | 1,818,780 | | 1,836,272 | | 1,855,455 | |
Total book capitalization | | $ | 3,647,370 | | $ | 3,109,810 | | $ | 3,103,347 | | $ | 3,043,750 | | $ | 2,815,827 | |
Total debt / total book capitalization | | 32.9 | % | 39.0 | % | 41.4 | % | 39.7 | % | 34.1 | % |
| | | | | | | | | | | |
Selected Balance Sheet Data: | | | | | | | | | | | |
Total assets | | $ | 3,957,463 | | $ | 3,422,692 | | $ | 3,422,889 | | $ | 3,339,158 | | $ | 3,114,607 | |
Total liabilities | | $ | 1,509,923 | | $ | 1,525,581 | | $ | 1,604,109 | | $ | 1,502,886 | | $ | 1,259,152 | |
Real estate, at cost | | $ | 4,042,017 | | $ | 4,007,591 | | $ | 3,976,217 | | $ | 3,878,838 | | $ | 3,626,693 | |
Total debt / real estate, at cost | | 29.7 | % | 30.3 | % | 32.3 | % | 31.1 | % | 26.5 | % |
| | | | | | | | | | | |
Selected Income Statement Data: | | | | | | | | | | | |
Total revenues | | $ | 258,386 | | $ | 269,115 | | $ | 272,198 | | $ | 239,716 | | $ | 213,897 | |
EBITDA (3) | | $ | 97,610 | | $ | 99,205 | | $ | 104,908 | | $ | 93,171 | | $ | 83,169 | |
Net income available for common shareholders | | $ | 59,952 | | $ | 34,649 | | $ | 33,463 | | $ | 33,319 | | $ | 46,287 | |
Funds from operations (FFO) available for common shareholders (4) | | $ | 75,623 | | $ | 76,960 | | $ | 82,365 | | $ | 72,781 | | $ | 65,522 | |
Common distributions declared | | $ | 65,184 | | $ | 54,969 | | $ | 53,248 | | $ | 52,502 | | $ | 52,502 | |
| | | | | | | | | | | |
Per Share Data: | | | | | | | | | | | |
Net income available for common shareholders | | $ | 0.79 | | $ | 0.47 | | $ | 0.47 | | $ | 0.46 | | $ | 0.64 | |
FFO available for common shareholders (4) | | $ | 1.00 | | $ | 1.05 | | $ | 1.14 | | $ | 1.01 | | $ | 0.91 | |
Common distributions declared | | $ | 0.74 | | $ | 0.74 | | $ | 0.74 | | $ | 0.73 | | $ | 0.73 | |
FFO payout ratio | | 74.0 | % | 70.5 | % | 64.6 | % | 72.1 | % | 80.1 | % |
| | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
EBITDA (3) / interest expense | | 4.8 | x | 4.8 | x | 5.0 | x | 4.9 | x | 5.1 | x |
EBITDA (3) / interest expense and preferred distributions | | 4.4 | x | 4.4 | x | 4.5 | x | 4.5 | x | 4.6 | x |
(1) | | Subsequent to December 31, 2006, the underwriters exercised an option related to our December 22, 2006, common share offering to purchase 1,800 common shares to cover overallotments. On February 13, 2007, we sold 5,000 common shares in a public offering. On February 20, 2007, the underwriters exercised their option to purchase an additional 750 common shares to cover overallotments. We expect this sale to be completed on February 23, 2007, but this sale is subject to closing conditions and no assurance can be given that the sale will close as expected. |
(2) | | HPT has no outstanding common share equivalents, such as units, convertible debt or stock options. |
(3) | | See page 13 for calculation of EBITDA. |
(4) | | See page 14 for calculation of FFO. |
9
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED BALANCE SHEET
(amounts in thousands, except share data)
| | As of | | As of | |
| | December 31, | | December 31, | |
| | 2006 | | 2005 | |
| | | | (audited) | |
ASSETS | | | | | |
| | | | | |
Real estate properties, at cost: | | | | | |
Land | | $ | 584,199 | | $ | 537,389 | |
Buildings, improvements and equipment | | 3,457,818 | | 3,089,304 | |
| | 4,042,017 | | 3,626,693 | |
Accumulated depreciation | | (707,838 | ) | (613,007 | ) |
| | 3,334,179 | | 3,013,686 | |
Cash and cash equivalents | | 553,256 | | 18,568 | |
Restricted cash (FF&E reserve escrow) | | 27,363 | | 29,063 | |
Other assets, net | | 42,665 | | 53,290 | |
| | $ | 3,957,463 | | $ | 3,114,607 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Revolving credit facility | | $ | — | | $ | 35,000 | |
Senior notes, net of discounts | | 1,196,130 | | 921,606 | |
Mortgage payable | | 3,700 | | 3,766 | |
Security deposits | | 185,366 | | 185,304 | |
Accounts payable and other liabilities | | 119,536 | | 108,595 | |
Due to affiliates | | 3,277 | | 2,967 | |
Dividends payable | | 1,914 | | 1,914 | |
Total liabilities | | 1,509,923 | | 1,259,152 | |
| | | | | |
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 | |
Common shares of beneficial interest; $0.01 par value; 100,000,000 shares authorized; 86,284,251 and 71,920,578 shares issued and outstanding, respectively | | 863 | | 719 | |
Additional paid-in capital | | 2,703,687 | | 2,059,883 | |
Cumulative net income | | 1,380,111 | | 1,211,072 | |
Cumulative preferred distributions | | (66,992 | ) | (59,336 | ) |
Cumulative common distributions | | (1,653,435 | ) | (1,440,189 | ) |
Total shareholders’ equity | | 2,447,540 | | 1,855,455 | |
| | $ | 3,957,463 | | $ | 3,114,607 | |
10
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED STATEMENT OF INCOME
(amounts in thousands, except per share data)
| | For the Three Months Ended | | For the Twelve Months Ended | |
| | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| | | | | | | | | |
Revenues: | | | | | | | | | |
Hotel operating revenues | | $ | 213,457 | | $ | 172,056 | | $ | 879,324 | | $ | 682,541 | |
Rental income | | 33,151 | | 31,955 | | 131,421 | | 126,829 | |
Percentage rent | | 5,697 | | 3,902 | | 5,697 | | 3,902 | |
FF&E reserve income | | 4,794 | | 5,567 | | 20,299 | | 19,767 | |
Interest income | | 1,287 | | 417 | | 2,674 | | 1,373 | |
Total revenues | | 258,386 | | 213,897 | | 1,039,415 | | 834,412 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Hotel operating expenses | | 132,614 | | 109,201 | | 618,334 | | 476,858 | |
Interest (including amortization of deferred financing costs of $664, $609, $2,584 and $2,894, respectively) | | 20,500 | | 16,187 | | 81,451 | | 65,263 | |
Depreciation and amortization | | 37,169 | | 34,868 | | 144,404 | | 131,792 | |
General and administrative | | 6,237 | | 5,440 | | 26,187 | | 23,296 | |
Loss on asset impairment | | — | | — | | — | | 7,300 | |
Total expenses | | 196,520 | | 165,696 | | 870,376 | | 704,509 | |
| | | | | | | | | |
Net income | | 61,866 | | 48,201 | | 169,039 | | 129,903 | |
| | | | | | | | | |
Preferred distributions | | (1,914 | ) | (1,914 | ) | (7,656 | ) | (7,656 | ) |
Net income available for common shareholders | | $ | 59,952 | | $ | 46,287 | | $ | 161,383 | | $ | 122,247 | |
| | | | | | | | | |
Weighted average common shares outstanding | | 75,587 | | 71,921 | | 73,279 | | 69,866 | |
| | | | | | | | | |
Basic and diluted net income per share | | $ | 0.79 | | $ | 0.64 | | $ | 2.20 | | $ | 1.75 | |
11
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
| | For the Twelve Months Ended | |
| | 12/31/2006 | | 12/31/2005 | |
| | | | | |
Cash flows from operating activities: | | | | | |
Net income | | $ | 169,039 | | $ | 129,903 | |
Adjustments to reconcile net income to cash provided by operating activities: | | | | | |
Depreciation and amortization | | 144,404 | | 131,792 | |
Amortization of deferred financing costs as interest | | 2,584 | | 2,894 | |
Non-cash income | | (3,082 | ) | (2,952 | ) |
FF&E reserve income and deposits | | (46,095 | ) | (32,338 | ) |
Loss on asset impairment | | — | | 7,300 | |
Change in assets and liabilities: | | | | | |
Increase in other assets | | (2,488 | ) | (1,091 | ) |
Increase in accounts payable and other | | 5,462 | | 6,492 | |
Increase in due to affiliate | | 1,729 | | 306 | |
Cash provided by operating activities | | 271,553 | | 242,306 | |
| | | | | |
Cash flows from investing activities: | | | | | |
Real estate acquisitions | | (320,776 | ) | (443,104 | ) |
Real estate acquisition deposit | | — | | (10,000 | ) |
FF&E reserve fundings | | (72,556 | ) | (45,390 | ) |
Increase in security deposits | | 2 | | 10,000 | |
Proceeds from sale of real estate | | — | | 3,227 | |
Cash used in investing activities | | (393,330 | ) | (485,267 | ) |
| | | | | |
Cash flows from financing activities: | | | | | |
Proceeds from issuance of common shares, net | | 641,652 | | 199,233 | |
Proceeds from issuance of senior notes, net | | 273,974 | | 299,442 | |
Proceeds from borrowings on revolving credit facility | | 511,000 | | 319,000 | |
Repayments of borrowings on revolving credit facility | | (546,000 | ) | (356,000 | ) |
Distributions to common shareholders | | (213,246 | ) | (201,045 | ) |
Distributions to preferred shareholders | | (7,656 | ) | (7,656 | ) |
Deferred finance costs paid | | (3,259 | ) | (7,339 | ) |
Cash provided by financing activities | | 656,465 | | 245,635 | |
| | | | | |
Increase in cash and cash equivalents | | 534,688 | | 2,674 | |
Cash and cash equivalents at beginning of period | | 18,568 | | 15,894 | |
Cash and cash equivalents at end of period | | $ | 553,256 | | $ | 18,568 | |
| | | | | |
Supplemental cash flow information: | | | | | |
Cash paid for interest | | $ | 78,157 | | $ | 56,597 | |
| | | | | |
Non cash investing activities: | | | | | |
Property managers’ deposits in FF&E reserve | | $ | 44,946 | | $ | 31,056 | |
Purchases of fixed assets with FF&E reserve | | (116,129 | ) | (76,860 | ) |
| | | | | |
Non cash financing activities: | | | | | |
Issuance of common shares | | $ | 2,296 | | $ | 761 | |
12
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CALCULATION OF EBITDA
(dollars in thousands)
| | For the Three Months Ended | | For the Twelve Months Ended | |
| | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| | | | | | | | | |
Net income | | $ | 61,866 | | $ | 48,201 | | $ | 169,039 | | $ | 129,903 | |
Plus: | Interest expense | | 20,500 | | 16,187 | | 81,451 | | 65,263 | |
| Depreciation and amortization | | 37,169 | | 34,868 | | 144,404 | | 131,792 | |
| Loss on asset impairment (1) | | — | | — | | — | | 7,300 | |
Less: | Deferred percentage rent (2) | | (4,607 | ) | (3,008 | ) | — | | — | |
| Deferred additional returns (3) | | (17,318 | ) | (13,079 | ) | — | | — | |
EBITDA | | $ | 97,610 | | $ | 83,169 | | $ | 394,894 | | $ | 334,258 | |
(1) We recorded a $7,300 loss on asset impairment to reduce the carrying value of our Prime HotelSM in Atlanta, GA to its net realizable value less cost to sell in the second quarter of 2005. We sold the hotel in September 2005.
(2) 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 the amount 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. Percentage rental income included in EBITDA was $1,090 and $894 in the fourth quarter of 2006 and 2005, respectively.
(3) 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. Typically the net operating results of our hotels are strongest during the second and third quarters of the year, which are the most active periods for business and leisure travel. 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 the amount 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. Additional returns included in EBITDA was $2,711 and $489 in the fourth quarter of 2006 and 2005, respectively.
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, depreciation and amortization expense, loss on asset impairment, deferred percentage rent and deferred hotel operating profit. 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, depreciation and amortization expense and loss on asset impairment, EBITDA can facilitate a comparison of our current operating performance with our past operating performance and of operating performance 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.
13
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(amounts in thousands, except per share data)
| | | | For the Three Months Ended | | For the Twelve Months Ended | |
| | | | 12/31/2006 | | 12/31/2005 | | 12/31/2006 | | 12/31/2005 | |
| | | | | | | | | | | |
Net income available for common shareholders | | $ | 59,952 | | $ | 46,287 | | $ | 161,383 | | $ | 122,247 | |
Plus: | FF&E deposits not in net income (1) | | 427 | | 454 | | 1,942 | | 1,941 | |
| Depreciation and amortization | | 37,169 | | 34,868 | | 144,404 | | 131,792 | |
| Loss on asset impairment (2) | | — | | — | | — | | 7,300 | |
Less: | Deferred percentage rent (3) | | (4,607 | ) | (3,008 | ) | — | | — | |
| Deferred additional returns (4) | | (17,318 | ) | (13,079 | ) | — | | — | |
FFO available for common shareholders | | $ | 75,623 | | $ | 65,522 | | $ | 307,729 | | $ | 263,280 | |
| | | | | | | | | | | |
Weighted average shares outstanding | | 75,587 | | 71,921 | | 73,279 | | 69,866 | |
| | | | | | | | | | | |
Net income available for common shareholders per share | | $ | 0.79 | | $ | 0.64 | | $ | 2.20 | | $ | 1.75 | |
FFO available for common shareholders per share | | $ | 1.00 | | $ | 0.91 | | $ | 4.20 | | $ | 3.77 | |
| | | | | | | | | | | | | | | | |
(1) 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 the FF&E Reserve escrows for all the hotels leased to our taxable REIT subsidiaries and for most of the hotels leased to third parties. We have a security and remainder interest in the FF&E Reserve escrows for the remaining hotels leased to third parties. When we own the FF&E Reserve escrows at hotels leased to third parties we report payments into the escrow as additional rent. When we have a security and remainder interest in the FF&E Reserve escrows, deposits are not included in revenue but are included in FFO. We do not report the amounts which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income in our consolidated statement of income.
(2) We recorded a $7,300 loss on asset impairment to reduce the carrying value of our Prime HotelSM in Atlanta, GA to its net realizable value less cost to sell in the second quarter of 2005. We sold the hotel in September 2005.
(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 the amount 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. Percentage rental income included in FFO was $1,090 and $894 in the fourth quarter of 2006 and 2005, respectively.
(4) Our share of the operating results of our managed hotels in excess of the minimum returns, or additional returns, due to us is generally determined based upon annual calculations. Typically the net operating results of our hotels are strongest during the second and third quarters of the year, which are the most active periods for business and leisure travel. 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 the amount 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. Additional returns included in FFO was $2,711 and $489 in the fourth quarter of 2006 and 2005, respectively.
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 FF&E deposits not included in net income (see note 1), exclude loss on asset impairment (see note 2), deferred percentage rent (see note 3) and deferred additional returns (see note 4). 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 and gain or loss on asset impairment, FFO can facilitate comparison of current operating performance among REITs. FFO 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. 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 bank 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.
14
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
DEBT SUMMARY (1)
(dollars in thousands)
| | | | Interest | | Principal | | Maturity | | Due at | | Years to | |
| | | | Rate | | Balance | | Date | | Maturity | | Maturity | |
| | | | | | | | | | | | | |
Secured Fixed Rate Debt: | | | | | | | | | | | |
| | | | | | | | | | | | | |
Mortgage - secured by one hotel in Wichita, KS | | 8.300 | % | $ | 3,700 | | 7/1/11 | | $ | 3,326 | | 4.5 | |
| | | | | | | | | | | | | |
Unsecured Debt: | | | | | | | | | | | |
| | | | | | | | | | | | | |
Unsecured Floating Rate Debt: | | | | | | | | | | | | | |
Revolving credit facility (LIBOR + 55 bps) (2) | | 5.900 | % | $ | — | | 10/24/10 | | $ | — | | 3.8 | |
| | | | | | | | | | | | | |
Unsecured Fixed Rate Debt: | | | | | | | | | | | |
Senior notes due 2008 | | 7.000 | % | $ | 150,000 | | 3/1/08 | | $ | 150,000 | | 1.2 | |
Senior notes due 2010 | | 9.125 | % | 50,000 | | 7/15/10 | | 50,000 | | 3.5 | |
Senior notes due 2012 | | 6.850 | % | 125,000 | | 7/15/12 | | 125,000 | | 5.5 | |
Senior notes due 2013 | | 6.750 | % | 300,000 | | 2/15/13 | | 300,000 | | 6.1 | |
Senior notes due 2015 | | 5.125 | % | 300,000 | | 2/15/15 | | 300,000 | | 8.1 | |
Senior notes due 2016 | | 6.300 | % | 275,000 | | 6/15/16 | | 275,000 | | 9.5 | |
Total / weighted average unsecured fixed rate debt | | 6.381 | % | $ | 1,200,000 | | | | $ | 1,200,000 | | 6.6 | |
| | | | | | | | | | | | | |
Weighted average secured fixed rate debt / total | | 8.300 | % | $ | 3,700 | | | | $ | 3,326 | | 4.5 | |
Weighted average unsecured floating rate debt / total | | 5.900 | % | — | | | | — | | 3.8 | |
Weighted average unsecured fixed rate debt / total | | 6.381 | % | 1,200,000 | | | | 1,200,000 | | 6.6 | |
Weighted average debt / total | | 6.387 | % | $ | 1,203,700 | | | | $ | 1,203,326 | | 6.6 | |
(1) On January 31, 2007, we completed our previously announced acquisition of TravelCenters of America, Inc. for approximately $1,900,000. The purchase price was partially funded with $1,400,000 of borrowings under an interim loan agreement. Borrowings under the interim loan agreement were partially repaid with the net proceeds from our offerings of common and preferred securities in February 2007 (see Note (1) on page 20).
(2) Interest rate is weighted average based on amounts outstanding during the quarter ended December 31, 2006. There were no amounts outstanding at December 31, 2006.
15
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
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 | |
2007 | | $ | 71 | | $ | — | | $ | — | | $ | 71 | |
2008 | | 77 | | — | | 150,000 | | 150,077 | |
2009 | | 84 | | — | | — | | 84 | |
2010 | | 92 | | — | | 50,000 | | 50,092 | |
2011 | | 3,376 | | — | | — | | 3,376 | |
2012 | | — | | — | | 125,000 | | 125,000 | |
2013 | | — | | — | | 300,000 | | 300,000 | |
2014 | | — | | — | | — | | — | |
2015 | | — | | — | | 300,000 | | 300,000 | |
2016 | | — | | — | | 275,000 | | 275,000 | |
| | $ | 3,700 | | $ | — | | $ | 1,200,000 | | $ | 1,203,700 | |
16
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
| | | | As of and For the Three Months Ended | |
| | | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
Leverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total debt / total assets | | 30.3 | % | 35.4 | % | 37.5 | % | 36.2 | % | 30.8 | % |
Total debt / real estate assets, at cost | | 29.7 | % | 30.3 | % | 32.3 | % | 31.1 | % | 26.5 | % |
Total debt / total market capitalization | | 22.3 | % | 25.2 | % | 28.3 | % | 27.2 | % | 24.4 | % |
Total debt / total book capitalization | | 32.9 | % | 39.0 | % | 41.4 | % | 39.7 | % | 34.1 | % |
Secured debt / total assets | | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % |
Variable rate debt / total debt | | 0.0 | % | 1.1 | % | 6.6 | % | 23.4 | % | 3.6 | % |
| | | | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | | | |
EBITDA (1) / interest expense | | 4.8x | | 4.8x | | 5.0x | | 4.9x | | 5.1x | |
EBITDA (1) / interest expense and preferred distributions | | 4.4x | | 4.4x | | 4.5x | | 4.5x | | 4.6x | |
| | | | | | | | | | | | | |
Public Debt Covenants: (2) | | | | | | | | | | | |
| | | | | | | | | | | | | |
Total debt / adjusted total assets - allowable maximum 60.0% | | 25.8 | % | 29.7 | % | 31.7 | % | 30.6 | % | 25.9 | % |
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 | | 5.47 | x | 4.06 | x | 3.92 | x | 4.25 | x | 5.82 | x |
Total unencumbered assets to unsecured debt - required minimum 200% | | 387.8 | % | 318.1 | % | 315.8 | % | 327.5 | % | 387.4 | % |
(1) See page 13 for calculation of EBITDA.
(2) Adjusted total assets and unencumbered assets include original cost of real estate assets 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.
17
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
FF&E RESERVE ESCROWS (1)
(dollars in thousands)
HPT Owned:
| | As of and For the Three Months Ended | |
| | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | 29,797 | | $ | 30,241 | | $ | 26,491 | | $ | 29,063 | | $ | 32,369 | |
Manager deposits | | 11,750 | | 13,892 | | 12,089 | | 9,095 | | 9,235 | |
InterContinental (2) | | — | | — | | — | | 6,264 | | — | |
HPT fundings: | | | | | | | | | | | |
Carlson (3) | | 404 | | 939 | | 4,188 | | 9,367 | | 15,063 | |
Marriott (4) | | 6,795 | | 10,699 | | 12,642 | | 2,021 | | 8,371 | |
Hyatt (5) | | 9,500 | | 15,000 | | — | | — | | — | |
InterContinental (6) | | 1,000 | | — | | — | | — | | — | |
Hotel improvements | | (31,883 | ) | (40,974 | ) | (25,169 | ) | (29,319 | ) | (35,975 | ) |
FF&E reserves (end of period) | | $ | 27,363 | | $ | 29,797 | | $ | 30,241 | | $ | 26,491 | | $ | 29,063 | |
| | | | | | | | | | | |
Tenant Owned: | | | | | | | | | | | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | 2 | | $ | 3 | | $ | 879 | | $ | 1,052 | | $ | 1,508 | |
Manager deposits | | 463 | | 526 | | 533 | | 448 | | 510 | |
Hotel improvements | | (463 | ) | (527 | ) | (1,409 | ) | (621 | ) | (966 | ) |
FF&E reserves (end of period) | | $ | 2 | | $ | 2 | | $ | 3 | | $ | 879 | | $ | 1,052 | |
| | | | | | | | | | | |
Total: | | | | | | | | | | | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | 29,799 | | $ | 30,244 | | $ | 27,370 | | $ | 30,115 | | $ | 33,877 | |
Manager deposits | | 12,213 | | 14,418 | | 12,622 | | 9,543 | | 9,745 | |
InterContinental (2) | | — | | — | | — | | 6,264 | | — | |
HPT fundings: | | | | | | | | | | | |
Carlson (3) | | 404 | | 939 | | 4,188 | | 9,367 | | 15,063 | |
Marriott (4) | | 6,795 | | 10,699 | | 12,642 | | 2,021 | | 8,371 | |
Hyatt (5) | | 9,500 | | 15,000 | | — | | — | | — | |
InterContinental (6) | | 1,000 | | — | | — | | — | | — | |
Hotel improvements | | (32,346 | ) | (41,501 | ) | (26,578 | ) | (29,940 | ) | (36,941 | ) |
FF&E reserves (end of period) | | $ | 27,365 | | $ | 29,799 | | $ | 30,244 | | $ | 27,370 | | $ | 30,115 | |
| | | | | | | | | | | | | | | | | | | | |
(1) Generally, each of our 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 except for escrows pursuant to one third party lease, which provides that the FF&E reserve escrow is owned by the tenant and we have a security and remainder interest in that escrow account.
(2) Represents FF&E reserve escrows purchased in connection with first quarter 2006 hotel acquisitions.
(3) Pursuant to our agreement with Carlson for the management of 12 hotels, we agreed to fund $12,000 for rebranding costs and other capital improvements. To the extent our fundings exceed $12,000, the minimum return payable by Carlson to us will increase as these funds are advanced.
(4) Represents FF&E reserve deposits for our Marriott branded hotel combinations not funded by hotel operations but separately funded by us. Our operating agreements for our Marriott branded hotel combinations 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 increases by a percentage of the amounts we fund.
(5) Pursuant to our agreement with Hyatt for the management of 24 hotels, we agreed to fund $8,000 for rebranding costs and other capital improvements. To the extent our funding exceeds $8,000, the minimum return payable by Hyatt to us will increase as these funds are advanced.
(6) Pursuant to our purchase agreement with InterContinental, we agreed to fund $2,300 for the rebranding costs and other capital improvements at the InterContinental Harbor Court in Baltimore, Maryland.
18
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
2006 ACQUISITIONS AND DISPOSITIONS INFORMATION (1)
(dollars in thousands)
2006 ACQUISITIONS (through 12/31/2006):
| | | | | | | | Number | | | | | | Purchase | |
Date | | | | | | | | of Rooms | | Operating | | Purchase | | Price per | |
Acquired | | Hotels | | Brand | | Location | | / Suites | | Agreement | | Price (2) | | Room / Suite | |
| | | | | | | | | | | | | | | |
1/6/06 | | 1 | | Harbor Court Complex | | Baltimore, MD | | 195 | | InterContinental (no. 3) | | $ | 78,000 | (3) | $ | 308 | (4) |
| | | | | | | | | | | | | | | |
1/25/06 | | 8 | | 5 Crowne Plaza®, 1 Holiday Inn Select®, and 2 Staybridge Suites® | | Atlanta, GA (2), Irvine, CA, San Jose, CA, Dallas, TX (2), Houston, TX and Las Colinas, TX | | 2,188 | | InterContinental (no. 4) | | 166,200 | | 76 | |
| | | | | | | | | | | | | | | |
4/6/06 | | 2 | | Crowne Plaza | | Miami, FL, Philadelphia, PA | | 749 | | InterContinental (no. 4) | | $ | 63,000 | | 84 | |
| | | | | | | | | | | | | | | |
4/13/06 | | 1 | | Staybridge Suites | | Parisppany, NJ | | 150 | | InterContinental (no. 1) | | $ | 21,000 | | 140 | |
| | | | | | | | | | | | | | | |
Total /Average 2006 | | 12 | | | | | | 3,282 | | | | $ | 328,200 | | $ | 95 | (4) |
(1) On January 31, 2007, we completed our previously announced acquisition of TravelCenters of America, Inc., or TravelCenters, for approximately $1,900,000. The purchase price and capitalization of TravelCenters of America, LLC, or TA, was funded with the net proceeds from the common share offering on December 22, 2006 and the overallotment on January 5, 2007 and $1,400,000 of borrowings under our interim loan agreement. (See Note (1) on Page 20).
(2) Represents the gross purchase price and excludes closing costs.
(3) Includes $18,000 allocated purchase price of the office building and parking garage components of the Harbor Court Complex.
(4) Calculated based on allocated hotel purchase price of $60,000. The Harbor Court Hotel has been rebranded as the Harbor Court InterContinental® Hotel.
2006 DISPOSITIONS (through 12/31/06):
| | | | | | | | Number | | | | | | Sales | |
Date | | | | | | | | of Rooms | | Operating | | Sales | | Price per | |
Disposed | | Hotels | | Brand | | Location | | / Suites | | Agreement | | Price | | Room / Suite | |
| |
There were no dispositions in 2006. | |
19
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
2006 FINANCING ACTIVITIES (1)
(share amounts and dollars in thousands)
| | For the Three Months Ended | |
| | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | |
| | | | | | | | | |
Debt Transactions: (2) | | | | | | | | | |
New debt raised | | $ | — | | $ | — | | $ | 275,000 | | $ | — | |
New debt assumed as part of acquisitions | | — | | — | | — | | — | |
Total new debt | | — | | — | | 275,000 | | — | |
| | | | | | | | | |
Debt retired | | — | | — | | — | | — | |
Net debt | | $ | — | | $ | — | | $ | 275,000 | | $ | — | |
| | | | | | | | | |
Equity Transactions: | | | | | | | | | |
New common shares issued | | 12,000 | | 2,300 | | — | | — | |
New common equity raised, net | | $ | 545,829 | (3) | $ | 95,823 | | $ | — | | $ | — | |
| | | | | | | | | |
New preferred shares issued | | — | | — | | — | | — | |
New preferred equity raised, net | | — | | — | | — | | — | |
Total new equity | | $ | 545,829 | | $ | 95,823 | | $ | — | | $ | — | |
(1) On January 31, 2007, we borrowed $1,400,000 under an interim loan agreement to partially fund our acquisition of TravelCenters of America, Inc. and to recapitalize the TravelCenters operating business in TravelCenters of America LLC, a subsidiary of ours which was simultaneously spun out to our shareholders.
On February 16, 2007, we sold 5,000 common shares of beneficial interest at a price of $47.67 per share in a public offering. Net proceeds from the sale of approximately $227,622 after underwriting and other offering expenses were used to repay a portion of the borrowings outstanding under our interim loan agreement. On February 20, 2007, the underwriters exercised their option to purchase an additional 750 common shares from us to cover overallotments. We expect this sale to be completed on February 23, 2007, but this sale is subject to closing conditions and no assurance can be given that the sale will close as expected. We expect to use the net proceeds from this sale of approximately $34,188 after underwriting and offering expenses to repay a portion of the borrowings outstanding under our interim loan agreement.
On February 21, 2007, HPT sold 12,000 shares of 7% Series C cumulative redeemable preferred shares in a public offering. Net proceeds from the offering of $290,250 after underwriting and other offering expenses were used to repay a portion of the amount outstanding under HPT’s interim loan agreement. The underwriters have been granted a 30-day option to purchase up to an additional 1,800 preferred shares from HPT to cover overallotments, if any.
(2) Excludes drawings and repayments under our revolving credit facility.
(3) Subsequent to December 31, 2006, the underwriters exercised an option related to our December 22, 2006, common share offering to purchase 1,800 common shares to cover overallotments.
20
OPERATING AGREEMENTS
AND PORTFOLIO INFORMATION
21
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
SUMMARY OF OPERATING AGREEMENTS
(dollars in thousands)
Operating Agreement | | Marriott (no. 1) | | Marriott (no. 2) | | Marriott (no. 3) | | Marriott (no. 4) | | Homestead | | InterContinental (no. 1) |
| | | | | | | | | | | | |
Number of Hotels | | 53 | | 18 | | 35 | | 19 | | 18 | | 31 |
| | | | | | | | | | | | |
Number of Rooms / Suites | | 7,610 | | 2,178 | | 5,382 | | 2,756 | | 2,399 | | 3,844 |
| | | | | | | | | | | | |
Hotel 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® | | Homestead Studio Suites® | | Staybridge Suites® |
| | | | | | | | | | | | |
Number of States | | 24 | | 14 | | 15 | | 14 | | 5 | | 16 |
| | | | | | | | | | | | |
Manager | | Subsidiary of Marriott International | | Subsidiary of Marriott International | | Subsidiary of Marriott International | | Subsidiary of Marriott International | | Subsidiary of BRE / Homestead Village LLC | | 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 BRE / Homestead Village LLC | | Our TRS |
| | | | | | | | | | | | |
Investment at December 31,
2006 (1) | | $581,223 | | $188,727 | | $472,410 | | $274,222 | | $145,000 | | $436,708 |
| | | | | | | | | | | | |
End of Current Term | | 2012 | | 2010 | | 2019 | | 2015 | | 2015 | | 2031 |
| | | | | | | | | | | | |
Renewal Options (2) | | 3 for 12 years each | | 1 for 10 years, 2 for 15 years each | | 2 for 15 years each | | 2 for 10 years each | | 2 for 15 years each | | 2 for 12.5 years each |
| | | | | | | | | | | | |
Annual Minimum Return / Minimum Rent | | $58,010 | | $18,854 | | $49,034 | | $28,508 | | $15,960 | | $37,777 |
| | | | | | | | | | | | |
Additional Return (3) | | — | | — | | $1,173 | | — | | — | | — |
| | | | | | | | | | | | |
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 | | 7.0% of revenues above 1999/2000 revenues | | 10.0% of revenues above 1999/2000 revenues | | 7.5% of revenues above 2004/06/08 revenues |
| | | | | | | | | | | | |
Security Deposit | | $50,540 | | $17,220 | | $36,204 | | $28,508 | | $15,960 | | $36,872 (6) |
| | | | | | | | | | | | |
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 | | Homestead parent guarantee and $15,960 letter of credit | | Limited guarantee provided by InterContinental |
Operating Agreement | | InterContinental (no. 2) | | InterContinental (no. 3) | | InterContinental (no. 4) | | Hyatt | | Carlson | | Total / Range /
Average (all
investments) |
| | | | | | | | | | | | |
Number of Hotels | | 76 | | 14 | | 10 | | 24 | | 12 | | 310 |
| | | | | | | | | | | | |
Number of Rooms / Suites | | 9,220 | | 4,139 | | 2,937 | | 2,929 | | 2,262 | | 45,656 |
| | | | | | | | | | | | |
Hotel Brands | | Candlewood Suites® | | InterContinental® / Crowne Plaza® / Holiday Inn® / Staybridge Suites® | | Crowne Plaza® / Holiday Inn® / Staybridge Suites® | | AmeriSuites® / Hyatt PlaceTM | | Radisson Hotels & Resorts® / Park Plaza® Hotels & Resorts / Country Inn & Suites by CarlsonSM | | 15 Brands |
| | | | | | | | | | | | |
Number of States | | 29 | | 7 plus Ontario and Puerto Rico | | 5 | | 14 | | 7 | | 38 plus Ontario and Puerto Rico |
| | | | | | | | | | | | |
Manager | | Subsidiary of InterContinental | | Subsidiary of InterContinental | | Subsidiary of InterContinental | | Subsidiary of Hyatt | | Subsidiary of Carlson | | 5 Managers |
| | | | | | | | | | | | |
Tenant | | Our TRS | | Our TRS and a subsidiary of InterContinental | | Our TRS | | Our TRS | | Our TRS | | 4 Tenants |
| | | | | | | | | | | | |
Investment at December 31, 2006 (1) | | $590,250 | | $496,000 | | $229,200 | | $267,850 | | $210,757 | | $3,892,347 |
| | | | | | | | | | | | |
End of Current Term | | 2028 | | 2029 | | 2030 | | 2030 | | 2030 | | 2010-2031 |
| | | | | | | | | | | | |
Renewal Options (2) | | 2 for 15 years each | | 2 for 15 years each | | 2 for 15 years each | | 2 for 15 years each | | 2 for 15 years each | | |
| | | | | | | | | | | | |
Annual Minimum Return / Minimum Rent | | $50,000 | | $42,873 | | $18,336 | | $19,150 | | $11,535 | | $350,037 |
| | | | | | | | | | | | |
Additional Return (3) | | $10,000 | | $3,458 | | $1,750 | | 50% of cash flow in excess of minimum return (4) | | 50% of cash flow in excess of minimum return (4) | | $16,381 |
| | | | | | | | | | | | |
Percentage Return / Rent (5) | | 7.5% of revenues above 2006/07 revenues | | 7.5% of revenues above 2006/07 revenues | | 7.5% of revenues above 2007 revenues | | — | | — | | |
| | | | | | | | | | | | |
Security Deposit | | — | | $36,872 (6) | | $36,872 (6) | | — | | — | | $185,304 |
| | | | | | | | | | | | |
Other Security Features | | Limited guarantee provided by InterContinental | | Limited guarantee provided by InterContinental | | Limited guarantee provided by InterContinental | | Limited guarantee provided by Hyatt | | Limited guarantee provided by Carlson | | |
(1) Excludes expenditures made from FF&E reserves funded from hotel operations, but includes amounts separately funded by us.
(2) Renewal options may be exercised by the manager or tenant for all, but not less than all, of the hotels within each combination of hotels.
(3) 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 managment fees.
(4) 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.
(5) Each management contract or lease provides for payment to us of a percentage of increases in total hotel sales over a base year levels as additional return or rent.
(6) The single $36,872 deposit secures InterContinental’s obligations under the InterContinental No. 1, No. 3 and No. 4 portfolios.
22
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
PORTFOLIO BY OPERATING AGREEMENT, MANAGER AND BRAND
(dollars in thousands)
| | | | Percent of | | | | Percent of | | | | | | | | Annual | | Percent of | |
| | Number | | Number | | Number of | | Number of | | | | Percent of | | Investment per | | Minimum | | Minimum | |
| | of Hotels | | of Hotels | | Rooms / Suites | | Rooms / Suites | | Investment (1) | | Investment | | Room / Suite | | Return / Rent | | Return / Rent | |
By Operating Agreement: | | | | | | | | | | | | | | | | | | | |
Marriott (no. 1) | | 53 | | 17 | % | | 7,610 | | 17 | % | | $ | 581,223 | | 15 | % | | $ | 76 | | $ | 58,010 | | 17 | % | |
Marriott (no. 2) | | 18 | | 6 | % | | 2,178 | | 5 | % | | 188,727 | | 5 | % | | 87 | | 18,854 | | 5 | % | |
Marriott (no. 3) | | 35 | | 11 | % | | 5,382 | | 12 | % | | 472,410 | | 12 | % | | 88 | | 49,034 | | 14 | % | |
Marriott (no. 4) | | 19 | | 6 | % | | 2,756 | | 6 | % | | 274,222 | | 7 | % | | 100 | | 28,508 | | 8 | % | |
InterContinental (no. 1) | | 31 | | 10 | % | | 3,844 | | 8 | % | | 436,708 | | 11 | % | | 114 | | 37,777 | | 11 | % | |
InterContinental (no. 2) | | 76 | | 25 | % | | 9,220 | | 20 | % | | 590,250 | | 15 | % | | 64 | | 50,000 | | 15 | % | |
InterContinental (no. 3) | | 14 | | 4 | % | | 4,139 | | 9 | % | | 496,000 | | 13 | % | | 120 | | 42,873 | | 12 | % | |
InterContinental (no. 4) | | 10 | | 3 | % | | 2,937 | | 7 | % | | 229,200 | | 6 | % | | 78 | | 18,336 | | 5 | % | |
Hyatt | | 24 | | 8 | % | | 2,929 | | 6 | % | | 267,850 | | 7 | % | | 91 | | 19,150 | | 5 | % | |
Carlson | | 12 | | 4 | % | | 2,262 | | 5 | % | | 210,757 | | 5 | % | | 93 | | 11,535 | | 3 | % | |
Homestead | | 18 | | 6 | % | | 2,399 | | 5 | % | | 145,000 | | 4 | % | | 60 | | 15,960 | | 5 | % | |
Total | | 310 | | 100 | % | | 45,656 | | 100 | % | | $ | 3,892,347 | | 100 | % | | $ | 85 | | $ | 350,037 | | 100 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
By Manager: | | | | | | | | | | | | | | | | | | | | | | | |
InterContinental | | 131 | | 42 | % | | 20,140 | | 44 | % | | $ | 1,752,158 | | 45 | % | | $ | 87 | | $ | 148,986 | | 43 | % | |
Marriott International | | 125 | | 40 | % | | 17,926 | | 40 | % | | 1,516,582 | | 39 | % | | 85 | | 154,406 | | 44 | % | |
Hyatt | | 24 | | 8 | % | | 2,929 | | 6 | % | | 267,850 | | 7 | % | | 91 | | 19,150 | | 5 | % | |
Carlson | | 12 | | 4 | % | | 2,262 | | 5 | % | | 210,757 | | 5 | % | | 93 | | 11,535 | | 3 | % | |
Homestead | | 18 | | 6 | % | | 2,399 | | 5 | % | | 145,000 | | 4 | % | | 60 | | 15,960 | | 5 | % | |
Total | | 310 | | 100 | % | | 45,656 | | 100 | % | | $ | 3,892,347 | | 100 | % | | $ | 85 | | $ | 350,037 | | 100 | % | |
By Brand: | | | | | | | | | | | | | | | | | | |
AmeriSuites® / Hyatt PlaceTM | | 24 | | 8 | % | | 2,929 | | 6 | % | | $ | 267,850 | | 7 | % | | $ | 91 | |
Candlewood Suites® | | 76 | | 24 | % | | 9,220 | | 20 | % | | 590,250 | | 15 | % | | 64 | |
Country Inn & Suites by CarlsonSM | | 5 | | 2 | % | | 753 | | 2 | % | | 74,759 | | 2 | % | | 99 | |
Courtyard by Marriott® | | 71 | | 23 | % | | 10,280 | | 23 | % | | 841,072 | | 22 | % | | 82 | |
Crowne Plaza® | | 11 | | 4 | % | | 4,057 | | 9 | % | | 342,356 | | 9 | % | | 84 | |
Holiday Inn® | | 4 | | 1 | % | | 1,046 | | 2 | % | | 52,731 | | 1 | % | | 50 | |
Homestead Studio Suites® | | 18 | | 6 | % | | 2,399 | | 5 | % | | 145,000 | | 4 | % | | 60 | |
InterContinental® | | 5 | | 2 | % | | 1,479 | | 3 | % | | 291,589 | | 8 | % | | 197 | |
Marriott Hotels® | | 3 | | 1 | % | | 1,356 | | 3 | % | | 117,254 | | 3 | % | | 86 | |
Park Plaza® Hotels & Resorts | | 3 | | 1 | % | | 534 | | 1 | % | | 31,851 | | 1 | % | | 60 | |
Radisson Hotels & Resorts® | | 4 | | 1 | % | | 975 | | 2 | % | | 104,147 | | 2 | % | | 107 | |
Residence Inn by Marriott® | | 37 | | 12 | % | | 4,695 | | 10 | % | | 433,716 | | 11 | % | | 92 | |
SpringHill Suites by Marriott® | | 2 | | 0 | % | | 264 | | 1 | % | | 20,833 | | 1 | % | | 79 | |
Staybridge Suites® | | 35 | | 11 | % | | 4,338 | | 10 | % | | 475,232 | | 12 | % | | 110 | |
TownePlace Suites by Marriott® | | 12 | | 4 | % | | 1,331 | | 3 | % | | 103,707 | | 2 | % | | 78 | |
Total | | 310 | | 100 | % | | 45,656 | | 100 | % | | $ | 3,892,347 | | 100 | % | | $ | 85 | |
(1) Excludes expenditures made from FF&E reserves funded from hotel operations, but includes amounts separately funded by us.
23
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
OPERATING STATISTICS BY OPERATING AGREEMENT
| | | | | | Fourth Quarter (1) | | Year to Date(1) | |
| | No. of
Hotels | | No. of
Rooms /
Suites | | 2006 | | 2005 | | Change | | 2006 | | 2005 | | Change | |
ADR | | | | | | | | | | | | | | | | | |
Marriott (no. 1) | | 53 | | 7,610 | | $ | 118.43 | | $ | 109.31 | | 8.3 | % | | $ | 117.76 | | $ | 108.15 | | 8.9 | % | |
Marriott (no. 2) | | 18 | | 2,178 | | 116.93 | | 103.44 | | 13.0 | % | | 112.81 | | 101.36 | | 11.3 | % | |
Marriott (no. 3) | | 35 | | 5,382 | | 111.03 | | 100.51 | | 10.5 | % | | 110.34 | | 101.33 | | 8.9 | % | |
Marriott (no. 4) | | 19 | | 2,756 | | 113.80 | | 108.43 | | 5.0 | % | | 114.74 | | 102.64 | | 11.8 | % | |
InterContinental (no. 1)(2) | | 29 | | 3,554 | | 103.12 | | 97.05 | | 6.3 | % | | 104.38 | | 96.71 | | 7.9 | % | |
InterContinental (no. 2) | | 76 | | 9,220 | | 67.80 | | 62.19 | | 9.0 | % | | 66.50 | | 61.03 | | 9.0 | % | |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 133.51 | | 123.20 | | 8.4 | % | | 134.49 | | 122.97 | | 9.4 | % | |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 103.01 | | 94.89 | | 8.6 | % | | 101.22 | | 90.19 | | 12.2 | % | |
Hyatt(4) (5) | | 24 | | 2,929 | | 80.51 | | 73.46 | | 9.6 | % | | 82.02 | | 75.45 | | 8.7 | % | |
Carlson(3) (4) | | 12 | | 2,262 | | 92.87 | | 81.25 | | 14.3 | % | | 92.73 | | 81.64 | | 13.6 | % | |
Homestead | | 18 | | 2,399 | | 57.34 | | 55.76 | | 2.8 | % | | 61.70 | | 56.44 | | 9.3 | % | |
Total/Average | | 308 | | 45,366 | | $ | 100.68 | | $ | 92.44 | | 8.9 | % | | $ | 99.00 | | $ | 90.28 | | 9.7 | % | |
| | | | | | | | | | | | | | | | | |
OCCUPANCY | | | | | | | | | | | | | | | | | |
Marriott (no. 1) | | 53 | | 7,610 | | 66.1 | % | | 69.3 | % | | -3.2 | pt | 69.3 | % | | 70.9 | % | | -1.6 | pt |
Marriott (no. 2) | | 18 | | 2,178 | | 75.5 | % | | 79.9 | % | | -4.4 | pt | 79.9 | % | | 81.3 | % | | -1.4 | pt |
Marriott (no. 3) | | 35 | | 5,382 | | 71.8 | % | | 75.3 | % | | -3.5 | pt | 75.4 | % | | 77.5 | % | | -2.1 | pt |
Marriott (no. 4) | | 19 | | 2,756 | | 70.8 | % | | 70.2 | % | | 0.6 | pt | 73.2 | % | | 72.8 | % | | 0.4 | pt |
InterContinental (no. 1)(2) | | 29 | | 3,554 | | 69.9 | % | | 72.7 | % | | -2.8 | pt | 76.0 | % | | 77.8 | % | | -1.8 | pt |
InterContinental (no. 2) | | 76 | | 9,220 | | 70.5 | % | | 72.6 | % | | -2.1 | pt | 75.7 | % | | 75.0 | % | | 0.7 | pt |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 69.3 | % | | 70.8 | % | | -1.5 | pt | 75.1 | % | | 74.1 | % | | 1.0 | pt |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 67.7 | % | | 70.4 | % | | -2.7 | pt | 71.8 | % | | 70.7 | % | | 1.1 | pt |
Hyatt(4) (5) | | 24 | | 2,929 | | 53.5 | % | | 65.8 | % | | -12.3 | pt | 61.1 | % | | 67.2 | % | | -6.1 | pt |
Carlson(3) (4) | | 12 | | 2,262 | | 61.4 | % | | 44.9 | % | | 16.5 | pt | 63.6 | % | | 49.6 | % | | 14.0 | pt |
Homestead | | 18 | | 2,399 | | 66.4 | % | | 73.8 | % | | -7.4 | pt | 70.7 | % | | 77.3 | % | | -6.6 | pt |
Total/Average | | 308 | | 45,366 | | 68.2 | % | | 70.7 | % | | -2.5 | pt | 72.5 | % | | 73.0 | % | | -0.5 | pt |
| | | | | | | | | | | | | | | | | |
RevPAR | | | | | | | | | | | | | | | | | |
Marriott (no. 1) | | 53 | | 7,610 | | $ | 78.28 | | $ | 75.75 | | 3.3 | % | | $ | 81.61 | | $ | 76.68 | | 6.4 | % | |
Marriott (no. 2) | | 18 | | 2,178 | | 88.28 | | 82.65 | | 6.8 | % | | 90.14 | | 82.41 | | 9.4 | % | |
Marriott (no. 3) | | 35 | | 5,382 | | 79.72 | | 75.68 | | 5.3 | % | | 83.20 | | 78.53 | | 5.9 | % | |
Marriott (no. 4) | | 19 | | 2,756 | | 80.57 | | 76.12 | | 5.8 | % | | 83.99 | | 74.72 | | 12.4 | % | |
InterContinental (no. 1)(2) | | 29 | | 3,554 | | 72.08 | | 70.56 | | 2.2 | % | | 79.33 | | 75.24 | | 5.4 | % | |
InterContinental (no. 2) | | 76 | | 9,220 | | 47.80 | | 45.15 | | 5.9 | % | | 50.34 | | 45.77 | | 10.0 | % | |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 92.52 | | 87.23 | | 6.1 | % | | 101.00 | | 91.12 | | 10.8 | % | |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 69.74 | | 66.80 | | 4.4 | % | | 72.68 | | 63.76 | | 14.0 | % | |
Hyatt(4) (5) | | 24 | | 2,929 | | 43.07 | | 48.34 | | -10.9 | % | | 50.11 | | 50.70 | | -1.2 | % | |
Carlson(3) (4) | | 12 | | 2,262 | | 57.02 | | 36.48 | | 56.3 | % | | 58.98 | | 40.49 | | 45.7 | % | |
Homestead | | 18 | | 2,399 | | 38.07 | | 41.15 | | -7.5 | % | | 43.62 | | 43.63 | | 0.0 | % | |
Total/Average | | 308 | | 45,366 | | $ | 68.66 | | $ | 65.36 | | 5.0 | % | | $ | 71.78 | | $ | 65.90 | | 8.9 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | | Includes data for the calendar periods indicated, except for our Marriott® branded hotels, which include data for comparable fiscal periods. |
(2) | | The calculations of Occupancy and RevPAR exclude operating statistics of one hotel which was closed from May 2005 through May 2006 due to fire damage and a newly developed hotel acquired in April 2006. |
(3) | | Includes data for periods prior to our ownership of some hotels. |
(4) | | Includes data for periods some hotels were not operated by the current manager. |
(5) | | In connection with the rebranding of our AmeriSuites® hotels to Hyatt PlaceTM hotels during the third and fourth quarters of 2006 twelve hotels were undergoing renovations which required some hotel rooms to be taken out of service. |
| | |
| | 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. |
24
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
COVERAGE BY OPERATING AGREEMENT (1)
| | For the Twelve Months Ended (2) | |
Operating Agreement | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
Marriott (no. 1) | | 1.49x | | 1.50x | | 1.49x | | 1.45x | | 1.41x | |
Marriott (no. 2) | | 1.34x | | 1.29x | | 1.21x | | 1.17x | | 1.13x | |
Marriott (no. 3) | | 1.11x | | 1.09x | | 1.07x | | 1.05x | | 1.03x | |
Marriott (no. 4) | | 1.21x | | 1.20x | | 1.17x | | 1.10x | | 0.99x | |
InterContinental (no. 1) | | 1.07x | | 1.06x | | 0.99x | | 0.95x | | 0.91x | |
InterContinental (no. 2) | | 1.35x | | 1.36x | | 1.35x | | 1.33x | | 1.33x | |
InterContinental (no. 3) (3) (4) | | 1.37x | | 1.41x | | 1.44x | | 1.37x | | 1.29x | |
InterContinental (no. 4) (3) | | 1.51x | | 1.49x | | 1.46x | | 1.43x | | 1.29x | |
Hyatt (4) (5) | | 0.80x | | 0.92x | | 1.04x | | 1.06x | | 1.03x | |
Carlson (3) (4) | | 1.36x | | 1.20x | | 0.98x | | 0.96x | | 0.90x | |
Homestead | | 1.46x | | 1.51x | | 1.53x | | 1.50x | | 1.46x | |
| | For the Three Months Ended (2) | |
Operating Agreement | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | | 12/31/2005 | |
Marriott (no. 1) | | 1.37x | | 1.53x | | 1.71x | | 1.40x | | 1.39x | |
Marriott (no. 2) | | 1.29x | | 1.53x | | 1.43x | | 1.11x | | 1.13x | |
Marriott (no. 3) | | 1.05x | | 1.20x | | 1.27x | | 0.93x | | 0.98x | |
Marriott (no. 4) | | 1.09x | | 0.98x | | 1.35x | | 1.47x | | 1.06x | |
InterContinental (no. 1) | | 0.90x | | 1.26x | | 1.17x | | 0.96x | | 0.84x | |
InterContinental (no. 2) | | 1.24x | | 1.44x | | 1.52x | | 1.20x | | 1.26x | |
InterContinental (no. 3) (3) (4) | | 1.12x | | 1.16x | | 1.71x | | 1.48x | | 1.26x | |
InterContinental (no. 4) (3) | | 1.35x | | 1.27x | | 1.71x | | 1.70x | | 1.29x | |
Hyatt (4) (5) | | 0.42x | | 0.60x | | 1.07x | | 1.15x | | 0.86x | |
Carlson (3) (4) | | 1.16x | | 1.56x | | 1.29x | | 1.43x | | 0.33x | |
Homestead | | 1.22x | | 1.32x | | 1.69x | | 1.60x | | 1.41x | |
(1) | | We define coverage as combined total hotel sales minus all 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 hotels 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 hotels. |
| | |
(4) | | Includes data for periods some hotels were not operated by the current manager. |
| | |
(5) | | In connection with the rebranding of our AmeriSuites® hotels to Hyatt PlaceTM hotels during the third and fourth quarters of 2006 twelve hotels were undergoing renovations which required some hotel rooms to be taken out of service. |
| | |
| | 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. |
25
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2006
OPERATING AGREEMENT EXPIRATION SCHEDULE
(dollars in thousands)
| | Annualized Minimum
Return / Rent | | % of Annualized
Minimum Return
/ Rent | | Cumulative % of
Annualized Minimum
Return / Rent | |
2007 | | $ | — | | — | | — | |
2008 | | — | | — | | — | |
2009 | | — | | — | | — | |
2010 | | 18,854 | | 5.4 | % | 5.4 | % |
2011 | | — | | — | | 5.4 | % |
2012 | | 58,010 | | 16.6 | % | 22.0 | % |
2013 | | — | | — | | 22.0 | % |
2014 | | — | | — | | 22.0 | % |
2015 | | 44,468 | | 12.7 | % | 34.7 | % |
2016 | | — | | — | | 34.7 | % |
2017 and thereafter | | 228,705 | | 65.3 | % | 100.0 | % |
Total | | $ | 350,037 | | 100.0 | % | | |
| | | | | | | |
Weighted average remaining term | | 16.1 years | | | | | |
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