Exhibit 99.2
HOSPITALITY PROPERTIES TRUST
Fourth Quarter 2007
Supplemental Operating and Financial Data
Unless otherwise noted all amounts in this report are unaudited.
TABLE OF CONTENTS
| Page |
| |
CORPORATE INFORMATION | |
| |
Company Profile | 5 |
Investor Information | 6 |
Research Coverage | 7 |
| |
FINANCIAL INFORMATION | |
| |
Key Financial Data | 9 |
Consolidated Balance Sheet | 10 |
Consolidated Statement of Income | 11 |
Notes to Consolidated Statement of Income | 12 |
Consolidated Statement of Cash Flows | 13 |
Calculation of EBITDA | 14 |
Calculation of Funds from Operations (FFO) | 15 |
Segment Information | 16 |
Debt Summary | 17 |
Debt Maturity Schedule | 18 |
Leverage Ratios, Coverage Ratios and Public Debt Covenants | 19 |
FF&E Reserve Escrows | 20 |
2007 Acquisitions and Dispositions Information | 21 |
2007 Financing Activities | 22 |
| |
OPERATING AGREEMENTS AND PORTFOLIO INFORMATION | |
| |
Summary of Operating Agreements | 24 |
Portfolio by Operating Agreement, Manager and Brand | 25 |
Operating Statistics by Hotel Operating Agreement | 26 |
Coverage by Operating Agreement | 27 |
Operating Agreement Expiration Schedule | 28 |
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. 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 BUT ARE NOT LIMITED TO STATEMENTS REGARDING OUR INTENT, BELIEF OR EXPECTATION, OR THE INTENT, BELIEF OR EXPECTATION OF OUR TRUSTEES AND OFFICERS 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 AND
· OUR ABILITY TO APPROPRIATELY BALANCE THE USE OF DEBT AND EQUITY AND TO RAISE CAPITAL.
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 THE RECENT RESTRICTIONS IN THE DEBT CAPITAL MARKETS) ON US AND OUR MANAGERS AND TENANTS,
· COMPLIANCE WITH AND CHANGES TO LAWS AND REGULATIONS AFFECTING THE REAL ESTATE, HOTEL, TRANSPORATION AND TRAVEL CENTER INDUSTRIES,
· CHANGES IN FINANCING TERMS AND
· COMPETITION WITHIN THE REAL ESTATE, HOTEL AND TRAVEL CENTER INDUSTRIES GENERALLY AND BETWEEN REITS SPECIFICALLY.
FOR EXAMPLE:
· IF THE AVAILABILITY OF DEBT CAPITAL MARKET 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.
· HOTEL ROOM DEMAND IS USUALLY A REFLECTION OF GENERAL ECONOMIC ACTIVITY IN THIS COUNTRY; AND IF HOTEL ROOM DEMAND BECOMES DEPRESSED BECAUSE OF A GENERAL SLOWING OF THE ECONOMY, THE OPERATING RESULTS OF OUR HOTELS MAY DECLINE, THE FINANCIAL RESULTS OF OUR MANAGERS AND TENANTS MAY DECLINE AND OUR MANAGERS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS,
· SIMILARLY, A SLOWING OF THE ECONOMY GENERALLY MAY RESULT IN LESS DEMAND FOR TRUCK SERVICES; AND IF TRUCKING ACTIVITY DECLINES, OUR TRAVEL CENTER TENANTS MAY BECOME UNABLE TO PAY OUR RENTS. AND
· WE MAY BE UNABLE TO IDENTIFY PROPERTIES WHICH WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING TERMS, MANAGEMENT AGREEMENTS OR LEASE TERMS FOR NEW PROPERTIES.
THESE RESULTS COULD OCCUR FOR MANY DIFFERENT REASONS, SOME OF WHICH, SUCH AS NATURAL DISASTERS, TERRORIST ATTACKS OR CHANGES IN OUR MANAGERS' OR TENANTS' REVENUE OR COSTS OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE BEYOND OUR CONTROL.
3
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
COMPANY PROFILE
The Company: | | Strategy: |
Hospitality Properties Trust is a real estate investment trust, or REIT. As of December 31, 2007, we owned 292 hotels and 185 travel centers located in 44 states, Puerto Rico, and Canada. At December 31, 2007, our properties were operated by operating companies under twelve long term combination 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: Hospitality Properties Trust is managed by Reit Management & Research LLC, or RMR. RMR was founded in 1986 to | | 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 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.
|
manage public investments in real estate. As of December 31, 2007, RMR managed one of the largest portfolios of publicly owned real estate in the United States, including over 1,300 properties, located in 45 states, Washington, DC, Puerto Rico and Ontario, Canada. RMR has approximately 500 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, or HRP, a publicly traded REIT that primarily owns office buildings and industrial properties, Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns senior living properties, several publicly traded mutual funds, or the RMR Funds, which principally invest in securities of real estate companies (excluding securities of companies managed by RMR and its affiliates) and two real estate based operating companies in the healthcare and travel center industries. The public companies managed by RMR and its affiliates had combined total market capitalization of nearly $14.5 billion as of December 31, 2007. 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. | | Stock Exchange Listing: New York Stock Exchange Trading Symbol: 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 | Corporate Headquarters: 400 Centre Street Newton, MA 02458 (t) (617) 964-8389 (f) (617) 969-5730 |
Portfolio Data by Manager (as of 12/31/07):
| | | | | | Percent of | | | | | | Annualized | | Percent
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% | | $ | 1,769,086 | | 28% | | $ | 151,061 | | 27% | |
Marriott International | | 125 | | 17,926 | | 41% | | 1,524,920 | | 25% | | 155,208 | | 28% | |
Hyatt | | 24 | | 2,895 | | 7% | | 309,850 | | 5% | | 23,050 | | 4% | |
Carlson | | 12 | | 2,262 | | 5% | | 211,309 | | 3% | | 11,890 | | 2% | |
TA(2) | | 185 | | N/A | | N/A | | 2,402,250 | | 39% | | 217,938 | | 39% | |
Total | | 477 | | 43,223 | | 100% | | $ | 6,217,415 | | 100% | | $ | 559,147 | | 100% | |
Operating Statistics by Operating Agreement (Q4 2007):
| | | | | | Annualized | | Percent | | | | | | | | | |
| | | | Number | | Minimum | | of Total | | | | | | RevPAR | |
| | Number of | | of Rooms | | Return / | | Minimum | | Coverage (3) | | Change (4) | |
Operating Agreement | | Properties | | /Suites (1) | | Rent (000s) | | Return / Rent | | Q4 | | LTM | | Q4 | | YTD | |
| | | | | | | | | | | | | | | | | |
InterContinental (no. 1) (5) | | 31 | | 3,844 | | $ | 37,882 | | 7% | | 0.93 | | 1.09x | | 9.3% | | 5.7% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 50,000 | | 9% | | 1.25x | | 1.43x | | 2.1% | | 3.3% | |
InterContinental (no. 3) | | 14 | | 4,139 | | 42,873 | | 8% | | 1.22x | | 1.33x | | 7.4% | | 7.8% | |
InterContinental (no. 4) | | 10 | | 2,937 | | 20,306 | | 4% | | 1.25x | | 1.39x | | -0.1% | | 3.5% | |
Marriott (no. 1) | | 53 | | 7,610 | | 58,379 | | 10% | | 1.55x | | 1.63x | | 6.9% | | 4.9% | |
Marriott (no. 2) | | 18 | | 2,178 | | 19,287 | | 3% | | 1.34x | | 1.33x | | 4.1% | | 1.6% | |
Marriott (no. 3) | | 35 | | 5,382 | | 49,034 | | 9% | | 1.12x | | 1.24x | | 4.1% | | 6.1% | |
Marriott (no. 4) | | 19 | | 2,756 | | 28,508 | | 5% | | 1.21x | | 1.22x | | 4.9% | | 1.2% | |
Hyatt (6) | | 24 | | 2,895 | | 23,050 | | 4% | | 0.56x | | 0.54x | | 33.0% | | 12.0% | |
Carlson | | 12 | | 2,262 | | 11,890 | | 2% | | 1.40x | | 1.63x | | 6.5% | | 13.1% | |
TA (no. 1) (2) | | 145 | | N/A | | 155,713 | | 28% | | 1.53x | | 1.39x | | N/A | | N/A | |
TA (no. 2) | | 40 | | N/A | | 62,225 | | 11% | | 1.19x | | 1.14x | | N/A | | N/A | |
Total / Average | | 477 | | 43,223 | | $ | 559,147 | | 100% | | | | | | 6.2% | | 5.5% | |
(1) 18 of our TA properties include hotels. The rooms associated with these hotels have been excluded from total number of rooms.
(2) The amount of annual minimum rent payable to us under agreement TA (no. 1) is scheduled to increase to $158,962, $162,625, $166,638, $171,613 and $176,620 in 2008, 2009, 2010, 2011 and 2012, respectively. The annual straight line rent for GAAP reporting purposes is $171,389.
(3) 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 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 properties and prior to commencement of our operating agreements. All amounts are for the indicated periods except for the TA amounts which are for the quarter and LTM ended September 30, 2007. We have not independently verified our managers’ and tenants’ operating data.
(4) 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.
(5) The year to date 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.
(6) In connection with the rebranding of our AmeriSuites® hotels to Hyatt PlaceTM hotels starting in the third quarter of 2006, 21 of the hotels in this portfolio have been undergoing renovations which required some hotel rooms to be taken out of service.
5
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
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 | |
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, Manager of Investor Relations, at |
(website) www.hptreit.com | (617) 796-8232 or tbonang@hptreit.com, or Carlynn Finn, |
| Investor Relations Analyst at (617) 796-8232 |
| or cfinn@hptreit.com |
6
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
Equity Research Coverage |
| |
Keefe, Bruyette & Woods | RBC |
Smedes Rose | Mike Salinsky |
(212) 887-3696 | (216) 378-7627 |
| |
Merrill Lynch | Stifel, Nicolaus |
David Bragg | Rod Petrik |
(212) 449-8922 | (410) 454-4131 |
| |
Morgan Keegan | UBS |
Napoleon Overton | William Truelove |
(901) 579-4865 | (212) 713-8825 |
| |
Morgan Stanley | Wachovia Securities |
Celeste Mellet Brown | Jeffrey Donnelly |
(212) 761-3896 | (617) 603-4262 |
| |
Debt Research Coverage |
| |
Credit Suisse | UBS |
Matthew Lynch | Michael Dimler |
(212) 325-6456 | (203) 719-3841 |
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, 2007
KEY FINANCIAL DATA
(amounts in thousands, except per share data)
| | As of and For the Three Months Ended | |
| | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | |
| | | | | | | | | | | |
Shares Outstanding: | | | | | | | | | | | |
Common shares outstanding (at end of period) | | 93,893 | | 93,890 | | 93,869 | | 93,866 | | 86,284 | |
Weighted average common shares outstanding - basic and diluted (1) | | 93,891 | | 93,872 | | 93,868 | | 90,760 | | 75,587 | |
| | | | | | | | | | | |
Common Share Data: | | | | | | | | | | | |
Price at end of period | | $ | 32.22 | | $ | 40.65 | | $ | 41.49 | | $ | 46.80 | | $ | 47.53 | |
High during period | | $ | 43.18 | | $ | 44.30 | | $ | 47.88 | | $ | 49.00 | | $ | 51.46 | |
Low during period | | $ | 32.02 | | $ | 36.00 | | $ | 40.75 | | $ | 37.52 | | $ | 46.65 | |
Annualized dividends paid per share | | $ | 3.08 | | $ | 3.08 | | $ | 3.04 | | $ | 3.04 | | $ | 2.96 | |
Annualized dividend yield (at end of period) | | 9.6% | | 7.6% | | 7.3% | | 6.5% | | 6.2% | |
| | | | | | | | | | | |
Market Capitalization: | | | | | | | | | | | |
Total debt (book value) | | $ | 2,579,391 | | $ | 2,558,154 | | $ | 2,731,994 | | $ | 2,089,831 | | $ | 1,199,830 | |
Plus: market value of preferred shares (at end of period) | | 314,333 | | 362,717 | | 394,674 | | 403,335 | | 88,838 | |
Plus: market value of common shares (at end of period) | | 3,025,232 | | 3,816,629 | | 3,894,625 | | 4,392,929 | | 4,101,079 | |
Total market capitalization | | $ | 5,918,956 | | $ | 6,737,500 | | $ | 7,021,293 | | $ | 6,886,095 | | $ | 5,389,747 | |
Total debt / total market capitalization | | 43.6% | | 38.0% | | 38.9% | | 30.3% | | 22.3% | |
| | | | | | | | | | | |
Book Capitalization: | | | | | | | | | | | |
Total debt | | $ | 2,579,391 | | $ | 2,558,154 | | $ | 2,731,994 | | $ | 2,089,831 | | $ | 1,199,830 | |
Plus: total shareholders’ equity | | 2,786,434 | | 2,782,728 | | 2,711,505 | | 2,736,066 | | 2,447,540 | |
Total book capitalization | | $ | 5,365,825 | | $ | 5,340,882 | | $ | 5,443,499 | | $ | 4,825,897 | | $ | 3,647,370 | |
Total debt / total book capitalization | | 48.1% | | 47.9% | | 50.2% | | 43.3% | | 32.9% | |
| | | | | | | | | | | |
Selected Balance Sheet Data: | | | | | | | | | | | |
Total assets | | 5,679,307 | | 5,647,155 | | $ | 5,790,013 | | $ | 5,145,180 | | $ | 3,957,463 | |
Total liabilities | | 2,892,873 | | 2,864,427 | | $ | 3,078,508 | | $ | 2,409,114 | | $ | 1,509,923 | |
Real estate, at cost | | 6,196,231 | | 6,154,580 | | $ | 6,259,353 | | $ | 5,590,197 | | $ | 4,024,106 | |
Total debt / real estate, at cost | | 41.6% | | 41.6% | | 43.6% | | 37.4% | | 29.8% | |
| | | | | | | | | | | |
Selected Income Statement Data: | | | | | | | | | | | |
Total revenues | | $ | 326,760 | | $ | 334,310 | | $ | 333,741 | | $ | 290,668 | | $ | 253,887 | |
EBITDA (2) | | $ | 154,317 | | $ | 159,080 | | $ | 152,314 | | $ | 130,267 | | $ | 97,610 | |
Net income available for common shareholders (3) | | $ | 75,984 | | $ | 142,390 | | $ | 46,812 | | $ | 39,013 | | $ | 59,952 | |
Funds from operations (FFO) available for common shareholders (4) | | $ | 108,270 | | $ | 113,572 | | $ | 111,541 | | $ | 98,462 | | $ | 75,623 | |
Common distributions declared | | $ | 72,298 | | $ | 72,295 | | $ | 71,340 | | $ | 72,708 | | $ | 63,850 | |
| | | | | | | | | | | |
Per Share Data: | | | | | | | | | | | |
Income from continuing operations available for common shareholders | | $ | 0.81 | | $ | 0.48 | | $ | 0.47 | | $ | 0.40 | | $ | 0.75 | |
Income from discontinued operations available for common shareholders (3) | | $ | — | | $ | 1.03 | | $ | 0.03 | | $ | 0.03 | | $ | 0.05 | |
Net income available for common shareholders (3) | | $ | 0.81 | | $ | 1.52 | | $ | 0.50 | | $ | 0.43 | | $ | 0.79 | |
FFO available for common shareholders (4) | | $ | 1.15 | | $ | 1.21 | | $ | 1.19 | | $ | 1.08 | | $ | 1.00 | |
Common distributions declared | | $ | 0.77 | | $ | 0.77 | | $ | 0.76 | | $ | 0.76 | | $ | 0.74 | |
FFO payout ratio | | 67.0% | | 63.6% | | 63.9% | | 70.4% | | 74.0% | |
| | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
EBITDA (2) / interest expense | | 4.1x | | 4.2x | | 4.5x | | 4.2x | | 4.8x | |
EBITDA (2) / interest expense and preferred distributions | | 3.4x | | 3.5x | | 3.7x | | 4.0x | | 4.4x | |
(1) | HPT had no outstanding dilutive common share equivalents during the periods presented. |
(2) | See page 13 for calculation of EBITDA. |
(3) | Includes for the quarter ended September 30, 2007, a $95,711, or a $1.02 per share, gain from the sale of real estate. |
(4) | See page 14 for calculation of FFO. |
9
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
CONSOLIDATED BALANCE SHEET
(dollars in thousands, except share data)
| | As of
December 31,
2007 | | As of
December 31,
2006 | |
| | | | (Audited) | |
ASSETS | | | | | |
| | | | | |
Real estate properties, at cost: | | | | | |
Land | | $ | 1,377,520 | | $ | 582,562 | |
Buildings, improvements and equipment | | 4,818,711 | | 3,436,219 | |
| | 6,196,231 | | 4,018,781 | |
Accumulated depreciation | | (849,470 | ) | (702,513 | ) |
| | 5,346,761 | | 3,316,268 | |
Cash and cash equivalents | | 23,401 | | 553,256 | |
Restricted cash (FF&E reserve escrow) | | 28,134 | | 27,363 | |
Other assets, net | | 281,011 | | 60,576 | |
| | $ | 5,679,307 | | $ | 3,957,463 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Revolving credit facility | | $ | 158,000 | | $ | — | |
Senior notes, net of discounts | | 1,842,756 | | 1,196,130 | |
Convertible senior notes | | 575,000 | | — | |
Mortgage payable | | 3,635 | | 3,700 | |
Security deposits | | 169,406 | | 185,366 | |
Accounts payable and other liabilities | | 134,705 | | 119,536 | |
Due to affiliates | | 4,617 | | 3,277 | |
Dividends payable | | 4,754 | | 1,914 | |
Total liabilities | | 2,892,873 | | 1,509,923 | |
| | | | | |
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 and none issued and outstanding, respectively, aggregate liquidation preference $317,500 | | 306,833 | | — | |
Common shares of beneficial interest; $0.01 par value; 150,000,000 shares authorized; 93,892,719 and 86,284,251shares issued and outstanding, respectively | | 939 | | 863 | |
Additional paid-in capital | | 3,048,881 | | 2,703,687 | |
Cumulative net income | | 1,711,079 | | 1,380,111 | |
Cumulative preferred distributions | | (93,761 | ) | (66,992 | ) |
Cumulative common distributions | | (2,270,843 | ) | (1,653,435 | ) |
Total shareholders’ equity | | 2,786,434 | | 2,447,540 | |
| | $ | 5,679,307 | | $ | 3,957,463 | |
10
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
| | For the Three Months Ended | | For the Twelve Months Ended | |
| | 12/31/2007 | | 12/31/2006 | | 12/31/2007 | | 12/31/2006 | |
| | | | | | | | | |
Revenues: | | | | | | | | | |
Hotel operating revenues (1) | | $ | 227,031 | | $ | 213,457 | | $ | 941,455 | | $ | 879,324 | |
Minimum rent (1) | | 87,945 | | 29,161 | | 310,764 | | 115,461 | |
Percentage rent (2) | | 6,055 | | 5,188 | | 6,055 | | 5,188 | |
FF&E reserve income (3) | | 5,293 | | 4,794 | | 22,286 | | 20,299 | |
Interest income | | 436 | | 1,287 | | 4,919 | | 2,674 | |
Total revenues | | 326,760 | | 253,887 | | 1,285,479 | | 1,022,946 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Hotel operating expenses | | 137,758 | | 132,614 | | 657,000 | | 618,334 | |
Interest (including amortization of deferred financing costs of $1,051, $664, $3,659 and $2,584, respectively) | | 38,029 | | 20,500 | | 140,517 | | 81,451 | |
Depreciation and amortization | | 56,218 | | 36,416 | | 216,688 | | 141,198 | |
General and administrative | | 9,421 | | 5,868 | | 37,223 | | 25,090 | |
TA spin off costs (4) | | — | | — | | 2,711 | | — | |
Loss on asset impairment (5) | | 1,332 | | — | | 1,332 | | — | |
Total expenses | | 242,758 | | 195,398 | | 1,055,471 | | 866,073 | |
Income before income taxes | | 84,002 | | 58,489 | | 230,008 | | 156,873 | |
Income tax expense | | (548 | ) | (186 | ) | (2,191 | ) | (372 | ) |
Income from continuing operations | | 83,454 | | 58,303 | | 227,817 | | 156,501 | |
Discontinued operations (6): | | | | | | | | | |
Income from discontinued operations | | — | | 3,563 | | 7,440 | | 12,538 | |
Gain on sale of real estate used by discontinued operations | | — | | — | | 95,711 | | — | |
| | — | | 3,563 | | 103,151 | | 12,538 | |
| | | | | | | | | |
Net income | | 83,454 | | 61,866 | | 330,968 | | 169,039 | |
| | | | | | | | | |
Preferred distributions | | (7,470 | ) | (1,914 | ) | (26,769 | ) | (7,656 | ) |
Net income available for common shareholders | | $ | 75,984 | | $ | 59,952 | | $ | 304,199 | | $ | 161,383 | |
| | | | | | | | | |
Weighted average common shares outstanding | | 93,891 | | 75,587 | | 93,109 | | 73,279 | |
| | | | | | | | | |
Basic and diluted net income per common share: | | | | | | | | | |
Income from continuing operations available for common shareholders | | $ | 0.81 | | $ | 0.75 | | $ | 2.16 | | $ | 2.03 | |
Income from discontinued operations available for common shareholders | | $ | — | | $ | 0.04 | | $ | 1.11 | | $ | 0.17 | |
Net income available for common shareholders | | $ | 0.81 | | $ | 0.79 | | $ | 3.27 | | $ | 2.20 | |
See notes to consolidated statement of income on page 12.
11
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
NOTES TO CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
(1) At December 31, 2007, each of our 292 hotels are included in one of ten combinations of hotels of which 201 are leased to our taxable REIT subsidiaries and managed by independent hotel operating companies and 91 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) 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.
(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. At December 31, 2007, we own the FF&E Reserve escrows for all our hotels. Through July 26, 2007, we had a security and remainder interest in the FF&E Reserve escrows for our former Homestead Studio Suites hotels (see Note 6). 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 had a security and remainder interest in the FF&E Reserve escrows of our Homestead Studio Suites hotels, deposits were not included in revenue. 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.
(4) During the first quarter of 2007, we expensed $2,711 of costs in connection with the spin off of our former subsidiary, TravelCenters of America LLC, or TA, to our shareholders on January 31, 2007.
(5) In December 2007, we authorized Global Hyatt Corporation to pursue the sale of our AmeriSuites hotel in Atlantic Beach, NC. In connection with this decision we recorded a $1,332, or $.01 loss per share on asset impairment.
(6) On July 26, 2007, we sold 18 Homestead Studio Suites hotels for $205,350 and recognized a gain on sale of $95,711. We have reclassified our consolidated statement of income for all periods presented to show the results of operations of the hotels which have been sold as discontinued. Following is a summary of the operating results of these discontinued operations:
| | Quarter Ended December 31, | | Twelve Months Ended December 31, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
Minimum rent | | $ | — | | $ | 3,990 | | $ | 9,218 | | $ | 15,960 | |
Percentage rent (2) | | — | | 510 | | 267 | | 509 | |
Total revenue | | — | | 4,500 | | 9,485 | | 16,469 | |
Depreciation and amortization | | — | | (754 | ) | (1,636 | ) | (3,206 | ) |
General and administrative | | — | | (183 | ) | (409 | ) | (725 | ) |
| | — | | | | | | | |
Income from discontinued operations | | $ | — | | $ | 3,563 | | $ | 7,440 | | $ | 12,538 | |
12
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
| | For the Twelve Months Ended | |
| | 12/31/2007 | | 12/31/2006 | |
| | | | | |
Cash flows from operating activities: | | | | | |
Net income | | $ | 330,968 | | $ | 169,039 | |
Adjustments to reconcile net income to cash provided by operating activities: | | | | | |
Depreciation and amortization | | 218,319 | | 144,404 | |
Amortization of deferred financing costs as interest | | 3,659 | | 2,584 | |
Straight line rent adjustments | | (15,851 | ) | (113 | ) |
Other non-cash (income) expense, net | | (4,363 | ) | (2,969 | ) |
FF&E reserve income and deposits | | (57,912 | ) | (46,095 | ) |
Loss on asset impairment | | 1,332 | | — | |
Gain on sale of real estate used by discontinued operations | | (95,711 | ) | — | |
Change in assets and liabilities: | | | | | |
Increase in other assets | | (14,089 | ) | (2,488 | ) |
Increase in accounts payable and other | | 19,147 | | 5,462 | |
Increase in due to affiliate | | 2,730 | | 1,729 | |
Cash provided by operating activities | | 388,229 | | 271,553 | |
| | | | | |
Cash flows from investing activities: | | | | | |
Real estate acquisitions | | (2,629,215 | ) | (320,776 | ) |
FF&E reserve fundings | | (64,241 | ) | (72,556 | ) |
Sale of real estate used by discontinued operations | | 205,350 | | — | |
Refund of security deposit | | (15,960 | ) | — | |
Increase in security deposits | | — | | 2 | |
Cash used in investing activities | | (2,504,066 | ) | (393,330 | ) |
| | | | | |
Cash flows from financing activities: | | | | | |
Issuance of common shares, net | | 343,451 | | 641,652 | |
Issuance of preferred shares, net | | 306,833 | | — | |
Issuance of senior notes, net of discount | | 645,843 | | 273,974 | |
Issuance of convertible senior notes | | 575,000 | | — | |
Draws on revolving credit facility | | 1,022,000 | | 511,000 | |
Repayments of revolving credit facility | | (864,000 | ) | (546,000 | ) |
Draws on interim credit facility | | 1,400,000 | | — | |
Repayments of interim credit facility | | (1,400,000 | ) | — | |
Deferred financing costs incurred | | (17,892 | ) | (3,259 | ) |
Distributions to preferred shareholders | | (23,929 | ) | (7,656 | ) |
Distributions to common shareholders | | (280,158 | ) | (213,246 | ) |
Distribution of TA to common shareholders | | (121,166 | ) | — | |
Cash provided by financing activities | | 1,585,982 | | 656,465 | |
| | | | | |
Increase (decrease) in cash and cash equivalents | | (529,855 | ) | 534,688 | |
Cash and cash equivalents at beginning of period | | 553,256 | | 18,568 | |
Cash and cash equivalents at end of period | | $ | 23,401 | | $ | 553,256 | |
| | | | | |
Supplemental cash flow information: | | | | | |
Cash paid for interest | | $ | 119,200 | | $ | 78,157 | |
| | | | | |
Non cash investing activities: | | | | | |
Property managers’ deposits in FF&E reserve | | $ | 58,668 | | $ | 44,946 | |
Property managers’ purchases with FF&E reserve | | (122,138 | ) | (116,129 | ) |
| | | | | |
Non cash financing activities: | | | | | |
Issuance of common shares | | $ | 1,819 | | $ | 2,296 | |
Distribution of TA to common shareholders | | (216,084 | ) | — | |
13
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
CALCULATION OF EBITDA
(in thousands)
| | | For the Three Months Ended | | For the Twelve Months Ended | |
| | | 12/31/2007 | | 12/31/2006 | | 12/31/2007 | | 12/31/2006 | |
| | | | | | | | | | |
Net income | | $ | 83,454 | | $ | 61,866 | | $ | 330,968 | | $ | 169,039 | |
Plus: | Interest expense | | 38,029 | | 20,500 | | 140,517 | | 81,451 | |
| Depreciation and amortization (continuing operations) | | 56,218 | | 36,416 | | 216,688 | | 141,198 | |
| Depreciation and amortization (discontinued operations) (1) | | — | | 753 | | 1,636 | | 3,206 | |
| Income taxes | | 548 | | 186 | | 2,191 | | 372 | |
| Loss on asset impairment (2) | | 1,332 | | — | | 1,332 | | — | |
Less: | Deferred percentage rent previously recognized in EBITDA (continuing operations) (3) | | (4,748 | ) | (4,179 | ) | — | | — | |
| Deferred percentage rent previously recognized in EBITDA (discontinued operations) (1) (3) | | — | | (428 | ) | — | | — | |
| Deferred additional returns previously recognized in EBITDA (continuing operations) (4) | | (20,516 | ) | (17,318 | ) | — | | — | |
| Gain on sale of real estate used by discontinued operations | | — | | — | | (95,711 | ) | — | |
EBITDA | | $ | 154,317 | | $ | 97,796 | | $ | 597,621 | | $ | 395,266 | |
| | | | | | | | | | | | | | | |
(1) | On July 26, 2007, we sold 18 Homestead Studio Suites® hotels for $205,350 and recognized a gain on sale of $95,711. We reclassified our consolidated statement of income for all periods presented to show the results of operations of the hotels which have been sold as discontinued (see page 11 for a summary of these discontinued operations). |
(2) | In December 2007, we authorized Global Hyatt Corporation to pursue the sale of our AmeriSuites hotel in Atlantic Beach, NC. In connection with this decision we recorded a $1,332 loss on asset impairment. |
(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 EBITDA for each quarter of the year. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters. In connection with the termination of the lease for our former Homestead Studio Suites® hotels (see Note 1), all previously deferred percentage rental income was recognized in calculating net income in the 2007 third quarter. Percentage rent income included in EBITDA was $1,307 and $1,009 in the fourth quarter of 2007 and 2006, respectively, net of amounts included in our EBITDA calculations for the respective prior 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 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 FFO were $3,655 and $2,711 in the fourth quarter of 2007 and 2006, respectively, net of amounts included in our EBITDA calculations for the respective prior three quarters. |
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, depreciation and amortization expense, income tax expense, loss on impairment, deferred percentage rent and deferred additional returns less gain on sale of real estate. 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 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.
14
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(in thousands, except per share data)
| | | For the Three Months Ended | | For the Twelve Months Ended | |
| | | 12/31/2007 | | 12/31/2006 | | 12/31/2007 | | 12/31/2006 | |
| | | | | | | | | | |
Net income available for common shareholders | | $ | 75,984 | | $ | 59,952 | | $ | 304,199 | | $ | 161,383 | |
Plus: | FF&E deposits not in net income (1) | | — | | 427 | | 990 | | 1,942 | |
| Depreciation and amortization (continuing operations) | | 56,218 | | 36,416 | | 216,688 | | 141,198 | |
| Depreciation and amortization (discontinued operations) (2) | | — | | 753 | | 1,636 | | 3,206 | |
| Loss on asset impairment (3) | | 1,332 | | — | | 1,332 | | — | |
| TA spin off costs (4) | | — | | — | | 2,711 | | — | |
Less: | Deferred percentage rent previously recognized in FFO (continuing operations) (5) | | (4,748 | ) | (4,179 | ) | — | | — | |
| Deferred percentage rent previously recognized in FFO(discontinued operations) (2) (5) | | — | | (428 | ) | — | | — | |
| Deferred additional returns previously recognized in FFO (continuing operations) (6) | | (20,516 | ) | (17,318 | ) | — | | — | |
| Gain on sale of real estate used by discontinued operations | | — | | — | | (95,711 | ) | — | |
FFO available for common shareholders | | $ | 108,270 | | $ | 75,623 | | $ | 431,845 | | $ | 307,729 | |
| | | | | | | | | | |
Weighted average shares outstanding | | 93,891 | | 75,587 | | 93,109 | | 73,279 | |
| | | | | | | | | | |
Net income available for common shareholders per share | | $ | 0.81 | | $ | 0.79 | | $ | 3.27 | | $ | 2.20 | |
FFO available for common shareholders per share | | $ | 1.15 | | $ | 1.00 | | $ | 4.64 | | $ | 4.20 | |
| | | | | | | | | | | | | | | | | | |
(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. At December 31, 2007, we own the FF&E Reserve escrows for all our hotels. Through July 26, 2007, we had a security and remainder interest in the FF&E Reserve escrows for our former Homestead Studio Suites® hotels (see Note 2). 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 had a security and remainder interest in the FF&E Reserve escrows of our Homestead Studio Suites® hotels, deposits were not included in revenue but were 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) | On July 26, 2007, we sold 18 Homestead Studio Suites® hotels for $205,350 and recognized a gain on sale of $95,711. We reclassified our consolidated statement of income for all periods presented to show the results of operations of the hotels which have been sold as discontinued (see page 11 for a summary of these discontinued operations). |
(3) | In December 2007, we authorized Global Hyatt Corporation to pursue the sale of our AmeriSuites hotel in Atlantic Beach, NC. In connection with this decision we recorded a $1,332 loss on asset impairment. |
(4) | We expensed $2,711 of costs in connection with the spin off of our former subsidiary, TravelCenters of America, LLC, or TA, to our shareholders on January 31, 2007. |
(5) | 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 estimated 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. In connection with the termination of the lease for our former Homestead Studio Suites® hotels (see Note 2), all previously deferred percentage rental income was recognized in calculating net income in the 2007 third quarter. Percentage rental income included in FFO was $1,307 and $1,009 in the fourth quarter of 2007 and 2006, respectively, net of amounts included in our FFO calculations for the respective prior three quarters. |
(6) | 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 the estimated 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 were $3,665 and $2,711 in the fourth quarter of 2007 and 2006, respectively, net of amounts included in our FFO calculations for the respective prior three quarters. |
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), deferred percentage rent (see Note 5), deferred additional returns (see Note 6) and exclude loss on asset impairment (see note 3)and TA spin off costs (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, 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 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.
15
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
SEGMENT INFORMATION
(in thousands)
We have two reportable business segments: hotels and travel centers. Prior to our acquisition of TravelCenters in January 2007, our only reportable segment was hotels.
| | For the Three Months Ended December 31, 2007 | |
| | Hotels | | Travel Centers | | Corporate | | Consolidated | |
| | | | | | | | | |
Hotel operating revenues | | $ | 227,031 | | $ | — | | $ | — | | $ | 227,031 | |
Minimum rent | | 29,301 | | 58,644 | | — | | 87,945 | |
Percentage rent | | 6,055 | | — | | — | | 6,055 | |
FF&E reserve income | | 5,293 | | — | | — | | 5,293 | |
Interest income | | — | | — | | 436 | | 436 | |
Total revenues | | 267,680 | | 58,644 | | 436 | | 326,760 | |
Hotel operating expenses | | 137,758 | | — | | — | | 137,758 | |
Operating income | | 129,922 | | 58,644 | | 436 | | 189,002 | |
| | | | | | | | | |
Interest expense | | — | | — | | 38,029 | | 38,029 | |
Depreciation and amortization expense | | 37,888 | | 18,330 | | — | | 56,218 | |
General and administrative expense | | — | | — | | 9,421 | | 9,421 | |
TA spin off costs | | — | | — | | — | | — | |
Loss on asset impairment | | 1,332 | | — | | — | | 1,332 | |
Total expenses | | 39,220 | | 18,330 | | 47,450 | | 105,000 | |
| | | | | | | | | |
Income (loss) before income taxes | | 90,702 | | 40,314 | | (47,014 | ) | 84,002 | |
Income tax expense | | — | | — | | (548 | ) | (548 | ) |
| | | | | | | | | |
Income (loss) from continuing operations | | $ | 90,702 | | $ | 40,314 | | $ | (47,562 | ) | $ | 83,454 | |
| | For the Twelve Months Ended December 31, 2007 | |
| | Hotels | | Travel Centers | | Corporate | | Consolidated | |
| | | | | | | | | |
Hotel operating revenues | | $ | 941,455 | | $ | — | | $ | — | | $ | 941,455 | |
Minimum rent | | 117,193 | | 193,571 | | — | | 310,764 | |
Percentage rent | | 6,055 | | — | | — | | 6,055 | |
FF&E reserve income | | 22,286 | | — | | — | | 22,286 | |
Interest income | | — | | — | | 4,919 | | 4,919 | |
Total revenues | | 1,086,989 | | 193,571 | | 4,919 | | 1,285,479 | |
Hotel operating expenses | | 657,000 | | — | | — | | 657,000 | |
Operating income | | 429,989 | | 193,571 | | 4,919 | | 628,479 | |
| | | | | | | | | |
Interest expense | | — | | — | | 140,517 | | 140,517 | |
Depreciation and amortization expense | | 147,401 | | 69,287 | | — | | 216,688 | |
General and administrative expense | | — | | — | | 37,223 | | 37,223 | |
TA spin off costs | | — | | — | | 2,711 | | 2,711 | |
Loss on asset impairment | | 1,332 | | — | | — | | 1,332 | |
Total expenses | | 148,733 | | 69,287 | | 180,451 | | 398,471 | |
| | | | | | | | | |
Income (loss) before income taxes | | 281,256 | | 124,284 | | (175,532 | ) | 230,008 | |
Income tax expense | | — | | — | | (2,191 | ) | (2,191 | ) |
| | | | | | | | | |
Income (loss) from continuing operations | | $ | 281,256 | | $ | 124,284 | | $ | (177,723 | ) | $ | 227,817 | |
| | | | | | | | | |
Total assets | | $ | 3,247,762 | | $ | 2,378,659 | | $ | 52,886 | | $ | 5,679,307 | |
16
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
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% | | $ | 3,635 | | 07/01/11 | | 3.5 | |
| | | | | | | | | |
Unsecured Debt: | | | | | | | | | |
| | | | | | | | | |
Unsecured Floating Rate Debt: | | | | | | | | | |
Revolving credit facility (LIBOR + 55 bps) | | 5.406%(1) | | $ | 158,000 | | 10/24/10 | | 2.8 | |
| | | | | | | | | |
Unsecured Fixed Rate Debt: | | | | | | | | | |
Senior notes due 2008 | | 7.000% | | $ | 150,000 | | 03/01/08 | | 0.2 | |
Senior notes due 2010 | | 9.125% | | 50,000 | | 07/15/10 | | 2.5 | |
Senior notes due 2012 | | 6.850% | | 125,000 | | 07/15/12 | | 4.5 | |
Senior notes due 2013 | | 6.750% | | 300,000 | | 02/15/13 | | 5.1 | |
Senior notes due 2015 | | 5.125% | | 300,000 | | 02/15/15 | | 7.1 | |
Senior notes due 2016 | | 6.300% | | 275,000 | | 06/15/16 | | 8.5 | |
Senior notes due 2017 | | 5.625% | | 300,000 | | 03/15/17 | | 9.2 | |
Senior notes due 2018 | | 6.700% | | 350,000 | | 01/15/18 | | 10.0 | |
Convertible senior notes due 2027 | | 3.800% | | 575,000 | | 03/15/27 | (2) | 19.2 | |
Total / weighted average unsecured fixed rate debt | | 5.722% | | $ | 2,425,000 | | | | 9.9 | |
| | | | | | | | | |
Weighted average secured fixed rate debt / total | | 8.300% | | $ | 3,635 | | | | 3.5 | |
Weighted average unsecured floating rate debt / total | | 5.406% | | 158,000 | | | | 2.8 | |
Weighted average unsecured fixed rate debt / total | | 5.722% | | 2,425,000 | | | | 9.9 | |
Weighted average debt / total | | 5.706% | | $ | 2,586,635 | | | | 9.5 | |
(1) Interest rate at December 31, 2007.
(2) 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.
17
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
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 | |
2008 | | $ | 77 | | $ | — | | $ | 150,000 | (1) | $ | 150,077 | |
2009 | | 84 | | — | | — | | 84 | |
2010 | | 91 | | 158,000 | | 50,000 | | 208,091 | |
2011 | | 3,383 | | — | | — | | 3,383 | |
2012 | | — | | — | | 125,000 | | 125,000 | |
2013 | | — | | — | | 300,000 | | 300,000 | |
2014 | | — | | — | | — | | — | |
2015 | | — | | — | | 300,000 | | 300,000 | |
2016 | | — | | — | | 275,000 | | 275,000 | |
2017 | | — | | — | | 300,000 | | 300,000 | |
2018 | | — | | — | | 350,000 | | 350,000 | |
2027 | | — | | — | | 575,000 | (2) | 575,000 | |
| | $ | 3,635 | | $ | 158,000 | | $ | 2,425,000 | | $ | 2,586,635 | |
(1) The senior notes mature on March 1, 2008.
(2) 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.
18
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
| | As of and For the Three Months Ended | |
| | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | |
Leverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | |
Total debt / total assets | | 45.4% | | 45.3% | | 47.2% | | 40.6% | | 30.3% | |
Total debt / real estate assets, at cost | | 41.6% | | 41.6% | | 43.6% | | 37.4% | | 29.8% | |
Total debt / total market capitalization | | 43.6% | | 38.0% | | 38.9% | | 30.3% | | 22.3% | |
Total debt / total book capitalization | | 48.1 | | 47.9% | | 50.2% | | 43.3% | | 32.9% | |
Secured debt / total assets | | 0.1% | | 0.1% | | 0.1% | | 0.1% | | 0.1% | |
Variable rate debt / total debt | | 6.1% | | 5.4% | | 24.1% | | 0.8% | | 1.1% | |
| | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | |
| | | | | | | | | | | |
EBITDA (1) / interest expense | | 4.1x | | 4.2x | | 4.5x | | 4.2x | | 4.8x | |
EBITDA (1) / interest expense and preferred distributions | | 3.4x | | 3.5x | | 3.7x | | 4.0x | | 4.4x | |
| | | | | | | | | | | |
Public Debt Covenants: (2) | | | | | | | | | | | |
| | | | | | | | | | | |
Total debt / adjusted total assets - allowable maximum 60.0% | | 41.2% | | 41.2% | | 43.2% | | 36.8% | | 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 | | 4.47x | | 3.63 | | 3.90x | | 3.65x | | 5.47x | |
Total unencumbered assets to unsecured debt - required minimum 150% / 200% | | 220.1% | | 218.6% | | 209.2% | | 271.9% | | 387.8% | |
(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.
19
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
FF&E RESERVE ESCROWS(1)
(dollars in thousands)
| | As of and For the Three Months Ended | |
HPT Owned: | | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | 25,698 | | $ | 30,684 | | $ | 32,444 | | $ | 27,363 | | $ | 29,797 | |
Manager deposits | | 14,642 | | 17,287 | | 15,180 | | 11,559 | | 11,750 | |
HPT fundings: | | | | | | | | | | | |
Carlson(2) | | 197 | | 136 | | — | | 219 | | 404 | |
Marriott(3) | | 3,016 | | 1,532 | | 3,291 | | 1,392 | | 6,795 | |
Hyatt(4) | | 7,500 | | 7,500 | | 11,000 | | 16,000 | | 9,500 | |
InterContinental(5) | | 1,300 | | — | | 1,467 | | 9,691 | | 1,000 | |
Hotel improvements | | (24,219 | ) | (31,441 | ) | (32,698 | ) | (33,780 | ) | (31,883 | ) |
FF&E reserves (end of period) | | $ | 28,134 | | $ | 25,698 | | $ | 30,684 | | $ | 32,444 | | $ | 27,363 | |
| | | | | | | | | | | |
Tenant Owned: | | | | | | | | | | | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | — | | $ | 1 | | $ | 152 | | $ | 2 | | $ | 2 | |
Manager deposits | | — | | — | | 512 | | 419 | | 463 | |
Hotel improvements | | — | | (1 | ) | (663 | ) | (269 | ) | (463 | ) |
FF&E reserves (end of period) | | $ | — | | $ | — | | $ | 1 | | $ | 152 | | $ | 2 | |
| | | | | | | | | | | |
Total: | | | | | | | | | | | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ | 25,698 | | $ | 30,685 | | $ | 32,596 | | $ | 27,365 | | $ | 29,799 | |
Manager deposits | | 14,642 | | 17,287 | | 15,692 | | 11,978 | | 12,213 | |
HPT fundings: | | | | | | | | | | | |
Carlson(2) | | 197 | | 136 | | — | | 219 | | 404 | |
Marriott(3) | | 3,016 | | 1,532 | | 3,291 | | 1,392 | | 6,795 | |
Hyatt(4) | | 7,500 | | 7,500 | | 11,000 | | 16,000 | | 9,500 | |
InterContinental(5) | | 1,300 | | — | | 1,467 | | 9,691 | | 1,000 | |
Hotel improvements | | (24,219 | ) | (31,442 | ) | (33,361 | ) | (34,049 | ) | (32,346 | ) |
FF&E reserves (end of period) | | $ | 28,134 | | $ | 25,698 | | $ | 30,685 | | $ | 32,596 | | $ | 27,365 | |
(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. At December 31, 2007, we own all the FF&E reserve escrows for all our hotels. Through July 26, 2007, we had a security and remainder interest in the escrow account of our former Homestead Studio Suites® hotels.
(2) Pursuant to our agreement with Carlson for the management of 12 hotels, we agreed to fund certain 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. At December 31, 2007, we have funded $38,408 under this agreement.
(3) Represents FF&E reserve deposits for our Marriott branded hotel combinations not funded by hotel operations but separately funded by us. The 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.
(4) Pursuant to our agreement with Hyatt for the management of 24 hotels, we agreed to fund certain 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. At December 31, 2007, we have funded $71,500 under this agreement.
(5) Pursuant to our management agreements with InterContinental, we agreed to fund certain rebranding costs and capital improvements. Generally, our annual minimum returns increase by a percentage of the amounts we fund.
20
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
2007 ACQUISITIONS AND DISPOSITIONS INFORMATION
(dollars in thousands)
2007 ACQUISITIONS (through 12/31/2007):
Date
Acquired | | Properties | | Brand | | Location | | Number
of Rooms
/ Suites | | Operating
Agreement | | Purchase
Price | | Purchase
Price per
Room / Suite | |
| | | | | | | | | | | | | | | |
1/31/2007(1) | | 146 | | TravelCenters of America® | | 39 states | | N/A | | TA No. 1 | | $ | 1,697,221 | | N/A | |
| | | | | | | | | | | | | | | |
5/30/07 | | 40 | | Petro Stopping Centers® | | 25 states | | N/A | | TA No. 2 | | $ | 655,000 | | N/A | |
| | | | | | | | | | | | | | | |
Total /Average 2007 | | 186 | | | | | | N/A | | | | $ | 2,352,221 | | N/A | |
(1) On January 31, 2007, we completed our previously announced acquisition of TravelCenters of America, Inc. or TravelCenters, for approximately $1,900,000. Simultaneously with this acquisition, we retained substantially all of the TravelCenters real estate and capitalized and spun out to our shareholders a subsidiary, TravelCenters of America LLC (AMEX: TA), or TA, which leases this real estate and has continued the fuel service and hospitality business of TravelCenters. The purchase price amount represents the value of the TravelCenters assets we retained. In addition to this purchase price, we have committed to invest $125,000 (up to $25,000 per year) to fund improvements to the leased TA locations, of which $25,000 was funded in 2007.
2007 DISPOSITIONS (through 12/31/07):(1)
Date
Disposed | | Properties | | Brand | | Location | | Number
of Rooms
/ Suites | | Operating
Agreement | | Sales
Price | | Sales
Price per
Room / Suite | |
| | | | | | | | | | | | | | | |
7/26/07(1) | | 18 | | Homestead Studio Suites® | | 5 states | | 2,399 | | Homestead | | $ | 205,350 | | $ | 86 | |
| | | | | | | | | | | | | | | |
9/9/07 | | 1 | | TravelCenters of America® | | Conley, GA | | N/A | | TA No. 1(2) | | $ | — | | N/A | |
| | | | | | | | | | | | | | | |
Total 2007 | | 19 | | | | | | 2,399 | | | | $ | 205,350 | | $ | 86 | |
(1) Excludes January 31, 2007, spin off of TA to our common shareholders.
(2) On September 9, 2007, the ground lease rights for this site reached the end of their term and were not renewed.
21
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
2007 FINANCING ACTIVITIES
(share amounts and dollars in thousands)
| | For the Three Months Ended | |
| | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | |
| | | | | | | | | |
Debt Transactions:(1) | | | | | | | | | |
New debt raised | | $ | — | | $ | 350,000 | | $ | — | | $ | 875,000 | |
Total new debt | | — | | 350,000 | | — | | 875,000 | |
| | | | | | | | | |
Debt retired | | — | | — | | — | | — | |
Net debt | | $ | — | | $ | 350,000 | | $ | — | | $ | 875,000 | |
| | | | | | | | | |
Equity Transactions: | | | | | | | | | |
New common shares issued | | — | | — | | — | | 7,550 | |
New common equity raised, net | | $ | — | | $ | — | | $ | — | | $ | 343,452 | |
| | | | | | | | | |
New preferred shares issued | | — | | — | | — | | 12,700 | |
New preferred equity raised, net | | $ | — | | $ | — | | $ | — | | $ | 306,833 | |
Total new equity | | $ | — | | $ | — | | $ | — | | $ | 650,285 | |
(1) Excludes drawings and repayments under our revolving credit facility and bridge loan facility.
22
OPERATING AGREEMENTS
AND PORTFOLIO INFORMATION
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
SUMMARY OF OPERATING AGREEMENTS
(dollars in thousands)
Operating Agreement | | Marriott (no. 1) | | Marriott (no. 2) | | Marriott (no. 3) | | Marriott (no. 4) | | InterContinental (no. 1) | | InterContinental (no. 2) | | InterContinental (no. 3) | | InterContinental (no. 4) | | Hyatt | | Carlson | | TA (no. 1) | | TA (no. 2) | | Total / Range /
Average (all
investments) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Properties | | 53 | | 18 | | 35 | | 19 | | 31 | | 76 | | 14 | | 10 | | 24 | | 12 | | 145 | | 40 | | 477 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Rooms / Suites | | 7,610 | | 2,178 | | 5,382 | | 2,756 | | 3,844 | | 9,220 | | 4,139 | | 2,937 | | 2,895 | | 2,262 | | (1) | | — | | 43,223 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
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® | | Staybridge Suites® | | Candlewood Suites® | | 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 | | 24 | | 14 | | 15 | | 14 | | 16 | | 29 | | 7 plus Ontario and Puerto Rico | | 5 | | 14 | | 7 | | 39 | | 25 | | 44 plus Ontario and Puerto Rico | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Manager | | Subsidiary of Marriott International | | Subsidiary of Marriott International | | Subsidiaries of Marriott International | | Subsidiaries of Marriott International | | Subsidiary of InterContinental | | Subsidiary of InterContinental | | Subsidiaries of InterContinental | | Subsidiaries of InterContinental | | Subsidiary of Hyatt | | Subsidiary of Carlson | | TA | | TA | | 5 Managers | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 | | Our TRS | | Our TRS | | Our TRS and a subsidiary of InterContinental | | Our TRS | | Our TRS | | Our TRS | | Subsidiary of TA | | Subsidiary of TA | | 5 Tenants | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investment at December 31, 2007 (2) | | $585,229 | | $193,059 | | $472,410 | | $274,222 | | $436,708 | | $589,429 | | $512,300 | | $230,649 | | $309,850 | | $211,309 | | $1,747,962 | | $654,288 | | $6,217,415 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
End of Current Term | | 2012 | | 2010 | | 2019 | | 2015 | | 2031 | | 2028 | | 2029 | | 2030 | | 2030 | | 2030 | | 2022 | | 2024 | | 2010-2031 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Renewal Options (3) | | 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 12.5 years each | | 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 | | N/A | | 2 for 15 years each | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Annual Minimum Return / Minimum Rent | | $58,379 | | $19,287 | | $49,034 | | $28,508 | | $37,882 | | $50,000 | | $42,873 | | $20,306 | | $23,050 | | $11,890 | | $155,713 (4) | | $62,225 | | $559,147 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Additional Return (5) | | — | | — | | $1,173 | | — | | — | | $10,000 | | $3,458 | | $1,750 | | 50% of cash flow in excess of minimum return (6) | | 50% of cash flow in excess of minimum return (6) | | — | | — | | $16,381 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percentage Return / Rent (7) | | 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 | | 7.5% of revenues above 2004/06/08 revenues | | 7.5% of revenues above 2006/07 revenues | | 7.5% of revenues above 2006/07 revenues | | 7.5% of revenues above 2007 revenues | | — | | — | | 3% of non-fuel revenues and .3% of fuel revenues above 2011 revenues | | 3% of non-fuel revenues and .3% of fuel revenues above 2012 revenues | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Security Deposit | | $50,540 | | $17,220 | | $36,204 | | $28,508 | | $36,872 (8) | | — | | $36,872 (8) | | $36,872 (8) | | — | | — | | — | | — | | $169,344 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 | | Limited guarantee provided by InterContinental | | 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 | | 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 separately funded by us.
(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) The amount of minimum rent payable to us by TA is scheduled to increase to $158,962 $162,625, $166,638, $171,613 and $176,620 in 2008, 2009, 2010, 2011 and 2012, respectively. The annual straight line rent for GAAP reporting purposes is $171,389.
(5) 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.
(6) 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.
(7) 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.
(8) The single $36,872 deposit secures InterContinental’s obligations under the InterContinental No. 1, No. 3 and No. 4 portfolios.
24
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
PORTFOLIO BY OPERATING AGREEMENT, MANAGER AND BRAND
(dollars in thousands)
| | Number of
Properties | | Percent of Number of
Properties | | Number of
Rooms / Suites (1) | | Percent of
Number of
Rooms / Suites (1) | | Investment (2) | | Percent of
Investment | | Investment per
Room / Suite | | Annual
Minimum
Return / Rent | | Percent of
Minimum
Return / Rent | |
By Operating Agreement: | | | | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 6% | | 3,844 | | 9% | | $ | 436,708 | | 7% | | $ | 114 | | $ | 37,882 | | 7% | |
InterContinental (no. 2) | | 76 | | 16% | | 9,220 | | 21% | | 589,429 | | 9% | | 64 | | 50,000 | | 9% | |
InterContinental (no. 3) | | 14 | | 3% | | 4,139 | | 10% | | 512,300 | | 8% | | 124 | | 42,873 | | 8% | |
InterContinental (no. 4) | | 10 | | 2% | | 2,937 | | 7% | | 230,649 | | 4% | | 79 | | 20,306 | | 4% | |
Marriott (no. 1) | | 53 | | 11% | | 7,610 | | 18% | | 585,229 | | 9% | | 77 | | 58,379 | | 10% | |
Marriott (no. 2) | | 18 | | 4% | | 2,178 | | 5% | | 193,059 | | 3% | | 89 | | 19,287 | | 3% | |
Marriott (no. 3) | | 35 | | 8% | | 5,382 | | 12% | | 472,410 | | 8% | | 88 | | 49,034 | | 9% | |
Marriott (no. 4) | | 19 | | 4% | | 2,756 | | 6% | | 274,222 | | 4% | | 100 | | 28,508 | | 5% | |
Hyatt | | 24 | | 5% | | 2,895 | | 7% | | 309,850 | | 5% | | 107 | | 23,050 | | 4% | |
Carlson | | 12 | | 3% | | 2,262 | | 5% | | 211,309 | | 3% | | 93 | | 11,890 | | 2% | |
TA (no. 1) (3) | | 145 | | 30% | | N/A | | N/A | | 1,747,962 | | 29% | | N/A | | 155,713 | | 28% | |
TA (no. 2) | | 40 | | 8% | | N/A | | N/A | | 654,288 | | 11% | | N/A | | 62,225 | | 11% | |
Total | | 477 | | 100% | | 43,223 | | 100% | | $ | 6,217,415 | | 100% | | $ | 88 | | $ | 559,147 | | 100% | |
| | | | | | | | | | | | | | | | | | | |
By Manager: | | | | | | | | | | | | | | | | | | | |
InterContinental | | 125 | | 26% | | 17,926 | | 41% | | $ | 1,524,920 | | 25% | | $ | 85 | | $ | 155,208 | | 28% | |
Marriott International | | 131 | | 28% | | 20,140 | | 47% | | 1,769,086 | | 28% | | 88 | | 151,061 | | 27% | |
Hyatt | | 24 | | 5% | | 2,895 | | 7% | | 309,850 | | 5% | | 107 | | 23,050 | | 4% | |
Carlson | | 12 | | 3% | | 2,262 | | 5% | | 211,309 | | 3% | | 93 | | 11,890 | | 2% | |
TA (3) | | 185 | | 38% | | N/A | | N/A | | 2,402,250 | | 39% | | N/A | | 217,938 | | 39% | |
Total | | 477 | | 100% | | 43,223 | | 100% | | $ | 6,217,415 | | 100% | | $ | 88 | | $ | 559,147 | | 100% | |
| | | | | | | | | | | | | | | | | | | |
By Brand: | | | | | | | | | | | | | | | | | | | |
AmeriSuites® / Hyatt PlaceTM | | 24 | | 5% | | 2,895 | | 7% | | $ | 309,850 | | 5% | | $ | 107 | | | | | |
Candlewood Suites® | | 76 | | 16% | | 9,220 | | 20% | | 589,411 | | 9% | | 64 | | | | | |
Country Inn & Suites by CarlsonSM | | 5 | | 1% | | 753 | | 2% | | 74,827 | | 1% | | 99 | | | | | |
Courtyard by Marriott® | | 71 | | 15% | | 10,280 | | 24% | | 845,079 | | 14% | | 82 | | | | | |
Crowne Plaza® | | 12 | | 3% | | 4,406 | | 10% | | 367,655 | | 6% | | 83 | | | | | |
Holiday Inn® | | 3 | | 1% | | 697 | | 2% | | 35,526 | | 1% | | 51 | | | | | |
InterContinental® | | 5 | | 1% | | 1,479 | | 3% | | 300,185 | | 5% | | 203 | | | | | |
Marriott Hotels® | | 3 | | 1% | | 1,356 | | 3% | | 117,254 | | 2% | | 86 | | | | | |
Park Plaza® Hotels & Resorts | | 2 | | 0% | | 375 | | 1% | | 20,888 | | 0% | | 56 | | | | | |
Radisson Hotels & Resorts® | | 5 | | 1% | | 1,134 | | 3% | | 115,593 | | 2% | | 102 | | | | | |
Residence Inn by Marriott® | | 37 | | 8% | | 4,695 | | 11% | | 438,048 | | 7% | | 93 | | | | | |
SpringHill Suites by Marriott® | | 2 | | 0% | | 264 | | 1% | | 20,833 | | 0% | | 79 | | | | | |
Staybridge Suites® | | 35 | | 7% | | 4,338 | | 10% | | 476,309 | | 8% | | 110 | | | | | |
TownePlace Suites by Marriott® | | 12 | | 3% | | 1,331 | | 3% | | 103,707 | | 1% | | 78 | | | | | |
TravelCenters of America® | | 145 | | 30% | | N/A | | N/A | | 1,747,962 | | 28% | | N/A | | | | | |
Petro Stopping Centers® | | 40 | | 8% | | N/A | | N/A | | 654,288 | | 11% | | N/A | | | | | |
Total | | 477 | | 100% | | 43,223 | | 100% | | $ | 6,217,415 | | 100% | | $ | 88 | | | | | |
(1) | | 18 of our TA properties include a hotel. 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 separately funded by us. |
(3) | | The amount of annual minimum rent payable to us by TA is scheduled to increase to $158,962, $162,625, $166,638, $171,613 and $176,620 in 2008, 2009, 2010, 2011 and 2012, respectively. The annual straight line rent for GAAP reporting purposes is $171,389. |
25
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
OPERATING STATISTICS BY HOTEL OPERATING AGREEMENT
| | No. of | | No. of
Rooms / | | Fourth Quarter (1) | | Year to Date (1) | |
| | Hotels | | Suites | | 2007 | | 2006 | | Change | | 2007 | | 2006 | | Change | |
ADR | | | | | | | | | | | | | | | | | |
InterContinental (no. 1)(2) | | 31 | | 3,844 | | $ | 108.86 | | $ | 103.12 | | 5.6% | | $ | 110.47 | | $ | 104.38 | | 5.8% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 69.98 | | 67.80 | | 3.2% | | 69.81 | | 66.50 | | 5.0% | |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 139.58 | | 133.51 | | 4.5% | | 141.79 | | 134.49 | | 5.4% | |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 110.97 | | 103.01 | | 7.7% | | 109.64 | | 101.22 | | 8.3% | |
Marriott (no. 1) | | 53 | | 7,610 | | 124.29 | | 118.43 | | 4.9% | | 123.67 | | 117.76 | | 5.0% | |
Marriott (no. 2) | | 18 | | 2,178 | | 124.55 | | 116.93 | | 6.5% | | 119.69 | | 112.81 | | 6.1% | |
Marriott (no. 3) | | 35 | | 5,382 | | 115.41 | | 111.03 | | 3.9% | | 116.65 | | 110.34 | | 5.7% | |
Marriott (no. 4) | | 19 | | 2,756 | | 118.34 | | 113.80 | | 4.0% | | 116.47 | | 114.74 | | 1.5% | |
Hyatt | | 24 | | 2,895 | | 94.06 | | 80.51 | | 16.8% | | 95.45 | | 82.02 | | 16.4% | |
Carlson | | 12 | | 2,262 | | 97.99 | | 92.87 | | 5.5% | | 99.58 | | 92.73 | | 7.4% | |
Total/Average | | 292 | | 43,223 | | $ | 108.33 | | $ | 102.85 | | 5.3% | | $ | 107.18 | | $ | 101.04 | | 6.1% | |
| | | | | | | | | | | | | | | | | |
OCCUPANCY | | | | | | | | | | | | | | | | | |
InterContinental (no. 1)(2) | | 31 | | 3,844 | | 72.4% | | 69.9% | | 2.5pt | | 75.9% | | 76.0% | | -0.1pt | |
InterContinental (no. 2) | | 76 | | 9,220 | | 69.7% | | 70.5% | | -0.8pt | | 74.5% | | 75.7% | | -1.2pt | |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 71.2% | | 6.3% | | 1.9pt | | 76.8% | | 75.1% | | 1.7pt | |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 62.8% | | 67.7% | | -4.9pt | | 68.6% | | 71.8% | | -3.2pt | |
Marriott (no. 1) | | 53 | | 7,610 | | 67.3% | | 66.1% | | 1.2pt | | 69.2% | | 69.3% | | -0.1pt | |
Marriott (no. 2) | | 18 | | 2,178 | | 73.8% | | 75.5% | | -1.7pt | | 76.5% | | 79.9% | | -3.4pt | |
Marriott (no. 3) | | 35 | | 5,382 | | 71.9% | | 71.8% | | 0.1pt | | 75.7% | | 75.4% | | 0.3pt | |
Marriott (no. 4) | | 19 | | 2,756 | | 71.4% | | 70.8% | | 0.6pt | | 73.0% | | 73.2% | | -0.2pt | |
Hyatt | | 24 | | 2,895 | | 60.9% | | 53.5% | | 7.4pt | | 58.8% | | 61.1% | | -2.3pt | |
Carlson | | 12 | | 2,262 | | 62.0% | | 61.4% | | 0.6pt | | 67.0% | | 63.6% | | 3.4pt | |
Total/Average | | 292 | | 43,223 | | 68.9% | | 68.3% | | 0.6pt | | 72.2% | | 72.6% | | -0.4pt | |
| | | | | | | | | | | | | | | | | |
RevPAR | | | | | | | | | | | | | | | | | |
InterContinental (no. 1)(2) | | 31 | | 3,844 | | $ | 78.81 | | $ | 72.08 | | 9.3% | | $ | 83.85 | | $ | 79.33 | | 5.7% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 48.78 | | 47.80 | | 2.1% | | 52.01 | | 50.34 | | 3.3% | |
InterContinental (no. 3)(3) (4) | | 14 | | 4,139 | | 99.38 | | 92.52 | | 7.4% | | 108.89 | | 101.00 | | 7.8% | |
InterContinental (no. 4)(3) | | 10 | | 2,937 | | 69.69 | | 69.74 | | -0.1% | | 75.21 | | 72.68 | | 3.5% | |
Marriott (no. 1) | | 53 | | 7,610 | | 83.65 | | 78.28 | | 6.9% | | 85.58 | | 81.61 | | 4.9% | |
Marriott (no. 2) | | 18 | | 2,178 | | 91.92 | | 88.28 | | 4.1% | | 91.56 | | 90.14 | | 1.6% | |
Marriott (no. 3) | | 35 | | 5,382 | | 82.98 | | 79.72 | | 4.1% | | 88.30 | | 83.20 | | 6.1% | |
Marriott (no. 4) | | 19 | | 2,756 | | 84.49 | | 80.57 | | 4.9% | | 85.02 | | 83.99 | | 1.2% | |
Hyatt | | 24 | | 2,895 | | 57.28 | | 43.07 | | 33.0% | | 56.12 | | 50.11 | | 12.0% | |
Carlson | | 12 | | 2,262 | | 60.75 | | 57.02 | | 6.5% | | 66.72 | | 58.98 | | 13.1% | |
Total/Average | | 292 | | 43,223 | | $ | 74.64 | | $ | 70.25 | | 6.2% | | $ | 77.38 | | $ | 73.36 | | 5.5% | |
(1) | | Includes data for the calendar periods indicated, except for our Marriott® branded hotels, which include data for comparable fiscal periods. |
(2) | | Year to date data excludes 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. |
| “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. |
26
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
COVERAGE BY OPERATING AGREEMENT (1)
| | For the Twelve Months Ended (2) | |
Operating Agreement | | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | |
InterContinental (no. 1) | | 1.09x | | 1.08x | | 1.08x | | 1.07x | | 1.07x | |
InterContinental (no. 2) | | 1.43x | | 1.42x | | 1.39x | | 1.39x | | 1.35x | |
InterContinental (no. 3) (3) (4) | | 1.33x | | 1.31x | | 1.26x | | 1.28x | | 1.37x | |
InterContinental (no. 4) (3) | | 1.39x | | 1.41x | | 1.47x | | 1.48x | | 1.51x | |
Marriott (no. 1) | | 1.63x | | 1.58x | | 1.54x | | 1.51x | | 1.49x | |
Marriott (no. 2) | | 1.33x | | 1.32x | | 1.37x | | 1.36x | | 1.34x | |
Marriott (no. 3) | | 1.24x | | 1.22x | | 1.19x | | 1.15x | | 1.11x | |
Marriott (no. 4) | | 1.22x | | 1.18x | | 1.18x | | 1.18x | | 1.21x | |
Hyatt (5) | | 0.54x | | 0.51x | | 0.50x | | 0.61x | | 0.80x | |
Carlson (3) | | 1.63x | | 1.57x | | 1.55x | | 1.47x | | 1.36x | |
TA (no. 1) (3) | | (6) | | 1.39x | | 1.45x | | 1.49x | | 1.47x | |
TA (no. 2) (3) (4) | | (6) | | 1.14x | | 1.28x | | 1.39x | | 1.37x | |
| | For the Three Months Ended (2) | |
Operating Agreement | | 12/31/2007 | | 9/30/2007 | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | |
InterContinental (no. 1) | | 0.93x | | 1.25x | | 1.21x | | 0.96x | | 0.90x | |
InterContinental (no. 2) | | 1.25x | | 1.57x | | 1.55x | | 1.34x | | 1.24x | |
InterContinental (no. 3) | | 1.22x | | 1.35x | | 1.64x | | 1.13x | | 1.12x | |
InterContinental (no. 4) (3) | | 1.25x | | 1.08x | | 1.65x | | 1.57x | | 1.35x | |
Marriott (no. 1) | | 1.55x | | 1.71x | | 1.83x | | 1.47x | | 1.37x | |
Marriott (no. 2) | | 1.34x | | 1.30x | | 1.48x | | 1.21x | | 1.29x | |
Marriott (no. 3) | | 1.12x | | 1.35x | | 1.44x | | 1.10x | | 1.05x | |
Marriott (no. 4) | | 1.21x | | 1.00x | | 1.33x | | 1.34x | | 1.09x | |
Hyatt (5) | | 0.56x | | 0.60x | | 0.58x | | 0.41x | | 0.42x | |
Carlson | | 1.40x | | 1.62x | | 1.64x | | 1.85x | | 1.16x | |
TA (no. 1) (3) | | (6) | | 1.53x | | 1.52x | | 1.12x | | 1.37x | |
TA (no. 2) (3) (4) | | (6) | | 1.19x | | 1.23x | | 1.04x | | 1.12x | |
(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) | Includes data for periods some properties were not operated by the current operator. |
(5) | In connection with the rebranding of our AmeriSuites® hotels to Hyatt PlaceTM hotels starting in the third quarter of 2006, 21 of the hotels in this portfolio have been undergoing renovations which required some hotel rooms to be taken out of service. |
(6) | Data for the most recent period is not currently available from our tenant, TA. |
| |
| 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. |
27
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2007
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 | | 19,287 | | 3.5% | | 3.5% | |
2011 | | — | | — | | — | |
2012 | | 58,379 | | 10.4% | | 13.9% | |
2013 | | — | | — | | 13.9% | |
2014 | | — | | — | | 13.9% | |
2015 | | 28,508 | | 5.1% | | 19.0% | |
2016 | | — | | — | | 19.0% | |
2017 | | — | | — | | 19.0% | |
2018 and thereafter | | 452,973 | | 81.0% | | 100.0% | |
Total | | $ | 559,147 | | 100.0% | | | |
| | | | | | | |
Weighted average remaining term | | 15.5 years | | | | | |
28
