Exhibit 99.2
HOSPITALITY PROPERTIES TRUST
Fourth Quarter 2009
Supplemental Operating and Financial Data
All amounts in this report are unaudited.
TABLE OF CONTENTS
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CORPORATE INFORMATION | |
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Company Profile | 7 |
Investor Information | 8 |
Research Coverage | 9 |
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FINANCIAL INFORMATION | |
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Key Financial Data | 11 |
Consolidated Balance Sheets | 12 |
Consolidated Statements of Income | 13 |
Notes to Consolidated Statements of Income | 14 |
Consolidated Statements of Cash Flows | 15 |
Calculation of EBITDA | 16 |
Calculation of Funds from Operations (FFO) | 17 |
Segment Information | 18 |
Debt Summary | 20 |
Debt Maturity Schedule | 21 |
Leverage Ratios, Coverage Ratios and Public Debt Covenants | 22 |
FF&E Reserve Escrows | 23 |
2009 Acquisitions and Dispositions Information | 24 |
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OPERATING AGREEMENTS AND PORTFOLIO INFORMATION | |
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Summary of Operating Agreements | 26 |
Portfolio by Operating Agreement, Manager and Brand | 28 |
Operating Statistics by Hotel Operating Agreement | 29 |
Coverage by Operating Agreement | 30 |
Operating Agreement Expiration Schedule | 31 |
2
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS SUPPLEMENTAL OPERATING AND FINANCIAL DATA REPORT CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”, OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:
· OUR MANAGERS’ OR TENANTS’ ABILITY TO PAY RETURNS OR RENT TO US, INCLUDING THE ABILITY OF MARRIOTT AND CRESTLINE TO PAY THE FULL AMOUNT OF MINIMUM RETURNS OR RENTS DUE TO US IN THE FUTURE AND OUR ABILITY TO APPLY A PORTION OF MARRIOTT’S AND CRESTLINE’S SECURITY DEPOSITS WHICH WE HOLD TO COVER ANY SHORTFALLS;
· OUR ABILITY TO PAY DISTRIBUTIONS IN THE FUTURE AND THE AMOUNT OF ANY SUCH DISTRIBUTIONS;
· OUR ABILITY TO RENEW OR REFINANCE OUR REVOLVING CREDIT FACILITY;
· OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL;
· OUR INTENT TO REFURBISH OR MAKE IMPROVEMENTS TO CERTAIN OF OUR PROPERTIES;
· THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY;
· OUR ABILITY TO PAY INTEREST AND DEBT PRINCIPAL;
· OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS;
· OUR TAX STATUS AS A REAL ESTATE INVESTMENT TRUST, OR REIT;
· OUR ABILITY TO PURCHASE ADDITIONAL PROPERTIES; AND
· OTHER MATTERS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS INCLUDING;
· THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS, INCLUDING THE RECENT CHANGES IN THE CAPITAL MARKETS, ON US AND OUR TENANTS;
· ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES, TRAVELCENTERS OF AMERICA LLC, OR TA, AND REIT MANAGEMENT & RESEARCH LLC, OR RMR, AND ITS RELATED ENTITIES AND CLIENTS;
· LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES;
· COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS AFFECTING THE REAL ESTATE, HOTEL, TRANSPORTATION AND TRAVEL CENTER INDUSTRIES, ACCOUNTING RULES, TAX RATES AND SIMILAR MATTERS;
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· COMPETITION WITHIN THE REAL ESTATE INDUSTRY OR THOSE INDUSTRIES IN WHICH OUR TENANTS OPERATE; AND
· ACTS OF TERRORISM, OUTBREAKS OF SO-CALLED PANDEMICS OR OTHER MAN MADE OR NATURAL DISASTERS BEYOND OUR CONTROL.
FOR EXAMPLE:
· OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS DEPENDS UPON A NUMBER OF FACTORS. OUR ASSUMPTIONS ABOUT CONTINUING PAYMENTS FROM OUR TENANTS AND MANAGERS MAY PROVE INACCURATE, AND OUR TENANTS AND MANAGERS MAY NOT PAY ALL OF THE AMOUNTS DUE TO US. WE MAY BE UNABLE TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES OR PREFERRED SHARES AND FUTURE DISTRIBUTIONS MAY BE SUSPENDED OR PAID AT A LESSER RATE THAN THE DISTRIBUTIONS WE NOW PAY;
· HOTEL ROOM DEMAND IS USUALLY A REFLECTION OF THE GENERAL ECONOMIC ACTIVITY IN THE COUNTRY; AND IF HOTEL ROOM DEMAND BECOMES FURTHER DEPRESSED, THE OPERATING RESULTS OF OUR HOTELS MAY DECLINE, THE FINANCIAL RESULTS OF OUR OPERATORS AND TENANTS MAY SUFFER AND OUR OPERATORS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS;
· IF THE AVAILABILITY OF DEBT CAPITAL REMAINS RESTRICTED OR BECOMES MORE RESTRICTED, WE MAY BE UNABLE TO REFINANCE OR REPAY OUR REVOLVING CREDIT FACILITY OR OUR OTHER DEBT OBLIGATIONS WHEN THEY BECOME DUE OR ON TERMS WHICH ARE AS FAVORABLE AS WE NOW HAVE;
· THE CURRENT DEPRESSED LEVELS OF U.S. TRUCKING ACTIVITY MAY CONTINUE FOR LONGER OR BECOME WORSE THAN WE NOW ANTICIPATE. SUCH CIRCUMSTANCES MAY FURTHER REDUCE THE DEMAND FOR GOODS AND SERVICES SOLD BY TA, OUR TRAVEL CENTERS TENANT, AND FURTHER REDUCE TA’S ABILITY TO GENERATE THE CASH FLOWS NECESSARY TO PAY OUR RENTS;
· CONTINUED DEPRESSED HOTEL OPERATING RESULTS MAY RESULT IN THE GUARANTORS OF OUR MINIMUM RETURNS OR RENTS BECOMING UNABLE OR UNWILLING TO MEET THEIR OBLIGATIONS OR THEIR GUARANTEES MAY BE EXHAUSTED;
· THE PRICE WHICH TA MUST PAY TO PURCHASE DIESEL FUEL AND OTHER PRODUCTS WHICH IT SELLS MAY MATERIALLY INCREASE, AND THESE PRICE INCREASES MAY INCREASE TA’s WORKING CAPITAL REQUIREMENTS MORE THAN CURRENTLY EXPECTED AND REDUCE TA’s ABILITY TO PAY OUR RENTS;
· FUEL CONSERVATION EFFORTS, AN EXTENDED PERIOD OF LIMITED ACTIVITY IN THE HOUSING DEVELOPMENT INDUSTRY OR A SIGNIFICANT AND PROLONGED DECLINE IN THE IMPORT INTO THE U.S. OF CONSUMER GOODS, MAY EACH AFFECT THE DEMAND FOR TA’S GOODS AND SERVICES AND TA’S ABILITY TO PAY RENTS TO US, INCLUDING DEFERRED AMOUNTS DUE TO US;
· TA MAY BE OR BECOME UNABLE TO PROPERLY MANAGE ITS BUSINESS TO PRODUCE ADEQUATE CASH FLOWS TO PAY ITS OBLIGATIONS TO US;
· THE DESCRIPTION OF OUR ARRANGEMENT WITH TA AS A DEFERRAL AGREEMENT MAY IMPLY THAT RENT AMOUNTS WHICH ARE NOT PAID WILL BE LATER PAID. IN FACT, SINCE ITS FORMATION, TA HAS NOT PRODUCED CONSISTENT OPERATING PROFITS. IF THE U.S. ECONOMY DOES NOT IMPROVE FROM CURRENT LEVELS OF COMMERCIAL ACTIVITY IN A REASONABLE TIME PERIOD, IF THE PRICE OF DIESEL FUEL INCREASES SIGNIFICANTLY OR FOR VARIOUS OTHER REASONS, TA MAY BECOME UNABLE TO PAY THE DEFERRED RENTS DUE TO US;
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· THE MARRIOTT AND CRESTLINE SECURITY DEPOSITS WHICH WE HOLD ARE NOT IN SEGREGATED CASH ACCOUNTS OR OTHERWISE SEPARATE FROM OUR OTHER ASSETS AND LIABLITIES. ACCORDINGLY, WHEN WE RECORD INCOME BY REDUCING OUR SECURITY DEPOSIT LIABILITY, WE DO NOT RECEIVE ANY CASH PAYMENT. BECAUSE WE DO NOT RECEIVE A CASH PAYMENT AND BECAUSE THE AMOUNT OF THE SECURITY DEPOSITS AVAILABLE FOR FUTURE USE IS REDUCED AS WE APPLY SECURITY DEPOSITS TO COVER PAYMENT SHORTFALLS, MARRIOTT’S OR CRESTLINE’S FAILURE TO PAY MINIMUM RETURNS OR RENTS DUE TO US MAY REDUCE OUR CASH FLOWS AND OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS;
· AN OUTBREAK OF INFECTIOUS DISEASES IN THE UNITED STATES MAY CAUSE TRAVEL TO DECLINE AND ANY SUCH DECLINE MAY ADVERSELY IMPACT THE FINANCIAL RESULTS AT OUR HOTELS AND THE ABILITY OF OUR HOTEL TENANTS AND HOTEL OPERATORS TO MAKE REQUIRED PAYMENTS TO US; AND
· WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT 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, PANDEMICS OR CHANGES IN OUR MANAGERS’ OR TENANTS’ REVENUES OR COSTS, OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY, ARE LARGELY BEYOND OUR CONTROL.
OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN OUR FORWARD LOOKING STATEMENTS ARE DESCRIBED MORE FULLY UNDER ITEM 1A. “RISK FACTORS” IN OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERS ENDED MARCH 31, 2009, JUNE 30, 2009 AND SEPTEMBER 30, 2009, AND IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008, AS AMENDED.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
5
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
The Company: | | Strategy: |
Hospitality Properties Trust, or HPT, we, or us, is a real estate investment trust, or REIT. As of December 31, 2009, we owned 289 hotels and 185 travel centers located in 44 states, Puerto Rico and Canada. At December 31, 2009, our properties were operated by other companies under 13 long term management or lease agreements. We are the only investment grade rated, publicly owned hospitality REIT in the country and we are currently included in a number of financial indices, including the S&P MidCap 400 Index, the Russell 1000 Index, the MSCI U.S. REIT Index, the FTSE EPRA/NAREIT United States Index and the S&P REIT Composite Index. Management: HPT is managed by Reit Management & Research LLC, or RMR. RMR is a real estate management company which was founded in 1986 to manage public investments in real estate. As of December 31, 2009, RMR managed one of the largest portfolios of publicly owned real estate in North America, including nearly 1,350 properties located in 45 states, Washington, D.C., Puerto Rico and Ontario, Canada. RMR has approximately 600 employees in its headquarters and regional offices located throughout the U.S. In addition to managing HPT, RMR also manages HRPT Properties Trust, 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 healthcare properties, and Government Properties Income Trust, a publicly traded REIT that primarily owns buildings majority leased to government tenants located throughout the U.S. RMR also provides management services to Five Star Quality Care, Inc., a healthcare services company which is a tenant of SNH, and TravelCenters of America LLC, or TA, an operator of travel centers, which is our largest tenant. An affiliate of RMR, RMR Advisors, Inc., is the investment manager of mutual funds which principally invest in securities of unaffiliated real estate companies. The public companies managed by RMR and its affiliates had combined total gross assets of approximately $17 billion as of December 31, 2009. We believe that being managed by RMR is a competitive advantage for HPT because RMR provides us with a depth and quality 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 we would have to pay for similar quality services. | | Our business strategy is to maintain and grow an investment portfolio of high quality hotels and travel centers operated by qualified managers. Our properties are managed or leased under long term agreements that provide us cash flows in the form of returns and rents. We also seek to participate in operating improvements at our properties by charging rent increases based upon percentages of gross revenue increases at our properties and participating in hotel profits in excess of the minimum returns due to us at our managed hotels. Generally, we prefer to include multiple properties in one lease or management contract 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 believe we have a conservative capital structure and we limit the amount of debt financing we use. |
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| Stock Exchange Listing: | Corporate Headquarters: |
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| 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 | |
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| Senior Unsecured Debt Ratings: | |
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| Standard & Poor’s — BBB | |
| Moody’s — Baa2 | |
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Portfolio Data by Manager (as of 12/31/09):
| | | | | | | | | | | | | | Percent | |
| | | | | | Percent of | | | | | | Annualized | | of Total | |
| | | | Number | | Number | | | | Percent of | | Minimum | | Minimum | |
| | Number of | | of Rooms/ | | of Rooms/ | | Investment | | Total | | Return / | | Return / | |
Manager | | Properties | | Suites (1) | | Suites (1) | | (000s) | | Investment | | Rent (000s) | | Rent | |
| | | | | | | | | | | | | | | |
InterContinental | | 131 | | 20,140 | | 47% | | $1,783,671 | | 28% | | $153,681 | | 27% | |
Marriott International | | 125 | | 17,920 | | 42% | | 1,601,719 | | 24% | | 162,889 | | 27% | |
Hyatt | | 22 | | 2,724 | | 6% | | 301,942 | | 5% | | 22,037 | | 4% | |
Carlson | | 11 | | 2,096 | | 5% | | 202,251 | | 3% | | 12,920 | | 2% | |
TA (2)(3) | | 185 | | N/A | | N/A | | 2,546,326 | | 40% | | 232,205 | | 40% | |
Total | | 474 | | 42,880 | | 100% | | $6,435,909 | | 100% | | $583,732 | | 100% | |
Operating Statistics by Operating Agreement (Q4 2009):
| | Number of | | Number
of Rooms/ | | Annualized
Minimum
Return / | | Percent
of Total
Minimum | | Coverage (4) | | RevPAR
Change (5) | |
Operating Agreement | | Properties | | Suites (1) | | Rent (000s) | | Return / Rent | | Q4 | | LTM | | Q4 | | LTM | |
| | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 3,844 | | $37,882 | | 6% | | 0.62x | | 0.75x | | -10.0% | | -15.5% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 50,000 | | 9% | | 0.48x | | 0.72x | | -20.6% | | -22.7% | |
InterContinental (no. 3) | | 14 | | 4,139 | | 44,258 | | 8% | | 0.39x | | 0.68x | | -12.6% | | -19.0% | |
InterContinental (no. 4) | | 10 | | 2,937 | | 21,541 | | 4% | | 0.32x | | 0.40x | | -18.0% | | -23.8% | |
Marriott (no. 1) | | 53 | | 7,610 | | 59,405 | | 10% | | 0.76x | | 0.88x | | -16.2% | | -21.5% | |
Marriott (no. 2) | | 18 | | 2,178 | | 21,426 | | 3% | | 0.66x | | 0.72x | | -16.6% | | -17.0% | |
Marriott (no. 3) | | 34 | | 5,020 | | 44,199 | | 8% | | 0.54x | | 0.69x | | -19.7% | | -20.7% | |
Marriott (no. 4) | | 19 | | 2,756 | | 28,509 | | 5% | | 0.62x | | 0.68x | | -19.3% | | -22.2% | |
Marriott (no. 5) | | 1 | | 356 | | 9,350 | | 1% | | -0.19x | | -0.07x | | -13.5% | | -27.9% | |
Hyatt | | 22 | | 2,724 | | 22,037 | | 4% | | 0.55x | | 0.72x | | -9.6% | | -13.6% | |
Carlson | | 11 | | 2,096 | | 12,920 | | 2% | | 0.50x | | 0.66x | | -20.4% | | -26.7% | |
TA (no. 1) (2)(3) | | 145 | | N/A | | 166,028 | | 29% | | 0.85x | | 1.12x | | N/A | | N/A | |
TA (no. 2) (2) | | 40 | | N/A | | 66,177 | | 11% | | 0.71x | | 1.05x | | N/A | | N/A | |
Total / Average | | 474 | | 42,880 | | $583,732 | | 100% | | | | | | -16.6% | | -20.5% | |
($’s in 000s) |
(1) | Eighteen (18) of our TA properties include hotels. The rooms associated with these hotels have been excluded from total number of rooms. |
(2) | Effective July 1, 2008, we entered into a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5,000 per month of rent under its two leases for the period July 1, 2008 until December 31, 2010. For the quarter and twelve months ended December 31, 2009, TA deferred $15,000 and $60,000 in rents, respectively. TA rents presented in this report represent their contractual obligation and do not reflect any rent deferral. |
(3) | The amount of annual minimum rent payable to us under TA agreement no. 1 is scheduled to increase to $169,750, $174,725 and $179,792 in 2010, 2011 and 2012, respectively. These represent contractual rent amounts and do not reflect any rent deferrals (see Note 2). |
(4) | We define coverage as combined total property sales minus all property level expenses which are not subordinated to minimum payments to us and the required FF&E reserve contributions, divided by the minimum return or minimum rent payments due to us. For some management agreements or leases, amounts have been calculated using data for periods prior to our ownership of certain properties and prior to commencement of our operating agreements. TA rent coverage ratios have been calculated based upon the contractual rent amounts and do not reflect the impact of any rent deferrals (see Note 2). |
(5) | We define RevPAR as hotel room revenue per day per available room. RevPar change is the RevPar percentage change in the periods ended December 31, 2009 over the comparable year earlier periods. |
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Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
Barry M. Portnoy | Adam D. Portnoy |
Managing Trustee | Managing Trustee |
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Bruce M. Gans, M.D. | William A. Lamkin |
Independent Trustee | Independent Trustee |
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John L. Harrington | |
Independent Trustee | |
John G. Murray | Mark L. Kleifges |
President and Chief Operating Officer | Treasurer and Chief Financial Officer |
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Ethan S. Bornstein | |
Senior Vice President | |
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, Vice President of Investor Relations, at |
(website) www.hptreit.com | (617) 796-8232 or tbonang@hptreit.com |
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Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
Baird | RBC |
David Loeb | Mike Salinsky |
(414) 765-7063 | (216) 378-7627 |
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Collins Stewart | Stifel Nicolaus |
Bryan Maher | Rod Petrik |
(212) 389-8124 | (410) 454-4131 |
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Keefe, Bruyette & Woods | Wells Fargo Securities |
Smedes Rose | Jeffrey Donnelly |
(212) 887-3696 | (617) 603-4262 |
Credit Suisse | Wells Fargo Securities |
John Giordano | Thierry Perrein |
(212) 538-4935 | (704) 715-8455 |
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UBS | |
Michael Dimler | |
(203) 719-3841 | |
Moody’s Investors Service | Standard and Poor’s |
Maria Maslovsky | Beth Campbell |
(212) 553-4831 | (212) 438-2415 |
HPT is followed by the analysts and its publicly held debt is rated by the rating agencies listed above. Please note that any opinions, estimates or forecasts regarding HPT’s performance made by these analysts or agencies do not represent opinions, forecasts or predictions of HPT or its management. HPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies.
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Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
(amounts in thousands, except per share data)
| | As of and For the Three Months Ended (1) | |
| | 12/31/2009 | | 9/30/2009 | | 6/30/2009 | | 3/31/2009 | | 12/31/2008 | |
| | | | | | | | | | | |
Shares Outstanding: | | | | | | | | | | | |
Common shares outstanding (at end of period) | | 123,380 | | 123,380 | | 111,503 | | 93,993 | | 93,992 | |
Weighted average common shares outstanding - basic and diluted (2) | | 123,380 | | 118,780 | | 95,344 | | 93,992 | | 93,984 | |
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Common Share Data: | | | | | | | | | | | |
Price at end of period | | $ | 23.71 | | $ | 20.37 | | $ | 11.89 | | $ | 12.00 | | $ | 14.87 | |
High during period | | $ | 24.27 | | $ | 21.36 | | $ | 15.48 | | $ | 15.38 | | $ | 20.26 | |
Low during period | | $ | 17.96 | | $ | 11.59 | | $ | 9.04 | | $ | 8.53 | | $ | 6.88 | |
Annualized dividends declared per share (3) | | N/A | | N/A | | N/A | | N/A | | $ | 3.08 | |
Annualized dividend yield (at end of period) (3) | | N/A | | N/A | | N/A | | N/A | | 20.7% | |
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Book Capitalization: | | | | | | | | | | | |
Total debt | | $ | 2,193,561 | | $ | 2,192,181 | | $ | 2,391,731 | | $ | 2,675,783 | | $ | 2,639,060 | |
Plus: total shareholders’ equity | | 3,091,931 | | 3,067,932 | | 2,845,651 | | 2,608,921 | | 2,628,427 | |
Total book capitalization | | $ | 5,285,492 | | $ | 5,260,113 | | $ | 5,237,382 | | $ | 5,284,704 | | $ | 5,267,487 | |
Total debt / total book capitalization | | 41.5% | | 41.7% | | 45.7% | | 50.6% | | 50.1% | |
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Selected Balance Sheet Data: | | | | | | | | | | | |
Total assets | | $ | 5,548,370 | | $ | 5,520,403 | | $ | 5,517,656 | | $ | 5,554,934 | | $ | 5,572,737 | |
Total liabilities | | $ | 2,456,439 | | $ | 2,452,471 | | $ | 2,672,005 | | $ | 2,946,013 | | $ | 2,944,310 | |
Real estate, at cost | | $ | 6,467,131 | | $ | 6,451,733 | | $ | 6,430,423 | | $ | 6,426,100 | | $ | 6,407,884 | |
Total debt / real estate, at cost | | 33.9% | | 34.0% | | 37.2% | | 41.6% | | 41.2% | |
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Market Capitalization: | | | | | | | | | | | |
Total debt (book value) | | $ | 2,193,561 | | $ | 2,192,181 | | $ | 2,391,731 | | $ | 2,675,783 | | $ | 2,639,060 | |
Plus: market value of preferred shares (at end of period) | | | 353,941 | | 328,608 | | 263,608 | | 197,897 | | 219,718 | |
Plus: market value of common shares (at end of period) | | | 2,925,340 | | 2,513,251 | | 1,325,771 | | 1,127,916 | | 1,397,661 | |
Total market capitalization | | $ | 5,472,842 | | $ | 5,034,040 | | $ | 3,981,110 | | $ | 4,001,596 | | $ | 4,256,439 | |
Total debt / total market capitalization | | 40.1% | | 43.5% | | 60.1% | | 66.9% | | 62.0% | |
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Selected Income Statement Data: | | | | | | | | | | | |
Total revenues | | $ | 251,371 | | $ | 264,451 | | $ | 267,082 | | $ | 254,343 | | $ | 282,137 | |
EBITDA (4) | | $ | 134,405 | | $ | 133,866 | | $ | 134,482 | | $ | 133,965 | | $ | 132,768 | |
Net income available for common shareholders (5)(6) | | $ | 25,502 | | $ | 40,796 | | $ | 43,550 | | $ | 53,613 | | $ | 44,989 | |
Funds from operations (FFO) available for common shareholders (5)(7) | | $ | 85,963 | | $ | 91,078 | | $ | 91,610 | | $ | 89,581 | | $ | 85,765 | |
Common distributions declared (3) | | N/A | | N/A | | N/A | | N/A | | $ | 72,374 | |
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Per Share Data: | | | | | | | | | | | |
Net income available for common shareholders (5)(6) | | $ | 0.21 | | $ | 0.34 | | $ | 0.46 | | $ | 0.57 | | $ | 0.48 | |
FFO available for common shareholders (5)(7) | | $ | 0.70 | | $ | 0.77 | | $ | 0.96 | | $ | 0.95 | | $ | 0.91 | |
Common distributions declared (3) | | N/A | | N/A | | N/A | | N/A | | $ | 0.77 | |
FFO payout ratio | | N/A | | N/A | | N/A | | N/A | | 84.6% | |
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Coverage Ratios: | | | | | | | | | | | |
EBITDA (4) / interest expense | | 3.6x | | 3.8x | | 3.8x | | 3.7x | | 3.4x | |
EBITDA (4) / interest expense and preferred distributions | | 3.0x | | 3.2x | | 3.2x | | 3.0x | | 2.9x | |
(1) | The implementation of a new accounting standard affecting the accounting for our 3.8% convertible senior notes resulted in non-cash interest expense for the three months ended December 31, 2009 and 2008 of $1,205, or $.01 per share, and $2,473, or $.03 per share, respectively. The unamortized note discount was $9,481 and $29,228 at December 31, 2009 and 2008, respectively, and the equity component was $38,768 and $43,770 at December 31, 2009 and 2008, respectively. |
(2) | We had no outstanding dilutive common share equivalents during the periods presented. |
(3) | On April 8, 2009, we announced the suspension of our regular quarterly common dividend for the remainder of 2009. On January 13, 2010, we announced a regular quarterly common dividend of $0.45 per share ($1.80 per share per year) payable to shareholders of record as of January 25, 2010; this dividend was paid on February 23, 2010. |
(4) | See page 16 for our calculation of EBITDA. |
(5) | Includes for quarter ended December 31, 2009, a $15,000, or $0.12 per share, rent deferral by TA. Includes for the quarter ended September 30, 2009, a $15,000, or $0.13 per share, rent deferral by TA. Includes for each of the quarters ended June 30, 2009, March 31, 2009 and December 31, 2008, a $15,000, or $0.16 per share, rent deferral by TA. We have not recognized the deferred rent as revenue due to uncertainties regarding future payments of these amounts by TA. |
(6) | Includes for the quarter ended September 30, 2009 a $11,209, or $0.09 per share, gain on extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes. Includes for the quarter ended June 30, 2009 a $13,333, or $0.14 per share, gain on extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes and various issues of our senior notes. Includes for the quarter ended March 31, 2009 a $26,555, or $0.28 per share, gain on extinguishment of debt relating to the repurchase of our 3.8% convertible senior notes. |
(7) | See page 17 for our calculation of FFO. |
11
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
| | As of
December 31,
2009 | | | As of
December 31,
2008 | | |
| | | | | | | |
ASSETS | | | | | | | |
| | | | | | | |
Real estate properties, at cost: | | | | | | | |
Land | | $ | 1,392,472 | | | $ | 1,392,614 | | |
Buildings, improvements and equipment | | 5,074,659 | | | 5,015,270 | | |
| | 6,467,131 | | | 6,407,884 | | |
Accumulated depreciation | | (1,260,624 | ) | | (1,060,203 | ) | |
| | 5,206,507 | | | 5,347,681 | | |
Cash and cash equivalents | | 130,399 | | | 22,450 | | |
Restricted cash (FF&E reserve escrow) | | 25,083 | | | 32,026 | | |
Other assets, net | | 186,381 | | | 170,580 | | |
| | $ | 5,548,370 | | | $ | 5,572,737 | | |
| | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
Revolving credit facility | | $ | — | | | $ | 396,000 | | |
Senior notes, net of discounts | | 1,934,818 | | | 1,693,730 | | |
Convertible senior notes, net of discounts (1) | | 255,269 | | | 545,772 | | |
Mortgage payable | | 3,474 | | | 3,558 | | |
Security deposits | | 151,587 | | | 169,406 | | |
Accounts payable and other liabilities | | 103,678 | | | 128,078 | | |
Due to affiliate | | 2,859 | | | 3,012 | | |
Dividends payable | | 4,754 | | | 4,754 | | |
Total liabilities | | 2,456,439 | | | 2,944,310 | | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Shareholders’ equity: | | | | | | | |
Preferred shares of beneficial interest; no par value; | | | | | | | |
100,000,000 shares authorized: | | | | | | | |
Series B preferred shares; 8 7/8% cumulative redeemable; | | | | | | | |
3,450,000 shares issued and outstanding, aggregate liquidation preference $86,250 | | 83,306 | | | 83,306 | | |
Series C preferred shares; 7% cumulative redeemable; | | | | | | | |
12,700,000 shares issued and outstanding, aggregate liquidation preference $317,500 | | 306,833 | | | 306,833 | | |
Common shares of beneficial interest, $0.01 par value; | | | | | | | |
150,000,000 shares authorized; 123,380,335 and 93,991,635 shares issued and outstanding, respectively | | 1,234 | | | 940 | | |
Additional paid in capital (1) | | 3,462,209 | | | 3,093,827 | | |
Accumulated other comprehensive income (loss) | | 3,230 | | | (511 | ) | |
Cumulative net income | | 2,021,162 | | | 1,827,821 | | |
Cumulative preferred distributions | | (153,521 | ) | | (123,641 | ) | |
Cumulative common distributions | | (2,632,522 | ) | | (2,560,148 | ) | |
Total shareholders’ equity | | 3,091,931 | | | 2,628,427 | | |
| | $ | 5,548,370 | | | $ | 5,572,737 | | |
(1) All periods presented reflect the retroactive application of a new accounting standard affecting the accounting for our 3.8% convertible senior notes. The unamortized note discount was $9,481 and $29,228 at December 31, 2009 and 2008, respectively, and the equity component was $38,768 and $43,770 at December 31, 2009 and 2008, respectively.
12
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
| | For the Three Months Ended | | | For the Twelve Months Ended | |
| | 12/31/2009 | | | 12/31/2008 | | | 12/31/2009 | | | 12/31/2008 | |
Revenues: | | | | | | | | | | | | |
Hotel operating revenues (1) | | $ | 168,108 | | | $ | 199,075 | | | $ | 715,615 | | | $ | 899,474 | |
Minimum rent (1)(2) | | 77,196 | | | 72,608 | | | 301,058 | | | 322,949 | |
Percentage rent (3) | | 1,426 | | | 5,102 | | | 1,426 | | | 5,102 | |
FF&E reserve income (4) | | 4,525 | | | 5,217 | | | 18,934 | | | 23,837 | |
Interest income | | 116 | | | 135 | | | 214 | | | 1,312 | |
Total revenues | | 251,371 | | | 282,137 | | | 1,037,247 | | | 1,252,674 | |
| | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | |
Hotel operating expenses (1) | | 106,252 | | | 119,265 | | | 460,869 | | | 620,008 | |
Interest (including amortization of deferred financing costs and debt discounts of $2,386, $3,483, $11,046 and $13,726, respectively) (5) | | 36,900 | | | 39,032 | | | 143,410 | | | 156,844 | |
Depreciation and amortization | | 61,624 | | | 60,889 | | | 245,868 | | | 239,166 | |
General and administrative | | 9,551 | | | 8,831 | | | 39,660 | | | 37,751 | |
Reserve for straight line rent receivable (6) | | - | | | - | | | - | | | 19,613 | |
Loss on asset impairment (7) | | - | | | - | | | - | | | 53,225 | |
Total expenses | | 214,327 | | | 228,017 | | | 889,807 | | | 1,126,607 | |
| | | | | | | | | | | | |
Income before gain on extinguishment of debt, gain (loss) on sale of real estate and income taxes | | 37,044 | | | 54,120 | | | 147,440 | | | 126,067 | |
Gain on extinguishment of debt (8) | | - | | | - | | | 51,097 | | | - | |
Gain (loss) on sale of real estate, net (9) | | - | | | (1,160 | ) | | - | | | 114 | |
Income before income taxes | | 37,044 | | | 52,960 | | | 198,537 | | | 126,181 | |
Income tax expense | | (4,072 | ) | | (501 | ) | | (5,196 | ) | | (1,846 | ) |
Net income | | 32,972 | | | 52,459 | | | 193,341 | | | 124,335 | |
Preferred distributions | | (7,470 | ) | | (7,470 | ) | | (29,880 | ) | | (29,880 | ) |
Net income available for common shareholders | | $ | 25,502 | | | $ | 44,989 | | | $ | 163,461 | | | $ | 94,455 | |
| | | | | | | | | | | | |
Weighted average common shares outstanding | | 123,380 | | | 93,984 | | | 107,984 | | | 93,944 | |
| | | | | | | | | | | | |
Basic and diluted net income per common share: | | | | | | | | | | | | |
Net income available for common shareholders | | $ | 0.21 | | | $ | 0.48 | | | $ | 1.51 | | | $ | 1.01 | |
See notes to consolidated statement of income on page 14.
13
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(1) At December 31, 2009, each of our 289 hotels is included in one of 11 operating agreements and 197 of our hotels are leased to one of our taxable REIT subsidiaries and managed by independent hotel operating companies and 92 are leased to third parties. Our 185 travel centers are leased under two agreements. Our consolidated statements of income include hotel operating revenues and expenses of managed hotels and rental income from our leased hotels and travel centers. Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $28,620 and $5,799 less than the minimum returns due to us in the three months ended December 31, 2009 and 2008, respectively, and $75,205 less than the minimum returns due to us in the twelve months ended December 31, 2009. We reflect these amounts in our consolidated statements of income as a reduction to hotel operating expenses when the minimum returns were funded by the manager of these hotels under the terms of our operating agreements, or in the case of our Marriott No. 3 agreement, applied from the security deposit we hold. All of our managed hotel portfolios generated net operating results in excess of the minimum returns due to us in the twelve months ended December 31, 2008.
(2) Under the previously announced rent deferral agreement, TA elected to defer rent of $15,000, or $0.12 per share, and $15,000, or $0.16 per share, during the three months ended December 31, 2009 and 2008, respectively. During the twelve months ended December 31, 2009 and 2008, TA elected to defer rent of $60,000, or $0.56 per share, and $30,000, or $0.32 per share, respectively. We have not recognized the deferred rent as revenue due to uncertainties regarding future payments of these amounts by TA.
(3) In calculating net income we recognize percentage rental income in the fourth quarter, which is when all contingencies are met and the income is earned.
(4) Various percentages of total sales at our hotels are escrowed as reserves for future renovations or refurbishment, or FF&E reserve escrows. We own all the FF&E escrows for our hotels. We report deposits by our third party tenants into the escrow accounts as FF&E reserve income. We do not report the amounts which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income.
(5) During the first quarter of 2009, we adopted a new accounting standard affecting the accounting for our 3.8% convertible senior notes. This standard requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Our 3.8% convertible senior notes are within the scope of this standard. Our financial statements for all periods presented have been adjusted to reflect the application of this standard retrospectively. The implementation of this standard resulted in non-cash interest expense for the three months ended December 31, 2009 and 2008 of $1,205, or $0.01 per share, and $2,473, or $0.03 per share, respectively. Non-cash interest for the twelve months ended December 31, 2009 and 2008 totaled $6,910, or $0.06 per share, and $9,660, or $0.10 per share, respectively.
(6) During the second quarter of 2008, we recorded a $19,613, or $0.21 per share, non-cash reserve for the straight line rent receivable relating to our lease with TA for 145 travel centers.
(7) During the second quarter of 2008, we recorded a $53,225, or $0.57 per share, non-cash loss on asset impairment related to the write down of certain intangible assets arising from our January 2007 TA acquisition to their estimated fair value.
(8) For the twelve months ended December 31, 2009, we recorded a $51,097, or $0.47 per share, non-cash gain on the extinguishment of debt relating to our repurchase of $367,421 face amount of our 3.8% convertible senior notes and various issues of our senior notes for an aggregate purchase price of $303,341, excluding accrued interest. The gain on extinguishment of debt is net of unamortized issuance costs and discounts of $17,985 and a portion of the allocated equity component on the convertible notes of $5,002.
(9) During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, AZ for $8,000 and recognized a gain on sale of $645. During the second quarter of 2008, we sold our AmeriSuites hotel in Atlantic Beach, NC for $6,350 and recognized a gain on sale of $629. During the fourth quarter of 2008, we sold our AmeriSuites hotel in Tampa, FL for $2,500 and recognized a loss on sale of $1,160.
14
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | For the Twelve Months Ended | |
| | 12/31/2009 | | 12/31/2008 |
| | | | | | |
Cash flows from operating activities: | | | | | | |
Net income | | $ | 193,341 | | | $ | 124,335 | |
Adjustments to reconcile net income to cash provided by operating activities: | | | | | | |
Depreciation and amortization | | 245,868 | | | 239,166 | |
Amortization of deferred financing costs and debt discounts as interest | | 11,046 | | | 13,726 | |
Straight line rental income | | - | | | (3,780 | ) |
Reserve for straight line rent receivable | | - | | | 19,613 | |
Security deposits applied to payment shortfalls | | (17,813 | ) | | - | |
Other non-cash (income) expense, net | | (2,107 | ) | | (992 | ) |
FF&E reserve income and deposits | | (49,218 | ) | | (63,047 | ) |
Loss on asset impairment | | - | | | 53,225 | |
Gain on extinguishment of debt | | (51,097 | ) | | - | |
Gain on sale of real estate, net | | - | | | (114 | ) |
Change in assets and liabilities: | | | | | | |
Decrease in other assets | | 1,297 | | | 5,676 | |
Decrease in accounts payable and other | | (11,048 | ) | | (10,767 | ) |
Decrease in due to affiliate | | (153 | ) | | (1,605 | ) |
Cash provided by operating activities | | 320,116 | | | 375,436 | |
| | | | | | |
Cash flows from investing activities: | | | | | | |
Real estate acquisitions | | (9,807 | ) | | (127,133 | ) |
FF&E reserve fundings | | (63,390 | ) | | (34,001 | ) |
Net proceeds from sale of real estate | | - | | | 15,969 | |
Investment in affiliated insurance company | | (5,134 | ) | | - | |
Cash used in investing activities | | (78,331 | ) | | (145,165 | ) |
| | | | | | |
Cash flows from financing activities: | | | | | | |
Proceeds from issuance of common shares, net | | 373,056 | | | - | |
Issuance of senior notes, net of discount | | 296,961 | | | - | |
Repurchase of convertible senior notes | | (258,102 | ) | | - | |
Repurchase of senior notes | | (45,239 | ) | | - | |
Repayment of senior notes | | - | | | (150,000 | ) |
Draws on revolving credit facility | | 389,000 | | | 598,000 | |
Repayments of revolving credit facility | | (785,000 | ) | | (360,000 | ) |
Deferred financing costs incurred | | (2,258 | ) | | (37 | ) |
Distributions to preferred shareholders | | (29,880 | ) | | (29,880 | ) |
Distributions to common shareholders | | (72,374 | ) | | (289,305 | ) |
Cash used in financing activities | | (133,836 | ) | | (231,222 | ) |
| | | | | | |
Increase (decrease) in cash and cash equivalents | | 107,949 | | | (951 | ) |
Cash and cash equivalents at beginning of period | | 22,450 | | | 23,401 | |
Cash and cash equivalents at end of period | | $ | 130,399 | | | $ | 22,450 | |
| | | | | | |
Supplemental cash flow information: | | | | | | |
Cash paid for interest | | $ | 127,869 | | | $ | 141,813 | |
Cash paid for income taxes | | 6,055 | | | 3,897 | |
| | | | | | |
Non cash investing activities: | | | | | | |
Property managers’ deposits in FF&E reserve | | $ | 51,143 | | | $ | 71,760 | |
Property managers’ purchases with FF&E reserve | | | (78,433 | ) | | | (101,869 | ) |
| | | | | | | | |
Non cash financing activities: | | | | | | | | |
Issuance of common shares | | $ | 624 | | | $ | 2,134 | |
15
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
(in thousands)
| | For the Three Months Ended | | For the Twelve Months Ended |
| | 12/31/2009 | | 12/31/2008 | | 12/31/2009 | | 12/31/2008 |
| | | | | | | | | | | | |
Net income | | $ | 32,972 | | | $ | 52,459 | | | $ | 193,341 | | | $ | 124,335 | |
Plus: Interest expense | | 36,900 | | | 39,032 | | | 143,410 | | | 156,844 | |
Depreciation and amortization | | 61,624 | | | 60,889 | | | 245,868 | | | 239,166 | |
Income taxes | | 4,072 | | | 501 | | | 5,196 | | | 1,846 | |
Loss on asset impairment (1) | | - | | | - | | | - | | | 53,225 | |
Loss on sale of real estate (2) | | - | | | 1,160 | | | - | | | 1,160 | |
Less: Deferred percentage rent previously recognized in EBITDA (3) | | (1,163 | ) | | (4,385 | ) | | - | | | - | |
Deferred additional returns previously recognized in EBITDA (4) | | - | | | (16,888 | ) | | - | | | - | |
Gain on extinguishment of debt (5) | | - | | | - | | | (51,097 | ) | | - | |
Gain on sale of real estate (2) | | - | | | - | | | - | | | (1,274 | ) |
EBITDA | | $ | 134,405 | | | $ | 132,768 | | | $ | 536,718 | | | $ | 575,302 | |
(1) | During the second quarter of 2008, we recorded a $53,225, or $0.57 per share, non-cash loss on asset impairment related to the write down of certain intangible assets arising from our January 2007 TA acquisition to their estimated fair value. |
(2) | During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, AZ for $8,000 and recognized a gain on sale of $645. During the second quarter of 2008, we sold our AmeriSuites hotel in Atlantic Beach, NC for $6,350 and recognized a gain on sale of $629. During the fourth quarter of 2008, we sold our AmeriSuites hotel in Tampa, FL for $2,500 and recognized a loss on sale of $1,160. |
(3) | In calculating net income, we recognize percentage rental income received for the first, second and third quarters in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this revenue until the fourth quarter for purposes of calculating net income, we include these amounts in the calculation of EBITDA for each quarter of the year. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters. Percentage rental income included in EBITDA was $263 and $717 in the fourth quarter of 2009 and 2008, respectively. |
(4) | Our share of the operating results of our managed hotels in excess of the minimum returns due to us, or additional returns, is generally determined based upon annual calculations. We recognize additional returns in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this income until the fourth quarter for purposes of calculating net income, we include these amounts in the calculation of EBITDA for each quarter of the year. The fourth quarter EBITDA calculation excludes the amounts recognized during the first three quarters. There were no additional returns included in EBITDA in 2009. Additional returns included in EBITDA were ($1,958) in the fourth quarter of 2008. |
(5) | For the twelve months ended December 31, 2009, we recorded a $51,097, or $0.47 per share, gain on the extinguishment of debt relating to our repurchase of $367,421 face amount of our 3.8% convertible senior notes and various issues of our senior notes for an aggregate purchase price of $303,341, excluding accrued interest. The gain on extinguishment of debt is net of unamortized issuance costs and discounts of $17,985 and a portion of the allocated equity component on the convertible notes of $5,002. |
We compute EBITDA, or earnings before interest, taxes, depreciation and amortization, as net income plus interest expense, depreciation and amortization expense, income tax expense, deferred percentage rent, deferred additional returns, loss on sale of real estate and loss on asset impairment less gain on extinguishment of debt and gain on sale of real estate. Other companies may calculate EBITDA differently than we do. We consider EBITDA to be an appropriate measure of our performance, along with net income and cash flow from operating, investing and financing activities. We believe EBITDA provides useful information to investors because by excluding the effects of certain historical costs, such as interest and depreciation and amortization expense, EBITDA can facilitate a comparison of our current operating performance with our past operating 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.
16
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
CALCULATION OF FUNDS FROM OPERATIONS (FFO)
(in thousands, except per share data)
| | For the Three Months Ended | | For the Twelve Months Ended |
| | 12/31/2009 | | 12/31/2008 | | 12/31/2009 | | 12/31/2008 |
| | | | | | | | | | | | |
Net income available for common shareholders | | $ 25,502 | | | $ 44,989 | | | $ 163,461 | | | $ 94,455 | |
Plus: | Depreciation and amortization | | 61,624 | | | 60,889 | | | 245,868 | | | 239,166 | |
| Loss on asset impairment (1) | | - | | | - | | | - | | | 53,225 | |
| Loss on sale of real estate (2) | | - | | | 1,160 | | | - | | | 1,160 | |
Less: | Deferred percentage rent previously recognized in FFO (3) | | (1,163 | ) | | (4,385 | ) | | - | | | - | |
| Deferred additional returns previously recognized in FFO (4) | | - | | | (16,888 | ) | | - | | | - | |
| Gain on extinguishment of debt (5) | | - | | | - | | | (51,097 | ) | | - | |
| Gain on sale of real estate (2) | | - | | | - | | | - | | | (1,274 | ) |
FFO available for common shareholders | | $ 85,963 | | | $ 85,765 | | | $ 358,232 | | | $ 386,732 | |
| | | | | | | | | | | | |
Weighted average shares outstanding | | 123,380 | | | 93,984 | | | 107,984 | | | 93,944 | |
| | | | | | | | | | | | |
Net income available for common shareholders per share | | $ 0.21 | | | $ 0.48 | | | $ 1.51 | | | $ 1.01 | |
FFO available for common shareholders per share | | $ 0.70 | | | $ 0.91 | | | $ 3.32 | | | $ 4.12 | |
(1) During the second quarter of 2008, we recorded a $53,225, or $0.57 per share, non-cash loss on asset impairment related to the write down of certain intangible assets arising from our January 2007 TA acquisition to their estimated fair value.
(2) During the first quarter of 2008, we sold our Park Plaza hotel in North Phoenix, AZ for $8,000 and recognized a gain on sale of $645. During the second quarter of 2008, we sold our AmeriSuites hotel in Atlantic Beach, NC for $6,350 and recognized a gain on sale of $629. During the fourth quarter of 2008, we sold our AmeriSuites hotel in Tampa, FL for $2,500 and recognized a loss on sale of $1,160.
(3) In calculating net income, we recognize percentage rental income received for the first, second and third quarters in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this revenue until the fourth quarter for purposes of calculating net income, we include these estimated amounts in the calculation of FFO for each quarter of the year. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters. Percentage rental income included in FFO was $263 and $717 in the fourth quarter of 2009 and 2008, respectively.
(4) Our share of the operating results of our managed hotels in excess of the minimum returns due to us, or additional returns, is generally determined based upon annual calculations. We recognize additional returns in the fourth quarter, which is when all contingencies are met and the income is earned. Although we defer recognition of this income until the fourth quarter for purposes of calculating net income, we include these estimated amounts in the calculation of FFO for each quarter of the year. The fourth quarter FFO calculation excludes the amounts recognized during the first three quarters. There were no additional returns included in FFO in 2009. Additional returns included in FFO were ($1,958) in the fourth quarter of 2008.
(5) For the twelve months ended December 31, 2009, we recorded a $51,097, or $0.47 per share, non-cash gain on the extinguishment of debt relating to our repurchase of $367,421 face amount of our 3.8% convertible senior notes and various issues of our senior notes for an aggregate purchase price of $303,341, excluding accrued interest. The gain on extinguishment of debt is net of unamortized issuance costs and discounts of $17,985 and a portion of the equity component of the conversion element of the convertible notes of $5,002.
We compute FFO as shown above. Our calculation of FFO differs from the definition of FFO by the National Association of Real Estate Investment Trusts, or NAREIT, because we include deferred percentage rent (see Note 6) and deferred additional returns (see Note 7) and exclude loss on asset impairment (see Note 4) and gain on extinguishment of debt (see Note 8). We consider FFO to be an appropriate measure of performance for a real estate investment trust, or REIT, along with net income and cash flow from operating, investing and financing activities. We believe that FFO provides useful information to investors because by excluding the effects of certain historical costs, such as depreciation expense, FFO can facilitate a comparison of current operating performance among REITs. FFO does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income or cash flow from operating activities as a measure of financial performance or liquidity. FFO is one important factor considered by our board of trustees in determining the amount of distributions to shareholders. Other important factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our revolving credit facility and public debt covenants, the availability of debt and equity capital to us and our expectation of our future capital needs and operating performance.
17
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
SEGMENT INFORMATION
(in thousands)
| | For the Three Months Ended December 31, 2009 |
| | Hotels | | Travel Centers | | Corporate | | Consolidated |
| | | | | | | | | | | | |
Hotel operating revenues | | $ 168,108 | | | $ - | | | $ - | | | $ 168,108 | |
Minimum rent | | 32,649 | | | 44,547 | | | - | | | 77,196 | |
Percentage rent | | 1,426 | | | - | | | - | | | 1,426 | |
FF&E reserve income | | 4,525 | | | - | | | - | | | 4,525 | |
Interest income | | - | | | - | | | 116 | | | 116 | |
Total revenues | | 206,708 | | | 44,547 | | | 116 | | | 251,371 | |
Hotel operating expenses | | (106,252 | ) | | - | | | - | | | (106,252 | ) |
Operating income | | 100,456 | | | 44,547 | | | 116 | | | 145,119 | |
| | | | | | | | | | | | |
Interest expense | | - | | | - | | | 36,900 | | | 36,900 | |
Depreciation and amortization expense | | 41,186 | | | 20,438 | | | - | | | 61,624 | |
General and administrative expense | | - | | | - | | | 9,551 | | | 9,551 | |
Total expenses | | 41,186 | | | 20,438 | | | 46,451 | | | 108,075 | |
| | | | | | | | | | | | |
Income (loss) before income taxes | | 59,270 | | | 24,109 | | | (46,335 | ) | | 37,044 | |
Income tax expense | | - | | | - | | | (4,072 | ) | | (4,072 | ) |
| | | | | | | | | | | | |
Net income (loss) | | $ 59,270 | | | $ 24,109 | | | $ (50,407 | ) | | $ 32,972 | |
| | | | | | | | | | | | |
| | As of and for the Twelve Months Ended December 31, 2009 |
| | Hotels | | Travel Centers | | Corporate | | Consolidated |
| | | | | | | | | | | | |
Hotel operating revenues | | $ 715,615 | | | $ - | | | $ - | | | $ 715,615 | |
Minimum rent | | 129,210 | | | 171,848 | | | - | | | 301,058 | |
Percentage rent | | 1,426 | | | - | | | - | | | 1,426 | |
FF&E reserve income | | 18,934 | | | - | | | - | | | 18,934 | |
Interest income | | - | | | - | | | 214 | | | 214 | |
Total revenues | | 865,185 | | | 171,848 | | | 214 | | | 1,037,247 | |
Hotel operating expenses | | (460,869 | ) | | - | | | - | | | (460,869 | ) |
Operating income | | 404,316 | | | 171,848 | | | 214 | | | 576,378 | |
| | | | | | | | | | | | |
Interest expense | | - | | | - | | | 143,410 | | | 143,410 | |
Depreciation and amortization expense | | 163,024 | | | 82,844 | | | - | | | 245,868 | |
General and administrative expense | | - | | | - | | | 39,660 | | | 39,660 | |
Total expenses | | 163,024 | | | 82,844 | | | 183,070 | | | 428,938 | |
| | | | | | | | | | | | |
Income (loss) before gain on extinguishment of debt and income taxes | | 241,292 | | | 89,004 | | | (182,856 | ) | | 147,440 | |
Gain on extinguishment of debt | | - | | | - | | | 51,097 | | | 51,097 | |
Income (loss) before income taxes | | 241,292 | | | 89,004 | | | (131,759 | ) | | 198,537 | |
Income tax expense | | - | | | - | | | (5,196 | ) | | (5,196 | ) |
| | | | | | | | | | | | |
Net income (loss) | | $ 241,292 | | | $ 89,004 | | | $ (136,955 | ) | | $ 193,341 | |
| | | | | | | | | | | | |
Total assets | | $ 3,128,108 | | | $ 2,278,942 | | | $ 141,320 | | | $ 5,548,370 | |
18
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
SEGMENT INFORMATION
(in thousands)
| | For the Three Months Ended December 31, 2008 |
| | Hotels | | Travel Centers | | Corporate | | Consolidated |
| | | | | | | | | | | | |
Hotel operating revenues | | $ 199,075 | | | $ - | | | $ - | | | $ 199,075 | |
Minimum rent | | 31,090 | | | 41,518 | | | - | | | 72,608 | |
Percentage rent | | 5,102 | | | - | | | - | | | 5,102 | |
FF&E reserve income | | 5,217 | | | - | | | - | | | 5,217 | |
Interest income | | - | | | - | | | 135 | | | 135 | |
Total revenues | | 240,484 | | | 41,518 | | | 135 | | | 282,137 | |
Hotel operating expenses | | (119,265 | ) | | - | | | - | | | (119,265 | ) |
Operating income | | 121,219 | | | 41,518 | | | 135 | | | 162,872 | |
| | | | | | | | | | | | |
Interest expense | | - | | | - | | | 39,032 | | | 39,032 | |
Depreciation and amortization expense | | 39,382 | | | 21,507 | | | - | | | 60,889 | |
General and administrative expense | | - | | | - | | | 8,831 | | | 8,831 | |
Total expenses | | 39,382 | | | 21,507 | | | 47,863 | | | 108,752 | |
| | | | | | | | | | | | |
Income (loss) before loss on sale of real estate and income taxes | | 81,837 | | | 20,011 | | | (47,728 | ) | | 54,120 | |
Loss on sale of real estate | | (1,160 | ) | | - | | | - | | | (1,160 | ) |
Income (loss) before income taxes | | 80,677 | | | 20,011 | | | (47,728 | ) | | 52,960 | |
Income tax expense | | - | | | - | | | (501 | ) | | (501 | ) |
| | | | | | | | | | | | |
Net income (loss) | | $ 80,677 | | | $ 20,011 | | | $ (48,229 | ) | | $ 52,459 | |
| | | | | | | | | | | | |
| | As of and for the Twelve Months Ended December 31, 2008 |
| | Hotels | | Travel Centers | | Corporate | | Consolidated |
| | | | | | | | | | | | |
Hotel operating revenues | | $ 899,474 | | | $ - | | | $ - | | | $ 899,474 | |
Minimum rent | | 124,396 | | | 198,553 | | | - | | | 322,949 | |
Percentage rent | | 5,102 | | | - | | | - | | | 5,102 | |
FF&E reserve income | | 23,837 | | | - | | | - | | | 23,837 | |
Interest income | | - | | | - | | | 1,312 | | | 1,312 | |
Total revenues | | 1,052,809 | | | 198,553 | | | 1,312 | | | 1,252,674 | |
Hotel operating expenses | | (620,008 | ) | | - | | | - | | | (620,008 | ) |
Operating income | | 432,801 | | | 198,553 | | | 1,312 | | | 632,666 | |
| | | | | | | | | | | | |
Interest expense | | - | | | - | | | 156,844 | | | 156,844 | |
Depreciation and amortization expense | | 155,488 | | | 83,678 | | | - | | | 239,166 | |
General and administrative expense | | - | | | - | | | 37,751 | | | 37,751 | |
Reserve for straight line rent receivable | | - | | | 19,613 | | | - | | | 19,613 | |
Loss on asset impairment | | - | | | 53,225 | | | - | | | 53,225 | |
Total expenses | | 155,488 | | | 156,516 | | | 194,595 | | | 506,599 | |
| | | | | | | | | | | | |
Income (loss) before gain on sale of real estate and income taxes | | 277,313 | | | 42,037 | | | (193,283 | ) | | 126,067 | |
Gain on sale of real estate | | 114 | | | - | | | - | | | 114 | |
Income (loss) before income taxes | | 277,427 | | | 42,037 | | | (193,283 | ) | | 126,181 | |
Income tax expense | | - | | | - | | | (1,846 | ) | | (1,846 | ) |
| | | | | | | | | | | | |
Net income (loss) | | $ 277,427 | | | $ 42,037 | | | $ (195,129 | ) | | $ 124,335 | |
| | | | | | | | | | | | |
Total assets | | $ 3,181,053 | | | $ 2,350,097 | | | $ 41,587 | | | $ 5,572,737 | |
19
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
(dollars in thousands)
| | Interest
Rate | | Principal
Balance | | Maturity
Date | | Years to
Maturity | |
| | | | | | | | | | | | | | |
Secured Fixed Rate Debt: | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Mortgage - secured by one hotel in Overland Park, KS | | 8.300 | % | | $ | 3,474 | | | 07/01/11 | | | 1.5 | | |
| | | | | | | | | | | | | | |
Unsecured Debt: | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Unsecured Floating Rate Debt: | | | | | | | | | | | | | | |
Revolving credit facility (LIBOR + 55 bps) (1) | | - | | | $ | - | | | 10/24/10 | | | 0.8 | | |
| | | | | | | | | | | | | | |
Unsecured Fixed Rate Debt: | | | | | | | | | | | | | | |
Senior notes due 2010 | | 9.125 | % | | $ | 50,000 | | | 07/15/10 | | | 0.5 | | |
Senior notes due 2012 | | 6.850 | % | | | 100,829 | | | 07/15/12 | | | 2.5 | | |
Senior notes due 2013 | | 6.750 | % | | | 287,000 | | | 02/15/13 | | | 3.1 | | |
Senior notes due 2014 | | 7.875 | % | | | 300,000 | | | 08/15/14 | | | 4.6 | | |
Senior notes due 2015 | | 5.125 | % | | | 280,000 | | | 02/15/15 | | | 5.1 | | |
Senior notes due 2016 | | 6.300 | % | | | 275,000 | | | 06/15/16 | | | 6.5 | | |
Senior notes due 2017 | | 5.625 | % | | | 300,000 | | | 03/15/17 | | | 7.2 | | |
Senior notes due 2018 | | 6.700 | % | | | 350,000 | | | 01/15/18 | | | 8.0 | | |
Convertible senior notes due 2027 | | 3.800 | % | | | 264,750 | | | 03/15/27 | | (2) | 17.2 | | |
Total / weighted average unsecured fixed rate debt | | 6.184 | % | | $ | 2,207,579 | | | | | | 6.9 | | |
| | | | | | | | | | | | | | |
Weighted average secured fixed rate debt / total | | 8.300 | % | | $ | 3,474 | | | | | | 1.5 | | |
Weighted average unsecured floating rate debt / total | | - | | | | - | | | | | | 0.8 | | |
Weighted average unsecured fixed rate debt / total | | 6.184 | % | | | 2,207,579 | | | | | | 6.9 | | |
Weighted average debt / total | | 6.188 | % | | $ | 2,211,053 | | | | | | 6.9 | | |
(1) We have no amounts outstanding on our $750 million revolving credit facility at December 31, 2009. Subject to certain conditions, at our option, this facility’s maturity date can be extended to October 24, 2011 upon our payment of a fee.
(2) The convertible senior notes are convertible if certain conditions are met (including certain changes in control) into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the initial exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior notes may require us to repurchase all or a portion of the notes on March 20, 2012, March 15, 2017, and March 15, 2022, or upon the occurrence of certain change in control events prior to March 20, 2012.
20
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
(dollars in thousands)
| | Scheduled Principal Payments During Period | |
Year | | Secured
Fixed Rate
Debt | | | Unsecured
Floating
Rate Debt | | | Unsecured
Fixed
Rate Debt | | | Total | | |
2010 | | $ 91 | | | $ - | | | $ 50,000 | | | $ 50,091 | | |
2011 | | 3,383 | | | - | | | - | | | 3,383 | | |
2012 | | - | | | - | | | 100,829 | | | 100,829 | | |
2013 | | - | | | - | | | 287,000 | | | 287,000 | | |
2014 | | - | | | - | | | 300,000 | | | 300,000 | | |
2015 | | - | | | - | | | 280,000 | | | 280,000 | | |
2016 | | - | | | - | | | 275,000 | | | 275,000 | | |
2017 | | - | | | - | | | 300,000 | | | 300,000 | | |
2018 | | - | | | - | | | 350,000 | | | 350,000 | | |
2027 | | - | | | - | | | 264,750 | | (1) | 264,750 | | |
| | $ 3,474 | | | $ - | | | $ 2,207,579 | | | $ 2,211,053 | | |
(1) The convertible senior notes are convertible if certain conditions are met (including certain changes in control) into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the initial exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior notes may require us to repurchase all or a portion of the notes on March 20, 2012, March 15, 2017, and March 15, 2022, or upon the occurrence of certain change in control events prior to March 20, 2012.
21
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
LEVERAGE RATIOS, COVERAGE RATIOS AND PUBLIC DEBT COVENANTS
| | As of and For the Three Months Ended | |
| | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | 3/31/2009 | | | 12/31/2008 | |
Leverage Ratios: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total debt / total assets | | 39.5% | | | 39.7% | | | 43.3% | | | 48.2% | | | 47.4% | |
Total debt / real estate assets, at cost | | 33.9% | | | 34.0% | | | 37.2% | | | 41.6% | | | 41.2% | |
Total debt / total book capitalization | | 41.5% | | | 41.7% | | | 45.7% | | | 50.6% | | | 50.1% | |
Total debt / total market capitalization | | 40.1% | | | 43.5% | | | 60.1% | | | 66.9% | | | 62.0% | |
Secured debt / total assets | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | |
Variable rate debt / total debt | | 0.0% | | | 0.0% | | | 13.8% | | | 20.4% | | | 15.0% | |
| | | | | | | | | | | | | | | |
Coverage Ratios: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
EBITDA (1) / interest expense (2) | | 3.6x | | | 3.8x | | | 3.8x | | | 3.7x | | | 3.4x | |
EBITDA (1) / interest expense and preferred distributions (2) | | 3.0x | | | 3.2x | | | 3.2x | | | 3.0x | | | 2.9x | |
| | | | | | | | | | | | | | | |
Public Debt Covenants: (3) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total debt / adjusted total assets - allowable maximum 60.0% | | 33.2% | | | 33.6% | | | 37.0% | | | 41.4% | | | 41.2% | |
Secured debt / adjusted total assets - allowable maximum 40.0% | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | |
Consolidated income available for debt service / debt service - required minimum 1.50x | | 3.66x | | | 3.69x | | | 3.76x | | | 3.63x | | | 3.93x | |
Total unencumbered assets to unsecured debt - required minimum 150% / 200% | | 301.9% | | | 298.1% | | | 270.1% | | | 241.4% | | | 242.8% | |
(1) | See page 16 for our calculation of EBITDA. |
(2) | All periods presented reflect the retroactive application of a new accounting standard affecting the accounting for our 3.8% convertible senior notes. Interest expense includes additional non-cash interest of $1,205, $1,294, $2,030, $2,381 and $2,473 for the three months ended December 31, 2009, September 30, 2009, June 30, 2009, March 31, 2009 and December 31, 2008, respectively, resulting from the adoption of this standard. |
(3) | Adjusted total assets and unencumbered assets include original cost of real estate assets and acquisition costs less impairment write downs and exclude depreciation and amortization, accounts receivable and intangible assets. Consolidated income available for debt service is earnings from operations excluding interest expense, depreciation and amortization, loss on asset impairment, gains and losses on sales of property and amortization of deferred charges. Debt service excludes non-cash interest related to our convertible senior notes. |
22
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
(dollars in thousands)
| | For the Three Months Ended | |
| | 12/31/2009 | | 9/30/2009 | | 6/30/2009 | | 3/31/2009 | | 12/31/2008 | |
| | | | | | | | | | | |
FF&E reserves (beginning of period) | | $ 25,717 | | $ 23,626 | | $ 25,014 | | $ 32,026 | | $ 37,485 | |
Manager deposits | | 13,425 | | 12,952 | | 13,091 | | 11,675 | | 17,286 | |
HPT fundings (2): | | | | | | | | | | | |
Marriott | | 2,823 | | 3,592 | | 1,464 | | 5,022 | | 4,881 | |
Hyatt | | - | | 600 | | 2,000 | | - | | - | |
InterContinental | | - | | - | | - | | 4,846 | | - | |
Hotel improvements | | (16,882) | | (15,053) | | (17,943) | | (28,555) | | (27,626) | |
FF&E reserves (end of period) | | $ 25,083 | | $ 25,717 | | $ 23,626 | | $ 25,014 | | $ 32,026 | |
(1) | | Generally, each of our hotel operating agreements require the deposit of a percentage of gross hotel revenues into escrows to fund periodic hotel renovations, or FF&E reserves. For recently built or renovated hotels, this requirement may be deferred for a period. We own all the FF&E reserve escrows for our hotels. |
(2) | | Represents FF&E reserve deposits not funded by hotel operations, but separately funded by us. The operating agreements for our hotels generally provide that, if necessary, we will provide FF&E funding in excess of escrowed reserves. To the extent we make such fundings, our annual minimum returns or rent generally increases by a percentage of the amounts we fund. |
23
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
2009 ACQUISITIONS AND DISPOSITIONS INFORMATION
(dollars in thousands)
2009 ACQUISITIONS (through 12/31/2009):
Date
Acquired | | Properties | | Brand | | Location | | Number
of Rooms
/ Suites | | Operating
Agreement | | Purchase
Price | | Purchase
Price per
Room / Suite | |
| | | | | | | | | | | | | | | |
There were no acquisitions during the twelve months ended December 31, 2009. |
2009 DISPOSITIONS (through 12/31/09):
Date
Disposed | | Properties | | Brand | | Location | | Number
of Rooms
/ Suites | | Operating
Agreement | | Sales
Price | | Sales
Price per
Room / Suite | |
| | | | | | | | | | | | | | | |
There were no dispositions during the twelve months ended December 31, 2009. |
24
OPERATING AGREEMENTS
AND PORTFOLIO INFORMATION
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
SUMMARY OF OPERATING AGREEMENTS
(dollars in thousands)
Operating Agreement | | Marriott (No. 1) | | Marriott (No. 2) | | Marriott (No. 3) | | Marriott (No. 4) | | Marriott (No. 5) | | InterContinental (No. 1) | | InterContinental (No. 2) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Number of Properties | | 53 | | 18 | | 34 | | 19 | | 1 | | 31 | | 76 | |
| | | | | | | | | | | | | | | |
Number of Rooms / Suites | | 7,610 | | 2,178 | | 5,020 | | 2,756 | | 356 | | 3,844 | | 9,220 | |
| | | | | | | | | | | | | | | |
Property Brands | | Courtyard by Marriott® | | Residence Inn by Marriott® | | Marriott® / Residence Inn by Marriott® / Courtyard by Marriott® / TownePlace Suites by Marriott® / SpringHill Suites by Marriott® | | Residence Inn by Marriott® / Courtyard by Marriott® / TownePlace Suites by Marriott® / SpringHill Suites by Marriott® | | Marriott® | | Staybridge Suites® | | Candlewood Suites® | |
| | | | | | | | | | | | | | | |
Number of States | | 24 | | 14 | | 14 | | 14 | | 1 | | 16 | | 29 | |
| | | | | | | | | | | | | | | |
Manager | | Subsidiary of Marriott International | | Subsidiary of Marriott International | | Subsidiaries of Marriott International | | Subsidiaries of Marriott International | | Subsidiary of Marriott International | | Subsidiary of InterContinental | | Subsidiary of InterContinental | |
| | | | | | | | | | | | | | | |
Tenant | | Subsidiary of Host Hotels & Resorts Subleased to Subsidiary of Barcelo Crestline | | Subsidiary of Host Hotels & Resorts Subleased to Subsidiary of Barcelo Crestline | | Our TRS | | Subsidiary of Barcelo Crestline | | Subsidiary of Marriott International | | Our TRS | | Our TRS | |
| | | | | | | | | | | | | | | |
Investment at December 31, 2009 (1) | | $595,428 | | $214,448 | | $427,543 | | $274,222 | | $90,078 | | $436,708 | | $589,405 | |
| | | | | | | | | | | | | | | |
End of Current Term | | 2012 | | 2010 | | 2019 | | 2015 | | 2019 | | 2031 | | 2028 | |
| | | | | | | | | | | | | | | |
Renewal Options (2) | | 3 for 12 years each | | (3) | | 2 for 15 years each | | 2 for 10 years each | | 4 for 15 years each | | 2 for 12.5 years each | | 2 for 15 years each | |
| | | | | | | | | | | | | | | |
Annual Minimum Return / Minimum Rent (4) | | $59,405 | | $21,426 | | $44,199 | | $28,509 | | $9,350 | | $37,882 | | $50,000 | |
| | | | | | | | | | | | | | | |
Additional Return (5) | | -- | | -- | | $711 | | -- | | -- | | -- | | $10,000 | |
| | | | | | | | | | | | | | | |
Percentage Return / Rent (6) | | 5% of revenues above 1994/95 revenues | | 7.5% of revenues above 1996 revenues | | 7% of revenues above 2000/01 revenues | | 7% of revenues above 1999/2000 revenues | | CPI based calculation | | 7.5% of revenues above 2004/06/08 revenues | | 7.5% of revenues above 2006/07 revenues | |
| | | | | | | | | | | | | | | |
Security Deposit | | $50,540 | | $17,220 | | $26,986 (7) | | 19,913 (8) | | -- | | $36,872 (9) | | -- | |
| | | | | | | | | | | | | | | |
Other Security Features | | HPT controlled lockbox with minimum balance maintenance requirement; subtenant and subtenant parent minimum net worth requirement | | HPT controlled lockbox with minimum balance maintenance requirement; subtenant and subtenant parent minimum net worth requirement | | | | Tenant minimum net worth requirement | | Marriott guarantee; parent minimum net worth requirement | | Limited guarantee provided by InterContinental; parent minimum net worth requirement | | Limited guarantee provided by InterContinental; parent minimum net worth requirement | |
(1) | Amounts exclude expenditures made from FF&E reserves funded from hotel operations, but includes amounts funded by us separately. |
(2) | Renewal options may be exercised by the manager or tenant for all, but not less than all, of the properties within each combination. |
(3) | In November 2008, we were notified by the tenant that it will not exercise its renewal option at the end of the current lease term. Upon expiration of the agreement on December 31, 2010, we expect to lease these hotels to one of our TRSs and to continue the existing hotel brand and management agreement with Marriott. |
(4) | Each management agreement or lease provides for payment to us of an annual minimum return or minimum rent, respectively. Management fees are generally subordinated to these minimum payment amounts and certain minimum payments are subject to full or limited guarantees. |
(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 management fees. These amounts are generally not guaranteed or secured by deposits. |
(6) | Certain of our management agreements and leases provide for payment to us of a percentage of increases in total sales over base year levels. Percentage returns under our management agreements are payable to us only to the extent of available cash flow, as defined in the agreements. The payment of percentage rent under our leases is not subject to available cash flow. |
(7) | The original amount of this security deposit was $36,204. As of December 31, 2009, we have applied $9,218 of the security deposit to cover deficiencies in the minimum rent paid by Marriott for this agreement. An additional $5,220 was applied in January and February of 2010 to cover additional deficiencies in the minimum rent. As of February 23, 2010, the balance of this security deposit is $21,766. |
(8) | The original amount of this security deposit was $28,508. As of December 31, 2009, we have applied $8,595 of the security deposit to cover deficiencies in the minimum rent paid by Crestline for this agreement. An additional $2,430 was applied in January and February of 2010 to cover additional deficiencies in the minimum rent and late charges. As of February 23, 2010, the balance of this security deposit is $17,483. |
(9) | In addition to the limited guarantee, a single $36,872 deposit secures InterContinental’s obligations under the InterContinental No. 1, No. 3 and No. 4 portfolios. |
26
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
SUMMARY OF OPERATING AGREEMENTS
(dollars in thousands)
Operating Agreement | | InterContinental (No. 3) | | InterContinental (No. 4) | | Hyatt | | Carlson | | TA (No. 1) | | TA (No. 2) | | Total / Range / Average
(all investments) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Number of Properties | | 14 | | 10 | | 22 | | 11 | | 145 | | 40 | | 474 | |
| | | | | | | | | | | | | | | |
Number of Rooms / Suites | | 4,139 | | 2,937 | | 2,724 | | 2,096 | | (1) | | -- | | 42,880 (1) | |
| | | | | | | | | | | | | | | |
Property Brands | | InterContinental® / Crowne Plaza® / Holiday Inn® / Staybridge Suites® | | Crowne Plaza® / Staybridge Suites® | | Hyatt Place® | | Radisson Hotels & Resorts® / Park Plaza® Hotels & Resorts / Country Inn & Suites by CarlsonSM | | TravelCenters of America® | | Petro Stopping Centers® | | 16 Brands | |
| | | | | | | | | | | | | | | |
Number of States | | 7 plus Ontario and Puerto Rico | | 5 | | 14 | | 7 | | 39 | | 25 | | 44 plus Ontario and Puerto Rico | |
| | | | | | | | | | | | | | | |
Manager | | Subsidiaries of InterContinental | | Subsidiaries of InterContinental | | Subsidiary of Hyatt | | Subsidiary of Carlson | | TA | | TA | | 5 Managers | |
| | | | | | | | | | | | | | | |
Tenant | | Our TRS and a subsidiary of InterContinental | | Our TRS | | Our TRS | | Our TRS | | Subsidiary of TA | | Subsidiary of TA | | 5 Tenants | |
| | | | | | | | | | | | | | | |
Investment at December 31, 2009 (2) | | $512,373 | | $245,185 | | $301,942 | | $202,251 | | $1,840,820 | | $705,506 | | 6,435,909 | |
| | | | | | | | | | | | | | | |
End of Current Term | | 2029 | | 2030 | | 2030 | | 2030 | | 2022 | | 2024 | | 2010-2031 | |
| | | | | | | | | | | | | | | |
Renewal Options (3) | | 2 for 15 years each | | 2 for 15 years each | | 2 for 15 years each | | 2 for 15 years each | | N/A | | 2 for 15 years each | | | |
| | | | | | | | | | | | | | | |
Annual Minimum Return / Minimum Rent (4) | $44,258 | | $21,541 | | $22,037 | | $12,920 | | $166,028 (5)(6) | | $66,177 (5) | | $583,732 | |
| | | | | | | | | | | | | | | |
Additional Return (7) | | $3,458 | | $1,750 | | 50% of cash flow in excess of minimum return (8) | | 50% of cash flow in excess of minimum return (8) | | -- | | -- | | $15,919 | |
| | | | | | | | | | | | | | | |
Percentage Return / Rent (9) | | 7.5% of revenues above 2006/07 revenues | | 7.5% of revenues above 2007 revenues | | -- | | -- | | 3% of non-fuel revenues and 0.3% of fuel revenues above 2011 revenues | | 3% of non-fuel revenues and 0.3% of fuel revenues above 2012 revenues | | | |
| | | | | | | | | | | | | | | |
Security Deposit | | $36,872 (10) | | $36,872 (10) | | -- | | -- | | -- | | -- | | $151,531 | |
| | | | | | | | | | | | | | | |
Other Security Features | | Limited guarantee provided by InterContinental; parent minimum net worth requirement | | Limited guarantee provided by InterContinental; parent minimum net worth requirement | | Limited guarantee provided by Hyatt; parent minimum net worth requirement | | Limited guarantee provided by Carlson; parent minimum net worth requirement | | TA guarantee | | TA guarantee | | | |
(1) | Eighteen (18) of our TA properties include hotels. The rooms associated with these hotels have been excluded from total hotel rooms. |
(2) | Amounts exclude expenditures made from FF&E reserves funded from hotel operations, but includes amounts funded by us separately. |
(3) | Renewal options may be exercised by the manager or tenant for all, but not less than all, of the properties within each combination. |
(4) | Each management agreement or lease provides for payment to us of an annual minimum return or minimum rent, respectively. Management fees are generally subordinated to these minimum payment amounts and certain minimum payments are subject to full or limited guarantees. |
(5) | Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5,000 per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. For the three and twelve months ended December 31, 2009, TA deferred $15,000 and $60,000 in rents, respectively. TA rents presented in this report represent their contractual obligation and do not reflect any rent deferral. |
(6) | The amount of minimum rent payable to us by TA is scheduled to increase to $169,750, $174,725 and $179,792 in 2010, 2011 and 2012, respectively. |
(7) | These management agreements provide for annual additional return payments in the amount listed, to the extent of available cash flow after payment of operating costs, funding of the FF&E reserve, payment of our minimum return and payment of certain management fees. These amounts are not guaranteed or secured by deposits. |
(8) | 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. |
(9) | Certain of our management agreements and leases provide for payment to us of a percentage of increases in total sales over base year levels. Percentage returns under our management agreements are payable to us only to the extent of available cash flow, as defined in the agreements. The payment of percentage rent under our leases is not subject to available cash flow. |
(10) | In addition to the limited guarantee, a single $36,872 deposit secures InterContinental’s obligations under the InterContinental No. 1, No. 3 and No. 4 portfolios. |
27
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
PORTFOLIO BY OPERATING AGREEMENT, MANAGER AND BRAND
(dollars in thousands)
| | | | Percent of | | | | Percent of | | | | | | | | Annual | | Percent of | |
| | Number of | | Number of | | Number of | | Number of | | | | Percent of | | Investment per | | Minimum | | Minimum | |
| | Properties | | Properties | | Rooms / Suites (1) | | Rooms / Suites (1) | | Investment (2) | | Investment | | Room / Suite | | Return / Rent | | Return / Rent | |
By Operating Agreement: | | | | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 7% | | 3,844 | | 9% | | $ | 436,708 | | 7% | | $ | 114 | | $ | 37,882 | | 6% | |
InterContinental (no. 2) | | 76 | | 16% | | 9,220 | | 21% | | 589,405 | | 9% | | 64 | | 50,000 | | 9% | |
InterContinental (no. 3) | | 14 | | 3% | | 4,139 | | 10% | | 512,373 | | 8% | | 124 | | 44,258 | | 8% | |
InterContinental (no. 4) | | 10 | | 2% | | 2,937 | | 7% | | 245,185 | | 4% | | 83 | | 21,541 | | 4% | |
Marriott (no. 1) | | 53 | | 11% | | 7,610 | | 18% | | 595,428 | | 9% | | 78 | | 59,405 | | 10% | |
Marriott (no. 2) | | 18 | | 4% | | 2,178 | | 5% | | 214,448 | | 3% | | 98 | | 21,426 | | 3% | |
Marriott (no. 3) | | 34 | | 7% | | 5,020 | | 12% | | 427,543 | | 7% | | 85 | | 44,199 | | 8% | |
Marriott (no. 4) | | 19 | | 4% | | 2,756 | | 6% | | 274,222 | | 4% | | 100 | | 28,509 | | 5% | |
Marriott (no. 5) | | 1 | | - | | 356 | | 1% | | 90,078 | | 1% | | 253 | | 9,350 | | 1% | |
Hyatt | | 22 | | 5% | | 2,724 | | 6% | | 301,942 | | 5% | | 111 | | 22,037 | | 4% | |
Carlson | | 11 | | 2% | | 2,096 | | 5% | | 202,251 | | 3% | | 96 | | 12,920 | | 2% | |
TA (no. 1) (3)(4) | | 145 | | 31% | | N/A | | N/A | | 1,840,820 | | 29% | | N/A | | 166,028 | | 29% | |
TA (no. 2) (3) | | 40 | | 8% | | N/A | | N/A | | 705,506 | | 11% | | N/A | | 66,177 | | 11% | |
Total | | 474 | | 100% | | 42,880 | | 100% | | $ | 6,435,909 | | 100% | | $ | 91 | | $ | 583,732 | | 100% | |
| | | | | | | | | | | | | | | | | | | |
By Manager: | | | | | | | | | | | | | | | | | | | |
InterContinental | | 131 | | 28% | | 20,140 | | 47% | | $ | 1,783,671 | | 28% | | $ | 89 | | $ | 153,681 | | 27% | |
Marriott International | | 125 | | 27% | | 17,920 | | 42% | | 1,601,719 | | 24% | | 89 | | 162,889 | | 27% | |
Hyatt | | 22 | | 5% | | 2,724 | | 6% | | 301,942 | | 5% | | 111 | | 22,037 | | 4% | |
Carlson | | 11 | | 2% | | 2,096 | | 5% | | 202,251 | | 3% | | 96 | | 12,920 | | 2% | |
TA (3)(4) | | 185 | | 38% | | N/A | | N/A | | 2,546,326 | | 40% | | N/A | | 232,205 | | 40% | |
Total | | 474 | | 100% | | 42,880 | | 100% | | $ | 6,435,909 | | 100% | | $ | 91 | | $ | 583,732 | | 100% | |
| | | | | | | | | | | | | | | | | | | |
By Brand: | | | | | | | | | | | | | | | | | | | |
Candlewood Suites® | | 76 | | 16% | | 9,220 | | 22% | | $ | 589,405 | | 9% | | $ | 64 | | | | | |
Country Inn & Suites by CarlsonSM | | 5 | | 1% | | 753 | | 2% | | 75,055 | | 1% | | 100 | | | | | |
Courtyard by Marriott® | | 71 | | 15% | | 10,281 | | 24% | | 855,788 | | 13% | | 83 | | | | | |
Crowne Plaza® | | 12 | | 3% | | 4,406 | | 10% | | 380,784 | | 6% | | 86 | | | | | |
Holiday Inn® | | 3 | | 1% | | 697 | | 2% | | 35,526 | | 1% | | 51 | | | | | |
Hyatt PlaceTM | | 22 | | 5% | | 2,724 | | 6% | | 301,942 | | 5% | | 111 | | | | | |
InterContinental® | | 5 | | 1% | | 1,479 | | 3% | | 300,257 | | 5% | | 203 | | | | | |
Marriott Hotels® | | 3 | | 1% | | 1,349 | | 3% | | 160,425 | | 2% | | 119 | | | | | |
Park Plaza® Hotels & Resorts | | 1 | | 0% | | 209 | | 0% | | 11,042 | | 0% | | 53 | | | | | |
Radisson Hotels & Resorts® | | 5 | | 1% | | 1,134 | | 3% | | 116,156 | | 2% | | 102 | | | | | |
Residence Inn by Marriott® | | 37 | | 8% | | 4,695 | | 11% | | 460,264 | | 7% | | 98 | | | | | |
SpringHill Suites by Marriott® | | 2 | | 0% | | 264 | | 1% | | 20,897 | | 0% | | 79 | | | | | |
Staybridge Suites® | | 35 | | 7% | | 4,338 | | 10% | | 477,698 | | 7% | | 110 | | | | | |
TownePlace Suites by Marriott® | | 12 | | 3% | | 1,331 | | 3% | | 104,344 | | 2% | | 78 | | | | | |
TravelCenters of America® | | 145 | | 30% | | N/A | | N/A | | 1,840,820 | | 29% | | N/A | | | | | |
Petro Stopping Centers® | | 40 | | 8% | | N/A | | N/A | | 705,506 | | 11% | | N/A | | | | | |
Total | | 474 | | 100% | | 42,880 | | 100% | | $ | 6,435,909 | | 100% | | $ | 91 | | | | | |
(1) Eighteen (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) Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5,000 per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. As of December 31, 2009, TA has deferred $90,000 in rents. TA rents presented in this report represent their contractual obligation and do not reflect any rent deferral.
(4) The amount of annual minimum rent payable to us by TA is scheduled to increase to $169,636, $174,600 and $179,666 in 2010, 2011 and 2012, respectively.
28
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
OPERATING STATISTICS BY HOTEL OPERATING AGREEMENT |
| | No. of | | No. of
Rooms / | | Fourth Quarter (1) | | Year to Date (1) | |
| | Hotels | | Suites | | 2009 | | 2008 | | Change | | 2009 | | 2008 | | Change | |
ADR | | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 3,844 | | $ | 95.03 | | $ | 108.43 | | -12.4% | | $ | 101.15 | | $ | 113.41 | | -10.8% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 58.53 | | 70.72 | | -17.2% | | 62.55 | | 71.70 | | -12.8% | |
InterContinental (no. 3) | | 14 | | 4,139 | | 112.88 | | 131.82 | | -14.4% | | 120.54 | | 142.37 | | -15.3% | |
InterContinental (no. 4) | | 10 | | 2,937 | | 90.59 | | 109.60 | | -17.3% | | 92.70 | | 110.55 | | -16.1% | |
Marriott (no. 1) | | 53 | | 7,610 | | 102.43 | | 118.72 | | -13.7% | | 107.18 | | 122.82 | | -12.7% | |
Marriott (no. 2) | | 18 | | 2,178 | | 102.06 | | 118.64 | | -14.0% | | 104.64 | | 120.36 | | -13.1% | |
Marriott (no. 3) | | 34 | | 5,020 | | 95.70 | | 107.84 | | -11.3% | | 99.24 | | 109.90 | | -9.7% | |
Marriott (no. 4) | | 19 | | 2,756 | | 98.79 | | 114.80 | | -13.9% | | 102.62 | | 118.43 | | -13.3% | |
Marriott (no. 5) | | 1 | | 356 | | 193.18 | | 209.62 | | -7.8% | | 201.31 | | 225.77 | | -10.8% | |
Hyatt | | 22 | | 2,724 | | 83.23 | | 97.81 | | -14.9% | | 89.14 | | 102.69 | | -13.2% | |
Carlson | | 11 | | 2,096 | | 80.08 | | 95.81 | | -16.4% | | 86.22 | | 103.16 | | -16.4% | |
Total | | 289 | | 42,880 | | $ | 91.05 | | $ | 106.20 | | -14.3% | | $ | 94.91 | | $ | 108.89 | | -12.8% | |
| | | | | | | | | | | | | | | | | |
OCCUPANCY | | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 3,844 | | 68.4% | | 66.6% | | 1.8 pt | | 69.8% | | 73.7% | | -3.9 pt | |
InterContinental (no. 2) | | 76 | | 9,220 | | 60.9% | | 63.5% | | -2.6 pt | | 63.2% | | 71.3% | | -8.1 pt | |
InterContinental (no. 3) | | 14 | | 4,139 | | 69.5% | | 68.1% | | 1.4 pt | | 71.7% | | 74.9% | | -3.2 pt | |
InterContinental (no. 4) | | 10 | | 2,937 | | 60.8% | | 61.3% | | -0.5 pt | | 62.5% | | 68.8% | | -6.3 pt | |
Marriott (no. 1) | | 53 | | 7,610 | | 58.3% | | 60.0% | | -1.7 pt | | 59.2% | | 65.8% | | -6.6 pt | |
Marriott (no. 2) | | 18 | | 2,178 | | 68.1% | | 70.2% | | -2.1 pt | | 69.5% | | 72.8% | | -3.3 pt | |
Marriott (no. 3) | | 34 | | 5,020 | | 58.0% | | 64.1% | | -6.1 pt | | 62.1% | | 70.7% | | -8.6 pt | |
Marriott (no. 4) | | 19 | | 2,756 | | 62.0% | | 66.1% | | -4.1 pt | | 62.9% | | 70.1% | | -7.2 pt | |
Marriott (no. 5) | | 1 | | 356 | | 64.2% | | 68.4% | | -4.2 pt | | 63.5% | | 78.5% | | -15.0 pt | |
Hyatt | | 22 | | 2,724 | | 68.3% | | 64.3% | | 4.0 pt | | 67.9% | | 68.2% | | -0.3 pt | |
Carlson | | 11 | | 2,096 | | 54.1% | | 56.8% | | -2.7 pt | | 57.0% | | 65.0% | | -8.0 pt | |
Total | | 289 | | 42,880 | | 62.0% | | 63.7% | | -1.7 pt | | 64.0% | | 70.2% | | -6.2 pt | |
| | | | | | | | | | | | | | | | | |
RevPAR | | | | | | | | | | | | | | | | | |
InterContinental (no. 1) | | 31 | | 3,844 | | $ | 65.00 | | $ | 72.21 | | -10.0% | | $ | 70.60 | | $ | 83.58 | | -15.5% | |
InterContinental (no. 2) | | 76 | | 9,220 | | 35.64 | | 44.91 | | -20.6% | | 39.53 | | 51.12 | | -22.7% | |
InterContinental (no. 3) | | 14 | | 4,139 | | 78.45 | | 89.77 | | -12.6% | | 86.43 | | 106.64 | | -19.0% | |
InterContinental (no. 4) | | 10 | | 2,937 | | 55.08 | | 67.18 | | -18.0% | | 57.94 | | 76.06 | | -23.8% | |
Marriott (no. 1) | | 53 | | 7,610 | | 59.72 | | 71.23 | | -16.2% | | 63.45 | | 80.82 | | -21.5% | |
Marriott (no. 2) | | 18 | | 2,178 | | 69.50 | | 83.29 | | -16.6% | | 72.72 | | 87.62 | | -17.0% | |
Marriott (no. 3) | | 34 | | 5,020 | | 55.51 | | 69.13 | | -19.7% | | 61.63 | | 77.70 | | -20.7% | |
Marriott (no. 4) | | 19 | | 2,756 | | 61.25 | | 75.88 | | -19.3% | | 64.55 | | 83.02 | | -22.2% | |
Marriott (no. 5) | | 1 | | 356 | | 124.02 | | 143.38 | | -13.5% | | 127.83 | | 177.23 | | -27.9% | |
Hyatt | | 22 | | 2,724 | | 56.85 | | 62.89 | | -9.6% | | 60.53 | | 70.03 | | -13.6% | |
Carlson | | 11 | | 2,096 | | 43.32 | | 54.42 | | -20.4% | | 49.15 | | 67.05 | | -26.7% | |
Total | | 289 | | 42,880 | | $ | 56.45 | | $ | 67.65 | | -16.6% | | $ | 60.74 | | $ | 76.44 | | -20.5% | |
(1) Includes data for the calendar periods indicated, except for our Marriott® branded hotels, which include data for comparable fiscal periods.
“ADR” is average daily rate; “RevPAR” is revenue per available room. All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers’ and tenants’ operating data.
29
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
COVERAGE BY OPERATING AGREEMENT (1) |
| | For the Twelve Months Ended (2) | |
Operating Agreement | | 12/31/2009 | | 9/30/2009 | | 6/30/2009 | | 3/31/2009 | | 12/31/2008 | |
InterContinental (no. 1) | | 0.75x | | 0.82x | | 0.93x | | 1.03x | | 1.13x | |
InterContinental (no. 2) | | 0.72x | | 0.88x | | 1.08x | | 1.25x | | 1.38x | |
InterContinental (no. 3) | | 0.68x | | 0.80x | | 0.92x | | 1.08x | | 1.23x | |
InterContinental (no. 4) | | 0.40x | | 0.51x | | 0.67x | | 0.82x | | 1.02x | |
Marriott (no. 1) | | 0.88x | | 1.02x | | 1.17x | | 1.34x | | 1.47x | |
Marriott (no. 2) | | 0.72x | | 0.84x | | 0.96x | | 1.05x | | 1.13x | |
Marriott (no. 3) | | 0.69x | | 0.82x | | 0.94x | | 1.09x | | 1.17x | |
Marriott (no. 4) | | 0.68x | | 0.81x | | 0.90x | | 1.04x | | 1.15x | |
Marriott (no. 5) | | -0.07x | | -0.02x | | 0.16x | | 0.23x | | 0.37x | |
Hyatt | | 0.72x | | 0.80x | | 0.88x | | 0.98x | | 1.07x | |
Carlson | | 0.66x | | 0.81x | | 0.97x | | 1.20x | | 1.42x | |
TA (no. 1) (3) | | 1.12x | | 1.30x | | 1.42x | | 1.48x | | 1.43x | |
TA (no. 2) (3) | | 1.05x | | 1.29x | | 1.50x | | 1.57x | | 1.51x | |
| | For the Three Months Ended (2) | |
Operating Agreement | | 12/31/2009 | | 9/30/2009 | | 6/30/2009 | | 3/31/2009 | | 12/31/2008 | |
InterContinental (no. 1) | | 0.62x | | 0.82x | | 0.92x | | 0.66x | | 0.87x | |
InterContinental (no. 2) | | 0.48x | | 0.75x | | 0.87x | | 0.80x | | 1.08x | |
InterContinental (no. 3) | | 0.39x | | 0.69x | | 0.97x | | 0.69x | | 0.86x | |
InterContinental (no. 4) | | 0.32x | | 0.31x | | 0.58x | | 0.41x | | 0.74x | |
Marriott (no. 1) | | 0.76x | | 0.93x | | 1.01x | | 0.84x | | 1.23x | |
Marriott (no. 2) | | 0.66x | | 0.86x | | 0.84x | | 0.54x | | 1.06x | |
Marriott (no. 3) | | 0.54x | | 0.76x | | 0.86x | | 0.65x | | 0.96x | |
Marriott (no. 4) | | 0.62x | | 0.54x | | 0.71x | | 0.88x | | 1.03x | |
Marriott (no. 5) | | -0.19x | | -0.27x | | 0.08x | | 0.16x | | -0.01x | |
Hyatt | | 0.55x | | 0.82x | | 0.78x | | 0.74x | | 0.87x | |
Carlson | | 0.50x | | 0.77x | | 0.59x | | 0.77x | | 1.11x | |
TA (no. 1) (3) | | 0.85x | | 1.33x | | 1.17x | | 1.12x | | 1.59x | |
TA (no. 2) (3) | | 0.71x | | 1.07x | | 1.22x | | 1.19x | | 1.69x | |
(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) Effective July 1, 2008, we entered a rent deferral arrangement with TA which provides TA the option to defer payments of up to $5 million per month of rent under the two leases for the period July 1, 2008 until December 31, 2010. For each of the quarters ended December 31, 2008, March 31, 2009, June 30, 2009, September 30, 2009 and December 31, 2009, TA deferred $15 million in rents. TA rent coverage ratios have been calculated based upon the contractual rent amounts and do not reflect the impact of any rent deferral.
All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers’ or tenants’ operating data.
30
Hospitality Properties Trust
Supplemental Operating and Financial Data
December 31, 2009
OPERATING AGREEMENT EXPIRATION SCHEDULE |
(dollars in thousands)
| | Annualized Minimum
Return / Rent | | % of Annualized
Minimum Return /
Rent | | Cumulative % of
Annualized Minimum
Return / Rent | |
2009 | | $ | - | | - | | - | |
2010 | | 21,426 | (1) | 3.7% | | 3.7% | |
2011 | | - | | - | | - | |
2012 | | 59,405 | | 10.2% | | 13.9% | |
2013 | | - | | - | | 13.9% | |
2014 | | - | | - | | 13.9% | |
2015 | | 28,509 | (2) | 4.9% | | 18.8% | |
2016 | | - | | - | | 18.8% | |
2017 | | - | | - | | 18.8% | |
2018 and thereafter | | 474,392 | (2) | 81.2% | | 100.0% | |
Total | | $ | 583,732 | | 100.0% | | | |
| | | | | | | |
Weighted average remaining term | | 13.5 years | | | | | |
(1) In November 2008, we were notified that the tenant will not exercise its renewal option at the end of the current lease term. Upon expiration of the agreement, we expect to lease the hotels to one of our taxable REIT subsidiaries; the hotel brand and management agreement with Marriott currently are not expected to change.
(2) During the twelve months ended December 31, 2009, payments we have received under our lease to Crestline which expires in 2015 ($28.5 million/year) and under our management contract to Marriott which expires in 2019 ($44,200/year) have been less than the minimum amounts due to us by $9,218 and $8,595, respectively. The deficiencies in minimum payments due have reduced the security deposits that we hold from Crestline and from Marriott for these contracts. Other than applying the security deposits to cover the deficiencies in minimum amounts due to us, we have not yet determined what additional action, if any, we may take as a result of these defaults.
31
