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NEWTON, Mass.--Hospitality Properties Trust (NYSE: HPT) today announced its
results of operations for the quarter ended March 31, 2008.
Results for the quarter ended March 31, 2008:
Net income available for common shareholders was $48.3 million, or
$0.51 per share, for the quarter ended March 31, 2008, compared to
$39.0 million, or $0.43 per share, for the same quarter last year. Net
income available for common shareholders for the quarter ended March
31, 2007, included $2.7 million, or $0.03 per share, of costs
associated with the spin off of TravelCenters of America LLC (AMEX:
TA) to HPT's shareholders on January 31, 2007.
Funds from operations (FFO) for the quarter ended March 31, 2008,
were $110.9 million, or $1.18 per share. This compares to FFO for the
quarter ended March 31, 2007, of $98.5 million, or $1.08 per share.
The weighted average number of common shares outstanding totaled
93.9 million and 90.8 million for the quarters ended March 31, 2008
and 2007, respectively.
Hotel Portfolio Performance:
For the quarter ended March 31, 2008 compared to the same quarter
last year, hotels owned by HPT produced revenue per available room, or
RevPAR, average daily rate, or ADR, and occupancy as follows:
Quarter Ended March 31,
------------------------
2008 2007 Change
------- ------- --------
RevPAR $76.53 $74.78 2.3 %
ADR 112.21 108.22 3.7 %
Occupancy 68.2 % 69.1 % -0.9 pt
Portfolio Activities:
Effective January 1, 2008, HPT entered into a new lease for its
Marriott Kauai Resort Beach Club hotel with a subsidiary of Marriott
International Inc., or Marriott. This hotel was previously part of a
35 hotel portfolio leased to an HPT taxable REIT subsidiary and
managed by Marriott, but it will now be subject to a separate lease
which is guaranteed by Marriott. The rent payable to HPT under the
lease is $5.5 million per annum subject to annual adjustment based
upon changes in the Consumer Price Index. The lease agreement expires
December 31, 2019, and Marriott has four renewal options of 15 years
each. Pursuant to the lease agreement, HPT agreed to fund certain
planned improvements to the hotel. The annual minimum rent payable to
HPT under the lease will increase as improvements are funded.
On March 17, 2008, HPT acquired the land and certain improvements
at its Petro travel center located in Sparks, Nevada for $42.5
million. HPT simultaneously leased them to TA and rent under its lease
with TA for 40 Petro travel centers was increased by $3.9 million per
annum. HPT funded the acquisition with cash on hand and borrowings
under its revolving credit facility.
Financing Activities:
On March 3, 2008, HPT redeemed $150 million of its 7% senior notes
using borrowings under its revolving credit facility.
Common Dividend:
On April 1, 2008, HPT announced a regular quarterly common
dividend of $0.77 per share payable to shareholders of record on April
15, 2008; this dividend will be paid on or about May 15, 2008.
Conference Call:
On Tuesday, May 6, 2008, at 1:00 p.m. Eastern Time, John Murray,
President and Chief Operating Officer, and Mark Kleifges, Treasurer
and Chief Financial Officer, will host a conference call to discuss
the results for the quarter ended March 31, 2008.
The conference call telephone number is (866) 550-6338.
Participants calling from outside the United States and Canada should
dial (347) 284-6930. No pass code is necessary to access the call from
either number. Participants should dial in about 15 minutes prior to
the scheduled start of the call. A replay of the conference call will
be available through Tuesday, May 13, 2008. To hear the replay, dial
(719) 457-0820. The replay pass code is 4895300.
A live audio webcast of the conference call will also be available
in a listen only mode on the company's web site, which is located at
www.hptreit.com. Participants wanting to access the webcast should
visit the company's web site about five minutes before the call. The
archived webcast will be available for replay on HPT's web site for
about one week after the call.
Supplemental Data:
A copy of HPT's First Quarter 2008 Supplemental Operating and
Financial Data is available for download at HPT's web site,
www.hptreit.com.
Hospitality Properties Trust is a real estate investment trust, or
REIT, which owns 291 hotels and 185 travel centers located in 44
states, Puerto Rico and Canada. HPT is headquartered in Newton,
Massachusetts.
A Maryland Real Estate Investment Trust with transferable shares
of beneficial interest listed on the New York Stock Exchange.
No shareholder, Trustee or officer is personally liable for any
act or obligation of the Trust.
Hospitality Properties Trust
CONSOLIDATED STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
(in thousands, except per share data)
(Unaudited)
Quarter Ended March
31,
-------------------
2008 2007
--------- ---------
Revenues:
Hotel operating revenues (1) $222,440 $224,471
Rental income (1) 89,956 57,610
FF&E reserve income (2) 6,183 5,439
Interest income 600 3,148
--------- ---------
Total revenues 319,179 290,668
--------- ---------
Expenses:
Hotel operating expenses (1) 156,376 160,398
Interest (including amortization of deferred
financing costs of $1,040 and $739,
respectively) 37,569 30,655
Depreciation and amortization 58,251 48,318
General and administrative 11,444 7,793
TA spin off costs (3) -- 2,711
--------- ---------
Total expenses 263,640 249,875
--------- ---------
Income before gain on sale of real estate and
income taxes 55,539 40,793
Gain on sale of real estate (4) 645 --
--------- ---------
Income before income taxes 56,184 40,793
Income tax expense (428) (479)
--------- ---------
Income from continuing operations 55,756 40,314
Income from discontinued operations (5) -- 3,058
Net income 55,756 43,272
Preferred distributions (7,470) (4,359)
--------- ---------
Net income available for common shareholders $48,286 $39,013
========= =========
----------------------------------------------------------------------
Calculation of FFO (6):
Net income available for common shareholders $48,286 $39,013
Add: FF&E deposits not in net income (discontinued
operations) (2) -- 498
Depreciation and amortization (continuing
operations) 58,251 48,318
Depreciation and amortization (discontinued
operations) (5) -- 753
Deferred percentage rent (continuing
operations) (7) 1,552 1,485
Deferred percentage rent (discontinued
operations) (5)(7) -- 185
Deferred additional returns (continuing
operations) (8) 3,460 5,499
TA spin off costs (continuing operations) (3) -- 2,711
Less: Gain on sale of real estate (continuing
operations) (4) (645) --
--------- ---------
Funds from operations ("FFO") $110,904 $98,462
========= =========
Weighted average common shares outstanding 93,893 90,760
========= =========
Per common share amounts:
Income from continuing operations available
for common shareholders $0.51 $0.40
Income from discontinued operations available
for common shareholders $0.00 $0.03
Net income available for common shareholders $0.51 $0.43
FFO (6) $1.18 $1.08
Common distributions declared $0.77 $0.76
(1) At March 31, 2008, each of our 291 hotels are included in one
of eleven operating agreements of which 199 are leased to our taxable
REIT subsidiaries and managed by independent hotel operating companies
and 92 are leased to third parties. Our 185 travel centers are leased
under two agreements. Our consolidated statement of income includes
hotel operating revenues and expenses of managed hotels and rental
income from our leased hotels and travel centers.
(2) Various percentages of total sales at most of our hotels are
escrowed as reserves for future renovations or refurbishment, or FF&E
Reserve escrows. At March 31, 2008, we own all the FF&E escrows for
our hotels. Through July 26, 2007, we had a security and remainder
interest in the FF&E Reserve escrows for our former Homestead Studio
Suites hotels (see Note 5). When we own the FF&E Reserve escrows at
hotels leased to third parties we report payments into the escrow as
additional rent. When we had a security and remainder interest in the
FF&E Reserve escrows of our Homestead Studio Suites hotels, deposits
were not included in revenue. We do not report the amounts which are
escrowed as FF&E reserves for our managed hotels as FF&E reserve
income in our consolidated statement of income.
(3) During the first quarter of 2007, we expensed $2,711 of costs
in connection with the spin off of our former subsidiary,
TravelCenters of America LLC, or TA, to our shareholders on January
31, 2007.
(4) On February 5, 2008, we sold our Park Plaza hotel in North
Phoenix, Arizona for $8,000 and recognized a gain on sale of $645.
(5) Income from discontinued operations relates to the 18
Homestead Studio Suites hotels that we sold in July 2007. We have
reclassified our consolidated statement of income for all periods
presented to show the results of operations of the hotels which have
been sold as discontinued.
(6) We compute FFO as shown. Our calculation of FFO differs from
the National Association of Real Estate Investment Trusts, or NAREIT,
definition because we include FF&E deposits not included in net income
(see Note 2), deferred percentage rent (see Note 7) and deferred
additional returns (see Note 8) and exclude TA spin off costs (see
Note 3). We consider FFO to be an appropriate measure of performance
for a REIT, along with net income and cash flows 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, it may
facilitate comparison of 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 among the important factors
considered by our board of trustees when 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.
(7) In calculating net income we recognize percentage rental
income received for the first, second and third quarters in the fourth
quarter, which is when all contingencies are met and the income is
earned. Although we defer recognition of this revenue until the fourth
quarter for purposes of calculating net income, we include the amount
in the calculation of FFO for each quarter of the year. The fourth
quarter FFO calculation excludes the amounts recognized during the
first three quarters.
(8) Our share of the operating results of our managed hotels in
excess of the minimum returns due to us, or additional returns, are
generally determined based upon annual calculations. In calculating
net income, we recognize additional returns in the fourth quarter,
which is when all contingencies are met and the income is earned.
Although we defer recognition of this income until the fourth quarter
for purposes of calculating net income, we include the amount in the
calculation of FFO for each quarter of the year. The fourth quarter
FFO calculation excludes the amounts recognized during the first three
quarters.
Hospitality Properties Trust
CONSOLIDATED BALANCE SHEET
(dollars in thousands, except share data)
March 31, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
--------------------------------------------
Real estate properties, at cost:
Land $ 1,392,359 $ 1,377,520
Buildings, improvements and equipment 4,872,496 4,818,711
------------ ------------
6,264,855 6,196,231
Accumulated depreciation (899,067) (849,470)
------------ ------------
5,365,788 5,346,761
Cash and cash equivalents 29,487 23,401
Restricted cash (FF&E reserve escrow) 45,469 28,134
Other assets, net 270,973 281,011
------------ ------------
$ 5,711,717 $ 5,679,307
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------------
Revolving credit facility $ 396,000 $ 158,000
Senior notes, net of discounts 1,693,003 1,842,756
Convertible senior notes 575,000 575,000
Mortgage payable 3,616 3,635
Security deposits 169,406 169,406
Accounts payable and other liabilities 101,285 134,705
Due to affiliate 6,233 4,617
Dividends payable 4,754 4,754
------------ ------------
Total liabilities 2,949,297 2,892,873
------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial interest;
no par value; 100,000,000 shares
authorized:
Series B preferred shares; 8 7/8%
cumulative redeemable; 3,450,000
shares issued and outstanding,
aggregate liquidation preference
$86,250
83,306 83,306
Series C preferred shares; 7%
cumulative redeemable; 12,700,000
shares issued and outstanding,
aggregate liquidation preference
$317,500
306,833 306,833
Common shares of beneficial interest;
$0.01 par value; 150,000,000 shares
authorized; 93,892,719 shares issued and
outstanding 939 939
Additional paid-in capital 3,048,881 3,048,881
Cumulative net income 1,766,833 1,711,079
Cumulative preferred distributions (101,231) (93,761)
Cumulative common distributions (2,343,141) (2,270,843)
------------ ------------
Total shareholders' equity 2,762,420 2,786,434
------------ ------------
$ 5,711,717 $ 5,679,307
============ ============
Hospitality Properties Trust Timothy A. Bonang, 617-796-8232
Manager of Investor Relations, or Carlynn Finn, 617-796-8232
Investor Relations Analyst www.hptreit.com
© Business Wire , 2010 - 05/06/2008 07:25 AM
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