Hospitality Properties Trust (NYSE: HPT) today announced its
operating results for the quarter and twelve months ended December 31,
2008.
Results for the quarter and twelve months ended December 31, 2008:
HPT’s net income available for common shareholders for the three and
twelve month periods ended December 31, 2008 compared to the same
periods in 2007 were as follows:
During the quarter ended December 31, 2008, TravelCenters of America
LLC (NYSE Alternext: TA), or TA, exercised in full its option to defer
up to $5 million of rent per month under the previously announced rent
deferral agreement, which resulted in a $15 million, or $0.16 per share,
reduction in net income available for common shareholders. The results
for the quarter ended December 31, 2008 also reflect the non-accrual of
$3.5 million, or $0.04 per share, of straight line rent under HPT’s
lease with TA for 145 travel centers.
Net income available for common shareholders for the twelve months
ended December 31, 2007 includes a $95.7 million, or $1.03 per share,
gain from the sale of real estate and $2.7 million, or $0.03 per share,
of costs associated with the spin off of TA to HPT’s shareholders on
January 31, 2007.
The results for the twelve months ended December 31, 2008 include:
(i) the deferral of $30 million, or $0.32 per share, of rent originally
payable from July through December, 2008 by TA under the rent deferral
agreement; (ii) a non-cash impairment charge of $53.2 million, or $0.57
per share, related to the write down of certain intangible assets
arising from HPT’s January 2007 acquisition of TravelCenters of America,
Inc. to their estimated fair market value; (iii) a non-cash charge of
$19.6 million, or $0.21 per share, to record a reserve for the straight
line rent receivable recorded in periods prior to April 1, 2008; and
(iv) the non-accrual of $10.5 million, or $0.11 per share, of straight
line rent for the period April 1, 2008 through December 31, 2008,
related to HPT’s lease with TA for 145 travel centers.
HPT’s funds from operations, or FFO, for the three and twelve month
periods ended December 31, 2008 compared to the same periods in 2007
were as follows:
FFO for the quarter ended December 31, 2008 was affected by TA’s
deferral of rent and the non-accrual of straight line rent discussed
above.
FFO for the twelve months ended December 31, 2008 was affected by
TA’s deferral of rent, the non-cash charge to record a reserve for
straight line rent and the non-accrual of straight line rent discussed
above.
See page 4 for a reconciliation of FFO to net income available to common shareholders.
Hotel Portfolio Performance:
For the quarter and twelve months ended December 31, 2008 compared to
the same periods last year, hotels owned by HPT produced revenue per
available room, or RevPAR, average daily rate, or ADR, and occupancy as
follows:
Common Dividend:
On January 9, 2009, HPT announced a regular quarterly common dividend
of $0.77 per share payable to shareholders of record on January 21,
2009; this dividend was paid on February 25, 2009.
Conference Call:
On Tuesday, March 3, 2009, at 11:00 a.m. Eastern Time, John Murray,
President and Chief Operating Officer, and Mark Kleifges, Chief
Financial Officer, will host a conference call to discuss the results
for the quarter and twelve months ended December 31, 2008.
The conference call telephone number is (888) 765-5559. Participants
calling from outside the United States and Canada should dial (913)
312-1414. 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, March 10, 2009. To hear the replay, dial
(719) 457-0820. The replay pass code is 3024964.
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 Fourth 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 289 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.
See Notes on page 5
(1) At December 31, 2008, each of our 289 hotels are included in one
of eleven operating agreements of which 197 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) During the three and twelve months ended December 31, 2008,
TravelCenters of America LLC, or TA, elected to defer $15,000, or $0.16
per share, and $30,000, or $0.32 per share, respectively, of rent under
the previously announced rent deferral agreement. We have not recognized
the deferred rent as revenue due to uncertainties regarding its payment
by TA in the future.
(3) In calculating net income we recognize percentage rental income
received for the first, second and third quarters in the fourth quarter,
which is when all contingencies are met and the income is earned.
Although we defer recognition of this revenue until the fourth quarter
for purposes of calculating net income, we include these amounts in the
calculation of FFO for each quarter of the year. The fourth quarter FFO
calculation excludes the amounts recognized during the first three
quarters. Percentage rent included in FFO were $717 and $1,307 in the
fourth quarter of 2008 and 2007, respectively.
(4) Various percentages of total sales at most of our hotels are
escrowed as reserves for future renovations or refurbishment, or
FF&E Reserve escrows. At December 31, 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 9). 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.
(5) During the first quarter of 2007, we expensed $2,711 of costs in
connection with the spin off of our former subsidiary, TA, to our
shareholders on January 31, 2007.
(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 fourth quarter of 2007, we recorded a $1,332, or $0.01
per share, non-cash loss on asset impairment in connection with our
decision to pursue the sale of our AmeriSuites hotel in Atlantic Beach,
North Carolina. 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) During the first quarter of 2008, we sold our Park Plaza hotel in
North Phoenix, Arizona for $8,000 and recognized a gain on sale of
$645. During the second quarter of 2008, we sold our AmeriSuites hotel
in Atlantic Beach, North Carolina for $6,350 and recognized a gain on
sale of $629. During the fourth quarter of 2008, we sold our AmeriSuites
hotel in Tampa, Florida for $2,500 and recognized a loss on sale of
$1,160.
(9) 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 these hotels which have been sold as
discontinued.
(10) 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 (loss) (see Note 4), deferred percentage rent (see Note 3) and
deferred additional returns (see Note 11) and exclude loss on asset
impairment (see Note 7) and TA spin off costs (see Note 5). 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 generally accepted accounting
principles, or GAAP, and should not be considered an alternative to net
income or cash flow from operating activities as a measure of financial
performance or liquidity. FFO is 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.
(11) 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 these 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.
Additional returns included in FFO were ($1,958) and $3,665 in the
fourth quarter of 2008 and 2007, respectively.
Hospitality Properties Trust
Timothy A. Bonang
Director of Investor Relations
or
Carlynn Finn
Manager of Investor Relations
617-796-8232
www.hptreit.com
© Business Wire , 2009 - 03/02/2009 04:28 PM