Fourth Quarter Comparable Hotel RevPAR Growth of 6.2% Year Over
Year
NEWTON, Mass.--(BUSINESS WIRE)--
Hospitality Properties Trust (NYSE: HPT) today announced its financial
results for the quarter and year ended December 31, 2015, compared to
the results for the prior year comparable periods:
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Three Months Ended December 31,
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Year Ended December 31,
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2015
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2014
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2015
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2014
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($ in thousands, except per share and RevPAR
data)
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Net income (loss) available for common shareholders (1)
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$
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(24,660)
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$
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51,357
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$
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145,754
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$
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176,521
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Net income (loss) available for common shareholders per share (basic
and diluted) (1)
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$
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(0.16)
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$
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0.34
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$
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0.97
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$
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1.18
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Adjusted EBITDA (2)
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$
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123,729
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$
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164,247
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$
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674,896
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$
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661,802
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Normalized FFO available for common shareholders (2) (3)
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$
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81,083
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$
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121,458
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$
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503,663
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$
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493,363
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Normalized FFO available for common shareholders per share (diluted)
(2) (3)
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$
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0.54
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$
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0.81
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$
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3.34
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$
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3.29
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Portfolio Performance
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Comparable hotel RevPAR
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$
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85.24
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$
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80.23
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$
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91.69
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$
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84.39
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Comparable hotel RevPAR growth
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6.2%
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—
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8.7%
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—
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RevPAR (all hotels)
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$
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84.28
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$
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79.98
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$
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91.42
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$
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84.54
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RevPAR growth (all hotels)
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5.4%
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—
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8.1%
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Coverage of HPT’s minimum returns and rents for hotels
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0.92x
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0.83x
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1.07x
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0.94x
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(1)
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Net income (loss) for the quarter and year ended December 31, 2015
each includes a $36.8 million, or $0.24 per share, non-cash loss on
the distribution of The RMR Group Inc. (NASDAQ: RMR) common stock to
HPT’s shareholders, and a $44.9 million, or $0.30 per share, and a
$62.3 million, or $0.41 per share, respectively, incentive
management fee.
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(2)
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Reconciliations of net income (loss) available for common
shareholders determined in accordance with U.S. generally accepted
accounting principles, or GAAP, to funds from operations, or FFO,
and Normalized FFO available for common shareholders, and net income
to earnings before interest, taxes, depreciation and amortization,
or EBITDA, and EBITDA as adjusted, or Adjusted EBITDA, for the
quarter and years ended December 31, 2015 and 2014 appear later in
this press release.
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(3)
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Normalized FFO available for the quarter ended December 31, 2015
includes a $62.3 million, or $0.41 per share, incentive management
fee expense recognized in the quarter ended December 31, 2015.
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John Murray, President and Chief Operating Officer of HPT, made the
following statement regarding today’s announcement:
“We are pleased with the continued strong performance from our hotel and
travel center portfolios this quarter. Our comparable hotel RevPAR
growth of 6.2% exceeded the hotel industry’s performance for the twelfth
consecutive quarter and reflected the benefits of our renovation
program. HPT’s total shareholder returns during the two year period
ended December 31, 2015 exceeded the total shareholder returns of the
SNL REIT Hotel Index, resulting in $62.3 million of incentive management
fee expense for 2015 under our business management agreement with RMR.
Excluding this incentive management fee expense, HPT would have reported
Normalized FFO per share growth of 17.3% and Adjusted EBITDA growth of
13.2% for the quarter.”
Results for the Three Months and Year Ended December 31, 2015 and
Recent Activities:
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Net Income (Loss) Available for Common Shareholders: Net loss
available for common shareholders for the quarter ended December 31,
2015 was $(24.7) million, or $(0.16) per diluted share, compared to
net income available for common shareholders of $51.4 million, or
$0.34 per diluted share, for the quarter ended December 31, 2014. Net
loss available for common shareholders for the quarter ended December
31, 2015 includes $44.9 million, or $0.30 per share, of incentive
management fee expense and a $36.8 million, or $0.24 per share,
non-cash loss on the distribution of RMR common stock to HPT’s
shareholders. The weighted average number of diluted common shares
outstanding was 151.4 million for the quarter ended December 31, 2015
and 149.8 million for the quarter ended December 31, 2014.
Net
income available for common shareholders for the year ended December
31, 2015 was $145.8 million, or $0.97 per diluted share, compared to
$176.5 million, or $1.18 per diluted share, for the year ended
December 31, 2014. Net income available for common shareholders for
the year ended December 31, 2015 includes $62.3 million, or $0.41 per
share, of incentive management fee expense, a $36.8 million, or $0.24
per share, non-cash loss on the distribution of RMR common stock to
HPT’s shareholders and an $11.0 million, or $0.07 per share, gain on
the sale of real estate. The weighted average number of diluted common
shares outstanding was 151.0 million for the year ended December 31,
2015 and 149.8 million for the year ended December 31, 2014.
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Adjusted EBITDA: Adjusted EBITDA for the quarter ended December
31, 2015 was $123.7 million compared to $164.2 million during the same
period last year. Excluding the impact of the $62.3 million of
incentive management fee expense, Adjusted EBITDA for the quarter
ended December 31, 2015 compared to the same period in 2014 increased
13.2% to $186.0 million.
Adjusted EBITDA for the year ended
December 31, 2015 was $674.9 million compared to $661.8 million during
the same period last year. Excluding the impact of the $62.3 million
incentive management fee expense, Adjusted EBITDA for the year ended
December 31, 2015 compared to the same period in 2014 increased 11.4%
to $737.2 million.
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Normalized FFO available for common shareholders: Normalized
FFO available for common shareholders for the quarter ended December
31, 2015 were $81.1 million, or $0.54 per diluted share, compared to
Normalized FFO available for common shareholders for the quarter ended
December 31, 2014 of $121.5 million, or $0.81 per diluted share. The
decrease in Normalized FFO available for common shareholders per
diluted share is due primarily to the impact of the $62.3 million, or
$0.41 per share, of incentive management fee expense recognized in the
quarter ended December 31, 2015, partially offset by the impact of
HPT’s hotel and travel center acquisitions since October 1, 2014 and
the increase in returns realized due to the improved operating results
at certain of HPT’s hotels.
Excluding the impact of the
$62.3 million of incentive management fee expense, Normalized FFO
available for common shareholders for the quarter ended December 31,
2015 compared to the same period in 2014 increased 18.0% to $143.3
million, or $0.95 per diluted share.
Normalized FFO
available for common shareholders for the year ended December 31, 2015
were $503.7 million, or $3.34 per diluted share, compared to
Normalized FFO available for common shareholders for the year ended
December 31, 2014 of $493.4 million, or $3.29 per diluted share. The
increase in Normalized FFO available for common shareholders per
diluted share is due primarily to the impact of HPT’s hotel and travel
center acquisitions since January 1, 2014 and the increase in returns
realized due to the improved operating results at certain of HPT’s
hotels, partially offset by the impact of the $62.3 million, or $0.41
per share, of incentive management fee expense recognized in the
quarter ended December 31, 2015.
Excluding the impact of
the $62.3 million of incentive management fee expense, Normalized FFO
available for common shareholders for the year ended December 31, 2015
compared to the same period in 2014 increased 14.7% to $565.9 million,
or $3.75 per diluted share.
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Comparable Hotel RevPAR: For the quarter ended December 31,
2015 compared to the same period in 2014 for HPT’s 291 hotels that it
owned continuously since October 1, 2014: average daily rate, or ADR,
increased 4.6% to $118.88; occupancy increased 1.1 percentage points
to 71.7%; and revenue per available room, or RevPAR, increased 6.2% to
$85.24.
For the year ended December 31, 2015 compared to
the same period in 2014 for HPT’s 290 comparable hotels that it owned
continuously since January 1, 2014: ADR increased 6.8% to $120.81;
occupancy increased 1.3 percentage points to 75.9%; and RevPAR
increased 8.7% to $91.69.
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RevPAR (all hotels): For the quarter ended December 31, 2015
compared to the same period in 2014 for HPT’s 302 hotels: ADR
increased 4.5% to $118.70; occupancy increased 0.6 percentage points
to 71.0%; and RevPAR increased 5.4% to $84.28.
For the year
ended December 31, 2015 compared to the same period in 2014 for HPT’s
302 hotels: ADR increased 6.6% to $120.93; occupancy increased 1.1
percentage points to 75.6%; and RevPAR increased 8.1% to $91.42.
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Hotel Coverage of Minimum Returns and Rents: For the quarter
ended December 31, 2015, the aggregate coverage ratio of (x) total
property level revenues minus FF&E reserve escrows, if any, and all
property level expenses which are not subordinated to minimum returns
and minimum rent payments to HPT to (y) HPT’s minimum returns and
rents due from hotels increased to 0.92x from 0.83x for the three
months ended December 31, 2014.
For the year ended December
31, 2015, the aggregate coverage ratio of (x) total property level
revenues minus FF&E reserve escrows, if any, and all property level
expenses which are not subordinated to minimum returns and minimum
rent payments to HPT to (y) HPT’s minimum returns and rents due from
hotels increased to 1.07x from 0.94x for the year ended December 31,
2014.
As of December 31, 2015, approximately 68% of HPT’s
aggregate annual minimum returns and rents from its hotels were
secured by guarantees or security deposits from HPT’s managers and
tenants pursuant to the terms of HPT’s hotel operating agreements.
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Recent Property Acquisition Activities: On October 30, 2015,
HPT acquired the land and certain improvements at a travel center
located in Waterloo, NY it leased from a third party and subleased to
TravelCenters of America LLC (NYSE: TA), or TA, for $15.0 million,
excluding acquisition related costs. These assets were added to HPT’s
lease with TA and TA is now directly leasing these assets from HPT
with rent for these assets now directly paid to HPT.
On
January 6, 2016, HPT agreed to acquire a full service hotel with 221
rooms located in Portland, Oregon for a purchase price of $114.0
million, excluding closing costs. HPT plans to add this hotel to its
management agreement with InterContinental Hotels Group, plc (LON:
IHG; NYSE: IHG (ADRs)), or InterContinental.
On February 1,
2016, HPT acquired two extended stay hotels with 262 suites located in
Cleveland, OH and Westlake, OH for an aggregate purchase price of
$12.0 million, excluding closing costs. HPT converted these hotels to
the Sonesta ES Suites® hotel brand and added them to its
management agreement with Sonesta International Hotels Corporation, or
Sonesta.
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Recent Financing Activities: On December 9, 2015, HPT amended
the agreement governing its revolving credit and term loan facilities.
Pursuant to the amendment, the maximum amount of borrowings available
under HPT’s revolving credit facility increased from $750.0 million to
$1.0 billion.
On February 3, 2016, HPT issued $750.0
million aggregate principal amount of unsecured senior notes in
underwritten public offerings, which included: $400.0 million
aggregate principal amount of 4.25% unsecured senior notes due 2021
and $350.0 million aggregate principal amount of 5.25% unsecured
senior notes due 2026. Net proceeds from these offerings ($732.3
million after original issue discounts and offering expenses) were
used to repay amounts outstanding under HPT’s revolving credit
facility and for general business purposes.
On February 10,
2016, HPT gave notice that it would redeem at par plus accrued
interest all $275.0 million of its 6.30% senior notes due 2016. HPT
expects to complete this redemption in March 2016 using cash on hand
and borrowings under its revolving credit facility.
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Distribution of RMR Common Stock: On December 14, 2015, HPT
distributed to common shareholders 0.0166 shares of RMR common stock
for each common share of HPT held as of the close of business on
November 27, 2015. In connection with this distribution, HPT
recognized a non-cash loss of $36.8 million because the closing price
of RMR common stock was lower than HPT’s carrying amount per share on
the day RMR common stock was distributed to HPT’s shareholders. Since
the distribution date, the trading price of RMR common stock has
increased. If the trading price of RMR common stock on the
distribution date had been at the current increased price per share,
HPT would have recognized a lesser non-cash loss on the distribution.
Tenants and Managers: As of December 31, 2015, HPT had
nine operating agreements with seven hotel operating companies for 302
hotels with 45,864 rooms, which represented 66% of HPT’s total annual
minimum returns and rents.
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Marriott Agreements: During the three months ended December 31,
2015, 122 hotels owned by HPT were operated by subsidiaries of
Marriott International, Inc. (NASDAQ: MAR), or Marriott, under three
agreements. HPT’s Marriott No. 1 agreement includes 53 hotels, and
provides for annual minimum return payments to HPT of up to $68.4
million as of December 31, 2015 (approximately $17.1 million per
quarter). Because there is no guarantee or security deposit for this
agreement, the minimum returns HPT receives under this agreement may
be limited to available hotel cash flow after payment of operating
expenses and funding of the FF&E reserve. During the three months
ended December 31, 2015, HPT realized returns under its Marriott No. 1
agreement of $17.1 million. HPT’s Marriott No. 234 agreement includes
68 hotels and requires annual minimum returns to HPT of $106.2 million
as of December 31, 2015 (approximately $26.6 million per quarter).
During the three months ended December 31, 2015, HPT realized returns
under its Marriott No. 234 agreement of $26.6 million. During the
three months ended December 31, 2015, HPT reduced the available
security deposit by $1.1 million to cover shortfalls in hotel cash
flows available to pay the returns due for the period. At December 31,
2015, the available security deposit from Marriott for the Marriott
No. 234 agreement which HPT held to pay future payment shortfalls was
$6.3 million and there was $30.7 million remaining under Marriott’s
guaranty for up to 90% of the minimum returns due to HPT to cover
future payment shortfalls after the available security deposit is
depleted. HPT’s Marriott No. 5 agreement includes one resort hotel in
Kauai, HI which is leased to Marriott on a full recourse basis. The
contractual rent due to HPT for this hotel for the three months ended
December 31, 2015 of $2.5 million was paid to HPT.
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InterContinental Agreement: During the three months ended
December 31, 2015, HPT realized returns and rents of $36.8 million
under its agreement with subsidiaries of InterContinental which
includes 93 hotels and requires annual minimum returns/rent to HPT of
$151.2 million as of December 31, 2015 (approximately $37.8 million
per quarter). During the three months ended December 31, 2015, HPT
replenished the available security deposit by $1.5 million from its
share of hotel cash flows in excess of the returns and rents due for
the period. At December 31, 2015, the available InterContinental
security deposit which HPT held to pay future payment shortfalls was
$47.2 million.
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Other Hotel Agreements: As of December 31, 2015, HPT’s
remaining 87 hotels are operated under five agreements: one management
agreement with Sonesta (31 hotels), requiring annual minimum returns
of $82.3 million as of December 31, 2015 (approximately $20.6 million
per quarter); one management agreement with a subsidiary of Wyndham
Worldwide Corporation (NYSE: WYN), or Wyndham (22 hotels), requiring
annual minimum returns of $28.0 million as of December 31, 2015
(approximately $7.0 million per quarter); one management agreement
with a subsidiary of Hyatt Hotels Corporation (NYSE: H), or Hyatt (22
hotels), requiring annual minimum returns of $22.0 million as of
December 31, 2015 (approximately $5.5 million per quarter); one
management agreement with a subsidiary of Carlson Hotels Worldwide, or
Carlson (11 hotels), requiring annual minimum returns of $12.9 million
as of December 31, 2015 (approximately $3.2 million per quarter); and
one lease with a subsidiary of Morgans Hotel Group Co. (NASDAQ: MHGC)
(1 hotel) requiring annual minimum rent of $7.6 million as of December
31, 2015 (approximately $1.9 million per quarter). Minimum returns and
rents due to HPT are partially guaranteed under the Wyndham, Hyatt and
Carlson agreements. There is no guarantee or security deposit for the
Sonesta agreement and the minimum returns HPT receives under that
agreement are limited to available hotel cash flow after payment of
operating expenses. The payments due to HPT under these agreements for
the three months ended December 31, 2015 were paid to HPT.
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Travel Center Agreements: As of December 31, 2015, HPT had five
leases with TA for 193 travel centers located along the U.S.
Interstate Highway system requiring aggregate annual minimum rents of
$257.7 million (approximately $64.4 million per quarter), which
represent 34% of HPT’s total annual minimum returns and rents. As of
December 31, 2015, all payments due to HPT from TA under these leases
were current.
For the three months ended September 30,
2015, the aggregate coverage ratio of (x) total cash flow at the
leased travel centers available to pay HPT’s minimum rent due from TA
to (y) HPT’s minimum rent due from TA decreased to 1.75x from 1.79x
for the three months ended September 30, 2014. For the nine months
ended September 30, 2015, the aggregate coverage ratio of (x) total
cash flow at the leased travel centers available to pay HPT’s minimum
rent due from TA to (y) HPT’s minimum rent due from TA increased to
1.80x from 1.70x for the nine months ended September 30, 2014.
Coverage data for the three months and year ended December 31, 2015
for TA is currently unavailable.
Conference Call:
On Wednesday, February 24, 2016, at 10:00 a.m. Eastern Time, John
Murray, President and Chief Operating Officer, and Mark Kleifges, Chief
Financial Officer and Treasurer, will host a conference call to discuss
the results for the quarter and full year ended December 31, 2015. The
conference call telephone number is (877) 329-3720. Participants calling
from outside the United States and Canada should dial (412) 317-5434. 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 Wednesday, March 2, 2016. To hear the replay, dial (412)
317-0088. The replay pass code is 10079052.
A live audio webcast of the conference call will also be available in a
listen only mode on HPT’s website, which is located at www.hptreit.com.
Participants wanting to access the webcast should visit HPT’s website
about five minutes before the call. The archived webcast will be
available for replay on HPT’s website for about one week after the call. The
transcription, recording and retransmission in any way of HPT’s fourth
quarter conference call is strictly prohibited without the prior written
consent of HPT.
Supplemental Data:
A copy of HPT’s Fourth Quarter 2015 Supplemental Operating and Financial
Data is available for download at HPT’s website, www.hptreit.com.
HPT’s website is not incorporated as part of this press release.
Hospitality Properties Trust is a real estate investment trust, or REIT,
which owns a diverse portfolio of hotels and travel centers located in
45 states, Puerto Rico and Canada. HPT’s properties are operated under
long term management or lease agreements. HPT is managed by the
operating subsidiary of The RMR Group Inc., an alternative asset
management company that is headquartered in Newton, Massachusetts.
Please see the following pages for a more detailed statement of HPT’s
operating results and financial condition and for an explanation of
HPT’s calculation of FFO available for common shareholders and
Normalized FFO available for common shareholders, EBITDA and Adjusted
EBITDA.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER HPT USES
WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”,
“ESTIMATE” OR SIMILAR EXPRESSIONS, HPT IS MAKING FORWARD LOOKING
STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON HPT’S
PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS
ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY HPT’S FORWARD LOOKING
STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
-
HPT EXPECTS THAT MARRIOTT WILL PAY HPT UP TO 90% OF ITS MINIMUM
RETURNS INCLUDED IN HPT’S MARRIOTT NO. 234 AGREEMENT UNDER A LIMITED
GUARANTY IF AND AFTER HPT DEPLETES THE SECURITY DEPOSIT IT HOLDS FOR
ANY PAYMENT SHORTFALLS. THIS STATEMENT IMPLIES THAT MARRIOTT WILL
FULFILL ITS OBLIGATION UNDER THIS GUARANTY OR THAT ANY FUTURE
SHORTFALLS IN THE MINIMUM RETURNS DUE TO HPT FROM ITS HOTELS MANAGED
BY MARRIOTT WILL NOT EXHAUST THE GUARANTY AND SECURITY DEPOSIT HPT
HOLDS. HOWEVER, THIS GUARANTY IS LIMITED IN AMOUNT AND EXPIRES ON
DECEMBER 31, 2019, AND HPT CAN PROVIDE NO ASSURANCE WITH REGARD TO
MARRIOTT’S FUTURE ACTIONS OR THE FUTURE PERFORMANCE OF HPT’S HOTELS TO
WHICH THE MARRIOTT LIMITED GUARANTY APPLIES OR AFTER MARRIOTT’S
GUARANTY EXPIRES,
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HPT EXPECTS THAT INTERCONTINENTAL WILL CONTINUE TO PAY THE MINIMUM
RETURNS INCLUDED IN HPT’S MANAGEMENT AGREEMENT WITH INTERCONTINENTAL
AND THAT HPT WILL UTILIZE THE SECURITY DEPOSIT IT HOLDS FOR ANY
PAYMENT SHORTFALLS. HOWEVER, THE SECURITY DEPOSIT HPT HOLDS FOR
INTERCONTINENTAL’S OBLIGATIONS IS FOR A LIMITED AMOUNT AND HPT CAN
PROVIDE NO ASSURANCE THAT THE SECURITY DEPOSIT WILL BE ADEQUATE TO
COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS DUE TO HPT FROM ITS
HOTELS MANAGED BY INTERCONTINENTAL,
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AS OF DECEMBER 31, 2015, APPROXIMATELY 68% OF HPT’S AGGREGATE ANNUAL
MINIMUM RETURNS AND RENTS FOR ITS HOTELS WERE SECURED BY GUARANTEES
AND SECURITY DEPOSITS FROM HPT’S MANAGERS AND TENANTS. THIS MAY IMPLY
THAT THESE MINIMUM RETURNS AND RENTS WILL BE PAID. IN FACT, THESE
GUARANTEES AND SECURITY DEPOSITS ARE LIMITED IN AMOUNT AND DURATION
AND THE GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITY AND
WILLINGNESS TO PAY. FURTHER, THE SECURITY DEPOSITS ARE NOT SEGREGATED
FROM HPT’S OTHER ASSETS AND THE APPLICATION OF SECURITY DEPOSITS TO
COVER SHORTFALLS WILL RESULT IN HPT RECORDING INCOME, BUT WILL NOT
RESULT IN HPT RECEIVING ADDITIONAL CASH,
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HPT HAS ENTERED AN AGREEMENT TO ACQUIRE A HOTEL FOR A PURCHASE PRICE
OF $114.0 MILLION, AND HPT EXPECTS THAT IT WILL ADD THIS HOTEL TO ITS
EXISTING MANAGEMENT AGREEMENT WITH INTERCONTINENTAL. THIS TRANSACTION
IS SUBJECT TO VARIOUS TERMS AND CONDITIONS. THESE TERMS AND CONDITIONS
MAY NOT BE MET. AS A RESULT, THIS ACQUISITION AND THE EXPECTED
MANAGEMENT ARRANGEMENT MAY BE DELAYED OR MAY NOT OCCUR OR THE TERMS
MAY CHANGE,
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HPT’S REVPAR GROWTH HAS EXCEEDED THE HOTEL INDUSTRY’S PERFORMANCE FOR
TWELVE CONSECUTIVE QUARTERS. THIS STATEMENT MAY IMPLY THAT HPT’S
REVPAR WILL CONTINUE TO GROW AND EXCEED THE INDUSTRY’S PERFORMANCE.
HPT’S HOTEL BUSINESS IS SUBJECT TO VARIOUS RISKS AND FACTORS, SOME OF
WHICH ARE BEYOND HPT’S CONTROL. THERE CAN BE NO ASSURANCE THAT HPT’S
REVPAR WILL CONTINUE TO GROW, OR THAT HPT’S REVPAR RESULTS WILL
CONTINUE TO EXCEED THE INDUSTRY’S PERFORMANCE. THE REVPAR AT HPT’S
HOTELS IN THE FUTURE MAY NOT EXCEED HOTEL INDUSTRY PERFORMANCE
MEASURES AND IT MAY DECLINE,
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THIS PRESS RELEASE STATES WHAT CERTAIN RESULTS, SUCH AS NORMALIZED FFO
AVAILABLE FOR COMMON SHAREHOLDERS AND ADJUSTED EBITDA, WOULD HAVE BEEN
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2015, IF THE IMPACT OF THE
$44.9 MILLION AND $62.3 MILLION, RESPECTIVELY, INCENTIVE FEE EXPENSE
HPT RECOGNIZED UNDER ITS BUSINESS MANAGEMENT AGREEMENT WITH RMR HAD
BEEN EXCLUDED. THE BUSINESS MANAGEMENT AGREEMENT REQUIRES HPT TO PAY
AN INCENTIVE FEE TO RMR ANNUALLY IF THE CONDITIONS SPECIFIED UNDER THE
AGREEMENT ARE MET AND AT AN AMOUNT BASED ON TOTAL SHAREHOLDER RETURN
COMPARED TO THE SNL REIT HOTEL INDEX. HPT MAY BE REQUIRED TO PAY
INCENTIVE FEES UNDER ITS BUSINESS MANAGEMENT AGREEMENT IN FUTURE
PERIODS,
-
HPT INCURRED INCENTIVE FEES OF $62.3 MILLION UNDER ITS BUSINESS
MANAGEMENT AGREEMENT WITH RMR FOR 2015 DUE TO HPT’S TOTAL SHAREHOLDER
RETURNS FOR 2015 EXCEEDING THE SNL REIT HOTEL INDEX. HPT MAY NOT
REALIZE TOTAL SHAREHOLDER RETURNS IN EXCESS OF THE SNL REIT HOTEL
INDEX IN FUTURE PERIODS, HPT’S TOTAL SHAREHOLDER RETURNS MAY BE LOWER
THAN THE SNL REIT HOTEL INDEX IN FUTURE PERIODS, AND HPT COULD REALIZE
NEGATIVE TOTAL SHAREHOLDER RETURNS IN FUTURE PERIODS, AND
-
THE TRADING PRICE OF RMR COMMON STOCK HAS INCREASED SINCE THE
DISTRIBUTION OF RMR COMMON STOCK TO HPT’S SHAREHOLDERS. AN IMPLICATION
OF THIS STATEMENT MAY BE THAT THE TRADING PRICE OF RMR COMMON STOCK
WILL CONTINUE TO INCREASE OR WILL NOT DECLINE. THE MARKET VALUE OF RMR
COMMON STOCK DEPENDS ON VARIOUS FACTORS, INCLUDING SOME THAT ARE
BEYOND HPT’S CONTROL, SUCH AS MARKET CONDITIONS. THERE CAN BE NO
ASSURANCE REGARDING THE PRICE AT WHICH RMR COMMON STOCK WILL TRADE.
THE INFORMATION CONTAINED IN HPT’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”
IN HPT’S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM HPT’S FORWARD
LOOKING STATEMENTS. HPT’S FILINGS WITH THE SEC ARE AVAILABLE ON THE
SEC’S WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, HPT DOES NOT INTEND TO UPDATE OR CHANGE ANY
FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOSPITALITY PROPERTIES TRUST
CONSOLIDATED
STATEMENTS OF INCOME
(amounts in thousands, except per
share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating revenues (1)
|
|
|
$
|
390,910
|
|
|
|
$
|
362,600
|
|
|
|
$
|
1,634,654
|
|
|
|
$
|
1,474,757
|
|
|
Rental income (2) (3)
|
|
|
|
75,554
|
|
|
|
|
67,103
|
|
|
|
|
283,115
|
|
|
|
|
258,062
|
|
|
FF&E reserve income (4)
|
|
|
|
976
|
|
|
|
|
830
|
|
|
|
|
4,135
|
|
|
|
|
3,503
|
|
|
Total revenues
|
|
|
|
467,440
|
|
|
|
|
430,533
|
|
|
|
|
1,921,904
|
|
|
|
|
1,736,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses (1)
|
|
|
|
273,292
|
|
|
|
|
254,183
|
|
|
|
|
1,143,981
|
|
|
|
|
1,035,138
|
|
|
Depreciation and amortization
|
|
|
|
85,964
|
|
|
|
|
79,179
|
|
|
|
|
329,776
|
|
|
|
|
315,878
|
|
|
General and administrative (5)
|
|
|
|
56,017
|
|
|
|
|
4,468
|
|
|
|
|
109,837
|
|
|
|
|
45,897
|
|
|
Acquisition related costs (6)
|
|
|
|
389
|
|
|
|
|
2
|
|
|
|
|
2,375
|
|
|
|
|
239
|
|
|
Total expenses
|
|
|
|
415,662
|
|
|
|
|
337,832
|
|
|
|
|
1,585,969
|
|
|
|
|
1,397,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
51,778
|
|
|
|
|
92,701
|
|
|
|
|
335,935
|
|
|
|
|
339,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
|
|
2,640
|
|
|
|
|
-
|
|
|
|
|
2,640
|
|
|
|
|
-
|
|
|
Interest income
|
|
|
|
12
|
|
|
|
|
14
|
|
|
|
|
44
|
|
|
|
|
77
|
|
|
Interest expense (including amortization of deferred financing costs
and debt discounts of $1,476 and $1,458, and $5,849 and $5,491,
respectively)
|
|
|
|
(36,980
|
)
|
|
|
|
(35,385
|
)
|
|
|
|
(144,898
|
)
|
|
|
|
(139,486
|
)
|
|
Loss on distribution to common shareholders of RMR common stock (7)
|
|
|
|
(36,773
|
)
|
|
|
|
-
|
|
|
|
|
(36,773
|
)
|
|
|
|
-
|
|
|
Loss on early extinguishment of debt (8)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(855
|
)
|
|
Income (loss) before income taxes, equity in earnings (losses) of an
investee and gain on sale of real estate
|
|
|
|
(19,323
|
)
|
|
|
|
57,330
|
|
|
|
|
156,948
|
|
|
|
|
198,906
|
|
|
Income tax expense
|
|
|
|
(121
|
)
|
|
|
|
(835
|
)
|
|
|
|
(1,566
|
)
|
|
|
|
(1,945
|
)
|
|
Equity in earnings (losses) of an investee
|
|
|
|
(50
|
)
|
|
|
|
28
|
|
|
|
|
21
|
|
|
|
|
94
|
|
|
Income (loss) before gain on sale of real estate
|
|
|
|
(19,494
|
)
|
|
|
|
56,523
|
|
|
|
|
155,403
|
|
|
|
|
197,055
|
|
|
Gain on sale of real estate (9)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
11,015
|
|
|
|
|
130
|
|
|
Net income (loss)
|
|
|
|
(19,494
|
)
|
|
|
|
56,523
|
|
|
|
|
166,418
|
|
|
|
|
197,185
|
|
|
Preferred distributions
|
|
|
|
(5,166
|
)
|
|
|
|
(5,166
|
)
|
|
|
|
(20,664
|
)
|
|
|
|
(20,664
|
)
|
|
Net income (loss) available for common shareholders
|
|
|
$
|
(24,660
|
)
|
|
|
$
|
51,357
|
|
|
|
$
|
145,754
|
|
|
|
$
|
176,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
151,400
|
|
|
|
|
149,758
|
|
|
|
|
150,709
|
|
|
|
|
149,652
|
|
|
Weighted average common shares outstanding (diluted)
|
|
|
|
151,400
|
|
|
|
|
149,769
|
|
|
|
|
151,002
|
|
|
|
|
149,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available for common shareholders per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
$
|
(0.16
|
)
|
|
|
$
|
0.34
|
|
|
|
$
|
0.97
|
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOSPITALITY PROPERTIES TRUST
RECONCILIATIONS OF
FUNDS FROM OPERATIONS,
NORMALIZED FUNDS FROM
OPERATIONS, EBITDA AND ADJUSTED EBITDA
(amounts in
thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Calculation of Funds from Operations (FFO) and Normalized FFO
available for common shareholders: (10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available for common shareholders
|
|
|
$
|
(24,660
|
)
|
|
|
$
|
51,357
|
|
|
|
$
|
145,754
|
|
|
|
$
|
176,521
|
|
|
Add (Less):
|
Depreciation and amortization
|
|
|
|
85,964
|
|
|
|
|
79,179
|
|
|
|
|
329,776
|
|
|
|
|
315,878
|
|
|
|
Gain on sale of real estate (9)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(11,015
|
)
|
|
|
|
(130
|
)
|
|
FFO available for common shareholders
|
|
|
|
61,304
|
|
|
|
|
130,536
|
|
|
|
|
464,515
|
|
|
|
|
492,269
|
|
|
Add (Less):
|
Acquisition related costs (6)
|
|
|
|
389
|
|
|
|
|
2
|
|
|
|
|
2,375
|
|
|
|
|
239
|
|
|
|
Business management incentive fees (5)
|
|
|
|
(17,383
|
)
|
|
|
|
(6,951
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
Loss on distribution to common shareholders of RMR common stock (7)
|
|
|
|
36,773
|
|
|
|
|
-
|
|
|
|
|
36,773
|
|
|
|
|
-
|
|
|
|
Loss on early extinguishment of debt (8)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
855
|
|
|
|
Deferred percentage rent (3)
|
|
|
|
-
|
|
|
|
|
(2,129
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Normalized FFO available for common shareholders
|
|
|
$
|
81,083
|
|
|
|
$
|
121,458
|
|
|
|
$
|
503,663
|
|
|
|
$
|
493,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
151,400
|
|
|
|
|
149,758
|
|
|
|
|
150,709
|
|
|
|
|
149,652
|
|
|
Weighted average common shares outstanding (diluted)
|
|
|
|
151,400
|
|
|
|
|
149,769
|
|
|
|
|
151,002
|
|
|
|
|
149,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available for common shareholders (basic and diluted)
|
|
|
$
|
0.40
|
|
|
|
$
|
0.87
|
|
|
|
$
|
3.08
|
|
|
|
$
|
3.29
|
|
|
|
Normalized FFO available for common shareholders (basic)
|
|
|
$
|
0.54
|
|
|
|
$
|
0.81
|
|
|
|
$
|
3.34
|
|
|
|
$
|
3.30
|
|
|
|
Normalized FFO available for common shareholders (diluted)
|
|
|
$
|
0.54
|
|
|
|
$
|
0.81
|
|
|
|
$
|
3.34
|
|
|
|
$
|
3.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Calculation of EBITDA and Adjusted EBITDA: (11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(19,494
|
)
|
|
|
$
|
56,523
|
|
|
|
$
|
166,418
|
|
|
|
$
|
197,185
|
|
|
Add:
|
Interest expense
|
|
|
|
36,980
|
|
|
|
|
35,385
|
|
|
|
|
144,898
|
|
|
|
|
139,486
|
|
|
|
Income tax expense
|
|
|
|
121
|
|
|
|
|
835
|
|
|
|
|
1,566
|
|
|
|
|
1,945
|
|
|
|
Depreciation and amortization
|
|
|
|
85,964
|
|
|
|
|
79,179
|
|
|
|
|
329,776
|
|
|
|
|
315,878
|
|
|
EBITDA
|
|
|
|
103,571
|
|
|
|
|
171,922
|
|
|
|
|
642,658
|
|
|
|
|
654,494
|
|
|
Add (Less):
|
Acquisition related costs (6)
|
|
|
|
389
|
|
|
|
|
2
|
|
|
|
|
2,375
|
|
|
|
|
239
|
|
|
|
General and administrative expense paid in common shares (12)
|
|
|
|
379
|
|
|
|
|
1,403
|
|
|
|
|
4,105
|
|
|
|
|
6,344
|
|
|
|
Business management incentive fees (5)
|
|
|
|
(17,383
|
)
|
|
|
|
(6,951
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
Loss on distribution to common shareholders of RMR common stock (7)
|
|
|
|
36,773
|
|
|
|
|
-
|
|
|
|
|
36,773
|
|
|
|
|
-
|
|
|
|
Loss on early extinguishment of debt (8)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
855
|
|
|
|
Deferred percentage rent (3)
|
|
|
|
-
|
|
|
|
|
(2,129
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
Gain on sale of real estate (9)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(11,015
|
)
|
|
|
|
(130
|
)
|
|
Adjusted EBITDA
|
|
|
$
|
123,729
|
|
|
|
$
|
164,247
|
|
|
|
$
|
674,896
|
|
|
|
$
|
661,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
At December 31, 2015, HPT owned 302 hotels; 299 of these hotels are
managed by hotel operating companies and three hotels are leased to
hotel operating companies. At December 31, 2015, HPT also owned 193
travel centers; all 193 of these travel centers are leased to a
travel center operating company under five lease agreements. HPT’s
consolidated statements of comprehensive income include hotel
operating revenues and expenses of managed hotels and rental income
from its leased hotels and travel centers. Certain of HPT’s managed
hotels had net operating results that were, in the aggregate,
$13,597 and $18,233 less than the minimum returns due to HPT in the
three months ended December 31, 2015 and 2014, respectively, and
$28,644 and $47,026 less than the minimum returns due to HPT in the
year ended December 31, 2015 and 2014, respectively. When the
managers of these hotels fund the shortfalls under the terms of
HPT’s operating agreements or their guarantees, HPT reflects such
fundings (including security deposit applications) in its
consolidated statements of comprehensive income as a reduction of
hotel operating expenses. Hotel operating expenses were reduced by
$2,002 and $5,185 in the three months ended December 31, 2015 and
2014, respectively, and by $2,574 and $9,499 in the years ended
December 31, 2015 and 2014, respectively. HPT had shortfalls at
certain of its managed hotel portfolios not funded by the managers
of these hotels under the terms of its operating agreements of
$11,595 and $13,048 in the three months ended December 31, 2015 and
2014, respectively, and $26,070 and $37,527 in the years ended
December 31, 2015 and 2014, respectively, which represent the
unguaranteed portions of HPT’s minimum returns from Sonesta. Certain
of HPT’s guarantees and its security deposits may be replenished by
future cash flows from the applicable hotel operations pursuant to
the terms of the respective operating agreements. When HPT’s
guarantees and its security deposits are replenished by cash flows
from hotel operations, HPT reflects such replenishments in its
consolidated statements of comprehensive income as an increase to
hotel operating expenses. HPT had $404 and $104 of guarantee and
security deposit replenishments in the three months ended December
31, 2015 and 2014, respectively, and $27,231 and $5,727 of guarantee
and security deposit replenishments in the years ended December 31,
2015 and 2014, respectively.
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(2)
|
|
Rental income includes $3,760 and $453 in the three months ended
December 31, 2015 and 2014, respectively, and $9,568 and $2,111 in
the years ended December 31, 2015 and 2014, respectively, of
adjustments necessary to record scheduled rent increases under
certain of HPT’s leases, the deferred rent obligations under HPT’s
travel center leases and the estimated future payments to HPT under
its travel center leases for the cost of removing underground
storage tanks on a straight line basis.
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(3)
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In calculating net income in accordance with GAAP, HPT generally
recognizes percentage rental income received for the first, second
and third quarters in the fourth quarter, which is when all
contingencies have been met and the income is earned. HPT includes
estimated amounts of percentage rent in the calculation of
Normalized FFO and Adjusted EBITDA for each quarter of the year. The
fourth quarter Normalized FFO and Adjusted EBITDA calculations
exclude the estimated amounts of percentage rent recognized during
the first three quarters.
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(4)
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Various percentages of total sales at certain of HPT’s hotels are
escrowed as reserves for future renovations or refurbishment, or
FF&E reserve escrows. HPT owns all the FF&E reserve escrows for its
hotels. HPT reports deposits by its tenants into the escrow accounts
under its three hotel leases as FF&E reserve income. HPT does not
report the amounts which are escrowed as FF&E reserves for its
managed hotels as FF&E reserve income.
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(5)
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Incentive fees under HPT’s business management agreement are payable
after the end of each calendar year, are calculated based on common
share total return, as defined, and are included in general and
administrative expense in HPT’s consolidated statements of
comprehensive income. In calculating net income in accordance with
GAAP, HPT recognizes estimated business management incentive fee
expense, if any, each quarter. Although HPT recognizes this expense,
if any, each quarter for purposes of calculating net income, HPT
does not include these amounts in the calculation of Normalized FFO
available for common shareholders or Adjusted EBITDA until the
fourth quarter, which is when the actual incentive fee expense
amount for the year is determined. We recorded $44,880 and reversed
$6,951 of estimated incentive fees during the three months ended
December 31, 2015 and 2014, respectively. Incentive fees were
$62,263 and zero for the years ended December 31, 2015 and 2014,
respectively.
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HPT recorded a liability for the amount by which the estimated fair
value for accounting purposes exceeded the price HPT paid for its
investment in RMR common stock in June 2015. A portion of this
liability is being amortized on a straight line basis through
December 31, 2035, the then 20 year life of HPT’s business
management agreement with the operating subsidiary of RMR as a
reduction to business management fees, which are included in general
and administrative expense. General and administrative expense was
reduced by $896 and $2,038 during the three and twelve months ended
December 31, 2015.
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(6)
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Represents costs associated with HPT’s acquisition activities.
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(7)
|
|
HPT recorded a $36,773 loss on the distribution to common
shareholders of RMR common stock for the fourth quarter of 2015 as a
result of the closing price of RMR common stock being lower than
HPT’s carrying amount per share on the day RMR common stock was
distributed to HPT’s shareholders.
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(8)
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HPT recorded a $726 loss on early extinguishment of debt in the
first quarter of 2014 in connection with amending the terms of its
unsecured revolving credit facility and unsecured term loan and the
redemption of certain senior unsecured notes. HPT recorded a $129
loss on early extinguishment of debt in the third quarter of 2014 in
connection with the redemption of certain senior unsecured notes.
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(9)
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|
HPT recorded an $11,015 gain on sale of real estate in the second
quarter of 2015 in connection with the sale of five travel centers.
HPT recorded a $130 gain on sale of real estate in the second
quarter of 2014 in connection with the sale of one hotel.
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(10)
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HPT calculates FFO available for common shareholders and Normalized
FFO available for common shareholders as shown above. FFO available
for common shareholders is calculated on the basis defined by The
National Association of Real Estate Investment Trusts, or NAREIT,
which is net income available for common shareholders calculated in
accordance with GAAP, excluding any gain or loss on sale of
properties and loss on impairment of real estate assets, plus real
estate depreciation and amortization, as well as certain other
adjustments currently not applicable to HPT. HPT’s calculation of
Normalized FFO available for common shareholders differs from
NAREIT's definition of FFO available for common shareholders because
HPT includes estimated percentage rent in the period to which HPT
estimates that it relates rather than when it is recognized as
income in accordance with GAAP, HPT includes estimated business
management incentive fees, if any, only in the fourth quarter versus
the quarter when they are recognized as expense in accordance with
GAAP and HPT excludes acquisition related costs, loss on
distribution to common shareholders of RMR common stock and losses
on early extinguishment of debt. Elsewhere in this release, HPT also
presents Normalized FFO excluding incentive management fees. HPT
considers FFO available for common shareholders, Normalized FFO
available for common shareholders and Normalized FFO available for
common shareholders excluding incentive management fees to be
appropriate measures of operating performance for a REIT, along with
net income, net income available for common shareholders, operating
income and cash flow from operating activities. HPT believes that
FFO available for common shareholders, Normalized FFO available for
common shareholders and Normalized FFO available for common
shareholders excluding incentive management fees provide useful
information to investors because by excluding the effects of certain
historical amounts, such as depreciation expense, FFO available for
common shareholders, Normalized FFO available for common
shareholders and Normalized FFO available for common shareholders
excluding incentive management fees may facilitate a comparison of
HPT’s operating performance between periods and with other REITs.
FFO available for common shareholders, Normalized FFO available for
common shareholders and Normalized FFO available for common
shareholders excluding incentive management fees are among the
factors considered by HPT’s Board of Trustees when determining the
amount of distributions to shareholders. Other factors include, but
are not limited to, requirements to maintain HPT’s qualification for
taxation as a REIT, limitations in its revolving credit facility and
term loan agreement and public debt covenants, the availability to
HPT of debt and equity capital, HPT’s expectation of its future
capital requirements and operating performance, and HPT’s expected
needs for and availability of cash to pay its obligations. FFO
available for common shareholders and Normalized FFO available for
common shareholders do not represent cash generated by operating
activities in accordance with GAAP and should not be considered as
alternatives to net income, net income available for common
shareholders, operating income or cash flow from operating
activities determined in accordance with GAAP, or as indicators of
HPT’s financial performance or liquidity, nor are these measures
necessarily indicative of sufficient cash flow to fund all of HPT’s
needs. These measures should be considered in conjunction with net
income, net income available for common shareholders, operating
income and cash flow from operating activities as presented in HPT’s
consolidated statements of comprehensive income and consolidated
statements of cash flows. Other REITs and real estate companies may
calculate FFO available for common shareholders and Normalized FFO
available for common shareholders differently than HPT does.
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(11)
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HPT calculates EBITDA and Adjusted EBITDA as shown above. Elsewhere
in this release, HPT also presents Adjusted EBITDA excluding
management incentive fees. HPT considers EBITDA, Adjusted EBITDA and
Adjusted EBITDA excluding management incentive fees to be
appropriate measures of its operating performance, along with net
income, net income available for common shareholders, operating
income and cash flow from operating activities. HPT believes that
EBITDA, Adjusted EBITDA and Adjusted EBITDA excluding management
incentive fees provide useful information to investors because by
excluding the effects of certain historical amounts, such as
interest, depreciation and amortization expense, EBITDA, Adjusted
EBITDA and Adjusted EBITDA excluding management incentive fees may
facilitate a comparison of current operating performance with past
operating performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA
excluding management incentive fees do not represent cash generated
by operating activities in accordance with GAAP and should not be
considered an alternative to net income, net income available for
common shareholders, operating income or cash flow from operating
activities, determined in accordance with GAAP or as an indicator of
financial performance or liquidity, nor are these measures
necessarily indicative of sufficient cash flow to fund all of HPT’s
needs. These measures should be considered in conjunction with net
income, net income available for common shareholders, operating
income and cash flow from operating activities as presented in HPT’s
consolidated statements of comprehensive income and consolidated
statements of cash flows. Other REITs and real estate companies may
calculate EBITDA and Adjusted EBITDA differently than HPT does.
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(12)
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Amounts represent the portion of business management fees that were
payable in HPT’s common shares as well as equity based compensation
for HPT’s trustees, its officers and certain other employees of
HPT’s manager. Beginning June 1, 2015, all business management fees
are paid in cash.
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|
HOSPITALITY PROPERTIES TRUST
CONSOLIDATED BALANCE
SHEETS
(amounts in thousands, except share data)
(Unaudited)
|
|
|
|
|
As of December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Real estate properties:
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
$
|
1,529,004
|
|
|
|
$
|
1,484,210
|
|
|
Buildings, improvements and equipment
|
|
|
|
6,740,423
|
|
|
|
|
6,171,983
|
|
|
Total real estate properties, gross
|
|
|
|
8,269,427
|
|
|
|
|
7,656,193
|
|
|
Accumulated depreciation
|
|
|
|
(2,218,499
|
)
|
|
|
|
(1,982,033
|
)
|
|
Total real estate properties, net
|
|
|
|
6,050,928
|
|
|
|
|
5,674,160
|
|
|
Cash and cash equivalents
|
|
|
|
13,682
|
|
|
|
|
11,834
|
|
|
Restricted cash (FF&E reserve escrow)
|
|
|
|
51,211
|
|
|
|
|
33,982
|
|
|
Due from related persons
|
|
|
|
50,987
|
|
|
|
|
40,253
|
|
|
Other assets, net
|
|
|
|
240,789
|
|
|
|
|
222,333
|
|
|
Total assets
|
|
|
$
|
6,407,597
|
|
|
|
$
|
5,982,562
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
|
$
|
465,000
|
|
|
|
$
|
18,000
|
|
|
Unsecured term loan
|
|
|
|
400,000
|
|
|
|
|
400,000
|
|
|
Senior unsecured notes, net of discounts
|
|
|
|
2,413,995
|
|
|
|
|
2,412,135
|
|
|
Convertible senior unsecured notes
|
|
|
|
8,478
|
|
|
|
|
8,478
|
|
|
Security deposits
|
|
|
|
53,579
|
|
|
|
|
33,069
|
|
|
Accounts payable and other liabilities
|
|
|
|
179,783
|
|
|
|
|
106,903
|
|
|
Due to related persons
|
|
|
|
69,514
|
|
|
|
|
8,658
|
|
|
Dividends payable
|
|
|
|
5,166
|
|
|
|
|
5,166
|
|
|
Total liabilities
|
|
|
|
3,595,515
|
|
|
|
|
2,992,409
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred shares of beneficial interest, no par value; 100,000,000
shares authorized:
|
|
|
|
|
|
|
|
|
|
Series D preferred shares; 7 1/8% cumulative redeemable; 11,600,000
shares issued and outstanding, aggregate liquidation preference of
$290,000
|
|
|
|
280,107
|
|
|
|
|
280,107
|
|
|
Common shares of beneficial interest, $.01 par value; 200,000,000
shares authorized; 151,547,288 and 149,920,449 shares issued and
outstanding, respectively
|
|
|
|
1,515
|
|
|
|
|
1,499
|
|
|
Additional paid in capital
|
|
|
|
4,165,911
|
|
|
|
|
4,118,551
|
|
|
Cumulative net income
|
|
|
|
2,881,657
|
|
|
|
|
2,715,239
|
|
|
Cumulative other comprehensive income (loss)
|
|
|
|
(15,523
|
)
|
|
|
|
25,804
|
|
|
Cumulative preferred distributions
|
|
|
|
(321,313
|
)
|
|
|
|
(300,649
|
)
|
|
Cumulative common distributions
|
|
|
|
(4,180,272
|
)
|
|
|
|
(3,850,398
|
)
|
|
Total shareholders’ equity
|
|
|
|
2,812,082
|
|
|
|
|
2,990,153
|
|
|
Total liabilities and shareholders’ equity
|
|
|
$
|
6,407,597
|
|
|
|
$
|
5,982,562
|
|
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160224005471/en/
Source: Hospitality Properties Trust