NEWTON, Mass.--Hospitality Properties Trust (NYSE: HPT) today
announced its results of operations for the quarter ended March 31,
2006.
Results for the quarter ended March 31, 2006:
Net income was $35.2 million for the quarter ended March 31, 2006,
compared to $28.7 million for the same quarter last year. Net income
available for common shareholders was $33.3 million, or $0.46 per share,
for the quarter ended March 31, 2006, compared to $26.8 million, or
$0.40 per share, for the same quarter last year.
Funds from operations (FFO) for the quarter ended March 31, 2006 were
$72.8 million, or $1.01 per share. This compares to FFO for the quarter
ended March 31, 2005 of $60.9 million, or $0.91 per share.
The weighted average number of common shares outstanding totaled 71.9
million and 67.2 million for the quarters ended March 31, 2006 and
2005, respectively.
Portfolio Performance:
Revenue per available room, or RevPar, for the quarter ended March
31, 2006, versus the same quarter last year increased 13.1% to $70.21.
Average daily rate, or ADR, rose to $98.33 an 11.0% improvement, while
occupancy increased by 1.3 percentage points to 71.4% from the prior
year period.
Financing Activities:
On April 3, 2006, HPT declared its regular quarterly common share
dividend of $0.73 per common share ($2.92 per share per year). This
regular quarterly dividend will be paid to common shareholders of record
as of the close of business on April 12, 2006, and distributed on or
about May 11, 2006.
Investing Activities:
On January 6, 2006, HPT acquired the Harbor Court Complex in
Baltimore's Inner Harbor area for $78 million. The Harbor Court Complex
is a mixed use development comprised of the 195 room Harbor Court Hotel,
a 72,042 square foot office building and a 530 space parking garage.
Simultaneously with this purchase, HPT entered into an agreement with
InterContinental Hotels Group, or IHG, to manage the hotel under its
InterContinental Hotels and Resorts brand.
On January 25, 2006, HPT announced that it had agreed to purchase
nine hotels for $196.2 million. The hotels include five Crowne Plaza
Hotels, one full service Holiday Inn Select Hotel, two Staybridge Suites
Hotels and one Holiday Inn SunSpree Resort Hotel. The purchases were
effective January 20, 2006, except for the purchase of the Holiday Inn
SunSpree Resort Hotel in Jamaica which is delayed pending certain third
party approvals. Simultaneously with this purchase, HPT entered into a
long term management agreement with IHG for eight of the hotels. HPT
will enter into a long term lease with IHG for the Holiday Inn SunSpree
Resort Hotel simultaneous with its purchase which is expected to close
later in 2006.
Subsequent Events:
On April 6, 2006, HPT purchased two Crowne Plaza Hotels, one in
Miami, Florida and the other in Philadelphia, Pennsylvania, for $63
million. These hotels have 749 rooms/suites and over 23,000 square feet
of meeting space. Simultaneously with this purchase, HPT amended its
management agreement with IHG for the eight hotels acquired on January
25, 2006, by adding these hotels to that combination agreement.
On April 13, 2006, HPT purchased a 150 room Staybridge Suites Hotel
in Parsippany, New Jersey for $21 million. Simultaneously with this
transaction, HPT amended its management agreement with IHG for 30
Staybridge Suites by adding this hotel to that combination agreement.
Conference Call:
On Wednesday, May 3, at 1:00 p.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 ended March 31, 2006.
The conference call telephone number is (800) 810-0924. Participants
calling from outside the United States and Canada should dial (913)
981-4900. 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 9, 2006. To hear the replay, dial (719)
457-0820. The replay pass code is 1003439.
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 2006 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 310 hotels located in 38 states, Puerto Rico and Canada
as of May 3, 2006. HPT is headquartered in Newton, Massachusetts.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND THE
FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON
HPT'S CURRENT BELIEFS AND EXPECTATIONS, BUT, FOR VARIOUS REASONS, THEY
MAY NOT OCCUR. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT HPT'S PURCHASE OF THE HOLIDAY INN
SUNSPREE RESORT IN JAMAICA WAS DELAYED PENDING THIRD PARTY APPROVALS.
THE REQUIRED THIRD PARTY APPROVAL IS FROM THE GOVERNMENT OF JAMAICA AND
ITS RECEIPT IS NOT ASSURED. THIS APPROVAL REQUIREMENT MAY DELAY THIS
PURCHASE FOR AN EXTENDED PERIOD OR PREVENT ITS OCCURRING.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO RELEASE
PUBLICLY THE RESULT OF ANY REVISION TO THESE FORWARD LOOKING STATEMENTS
THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
Hospitality Properties Trust
CONSOLIDATED STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
(amounts in thousands, except per share data)
Quarter Ended
March, 31
-------------------
2006 2005
--------- ---------
Revenues:
Hotel operating revenues (1) $201,828 $145,047
Rental income 32,476 31,065
FF&E reserve income (2) 4,990 4,399
Interest income 422 236
--------- ---------
Total revenues 239,716 180,747
--------- ---------
Expenses:
Hotel operating expenses (1) 144,189 100,425
Interest (including amortization of deferred
financing costs of $610 and $734,
respectively) 18,988 15,429
Depreciation and amortization 34,952 30,823
General and administrative 6,354 5,364
--------- ---------
Total expenses 204,483 152,041
--------- ---------
Net income 35,233 28,706
Preferred distributions (1,914) (1,914)
--------- ---------
Net income available for common shareholders $33,319 $26,792
========= =========
Calculation of FFO (3):
Net income available for common shareholders $33,319 $26,792
Add: FF&E deposits not in net income (2) 512 499
Depreciation and amortization 34,952 30,823
Deferred percentage rent (4) 1,648 920
Deferred hotel operating income (5) 2,350 1,849
-------- ---------
Funds from operations ("FFO") $72,781 $60,883
======== =========
Weighted average common shares outstanding 71,921 67,203
======== =========
Per common share amounts:
Net income available for common shareholders $0.46 $0.40
FFO (3) $1.01 $0.91
Common distributions declared $0.73 $0.72
See Notes on page 5.
Hospitality Properties Trust
NOTES TO CONSOLIDATED STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
(amounts in thousands, except per share data)
(1) At March 31, 2006, each of our 307 hotels are included in one of
eleven combinations of hotels of which 198 are leased to one of our
taxable REIT subsidiaries and managed by independent hotel operating
companies and 109 are leased to third parties. Our consolidated
statement of income includes hotel operating revenues and expenses of
managed hotels and rental income from our leased hotels.
(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. We own the FF&E Reserve escrows for all
the hotels leased to our taxable REIT subsidiaries and for most of the
hotels leased to third parties. We have a security and remainder
interest in the FF&E Reserve escrows for the remaining hotels leased
to third parties. When we own the FF&E Reserve escrows at hotels
leased to third parties we report payments into the escrow as FF&E
reserve income. When we have a security and remainder interest in the
FF&E Reserve escrows, deposits are not included in revenue but are
included in FFO. We do not report the amounts which are escrowed as
FF&E reserves for our managed hotels as FF&E reserve income in
our consolidated statement of income.
(3) We compute FFO as shown. Our calculation of FFO differs from the
NAREIT definition because we include FF&E deposits not included in
net income (see note 2), deferred percentage rent (see note 4) and
deferred hotel operating income (see note 5). We consider FFO to be an
appropriate measure of performance for a 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, it may facilitate 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 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 bank 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.
(4) 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.
(5) Our share of the operating results of our managed hotels in
excess of the minimum returns due to us are generally determined based
upon annual calculations. We recognize our share of income in excess of
our minimum returns in the fourth quarter, which is when all
contingencies are met and the income is earned. Although we defer
recognition of this income until the fourth quarter for purposes of
calculating net income, we include the estimated amount in the
calculation of FFO for each quarter of the year. The fourth quarter FFO
calculation excludes the amounts recognized during the first three
quarters.
Hospitality Properties Trust
CONSOLIDATED BALANCE SHEET
(dollars in thousands, except share data)
March December
31, 31,
2006 2005
----------- -----------
(Unaudited)
ASSETS
------
Real estate properties, at cost:
Land $572,599 $537,389
Buildings, improvements and equipment 3,306,239 3,089,304
----------- -----------
3,878,838 3,626,693
Accumulated depreciation (627,966) (613,007)
----------- -----------
3,250,872 3,013,686
Cash and cash equivalents 13,255 18,568
Restricted cash (FF&E reserve escrow) 26,491 29,063
Other assets, net 48,540 53,290
----------- -----------
$3,339,158 $3,114,607
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Revolving credit facility $282,000 $35,000
Senior notes, net of discounts 921,729 921,606
Mortgage payable 3,749 3,766
Security deposits 185,364 185,304
Accounts payable and other liabilities 104,345 108,595
Due to affiliate 3,785 2,967
Dividends payable 1,914 1,914
----------- -----------
Total liabilities 1,502,886 1,259,152
----------- -----------
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
Common shares of beneficial interest; $0.01
par value; 100,000,000 shares authorized,
71,920,578 issued and outstanding 719 719
Additional paid-in capital 2,059,883 2,059,883
Cumulative net income 1,246,305 1,211,072
Cumulative preferred distributions (61,250) (59,336)
Cumulative common distributions (1,492,691) (1,440,189)
----------- -----------
Total shareholders' equity 1,836,272 1,855,455
----------- -----------
$3,339,158 $3,114,607
=========== ===========
Hospitality Properties Trust
Timothy A. Bonang
617-796-8149
Manager of Investor Relations
www.hptreit.com