NEWTON, Mass., Dec 07, 2009 (BUSINESS WIRE) -- Hospitality Properties Trust (NYSE: HPT) today announced that it will
begin paying a quarterly cash distribution to common shareholders of
$0.45/share ($1.80/share per year) in 2010. HPT expects that a
distribution to common shareholders may be declared in January 2010 and
be paid in February 2010.
In April 2009, HPT announced that it had suspended payment of common
share distributions and that it would make an announcement in December
2009 regarding the amount of common share distributions which it would
pay in 2009 in order to comply with Internal Revenue Service ("IRS")
rules applicable to real estate investment trusts, or REITs, and whether
the 2009 distribution, if any, would be paid in cash or some combination
of cash and common shares. Simultaneously with today's announcement
concerning 2010 distributions, HPT announced that it will declare no
additional common share distributions for 2009 because it has met its
minimum IRS distribution requirements for 2009.
Hospitality Properties Trust is a REIT which owns 289 hotels and 185
travel centers located throughout the United States and in Puerto Rico
and Ontario, Canada. HPT is headquartered in Newton, MA.
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
OTHER FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON HPT'S CURRENT BELIEFS AND EXPECTATIONS BUT THEY ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING
SOME REASONS WHICH ARE BEYOND HPT'S CONTROL. FOR EXAMPLE:
THIS PRESS RELEASE STATES THAT HPT EXPECTS TO DECLARE A CASH QUARTERLY
DISTRIBUTION OF $0.45/SHARE ($1.80/SHARE PER YEAR) IN JANUARY 2010 AND
TO PAY THAT DISTRIBUTION IN FEBRUARY 2010. AN IMPLICATION OF THESE
STATEMENTS MAY BE THAT HPT WILL IN FACT DECLARE A DISTRIBUTION OF
$0.45/SHARE IN JANUARY 2010, PAY THAT DISTRIBUTION IN FEBRUARY 2010 AND
THAT HPT WILL CONTINUE TO PAY QUARTERLY DISTRIBUTIONS IN CASH FOR AT
LEAST ONE YEAR. IN FACT, HPT'S FUTURE PAYMENTS OF DISTRIBUTIONS AND THE
AMOUNTS OF FUTURE DISTRIBUTIONS ARE DEPENDENT UPON FUTURE DECISIONS BY
HPT'S BOARD OF TRUSTEES WHICH MAY TAKE ACCOUNT OF NUMEROUS FACTORS
AFFECTING HPT'S BUSINESS, INCLUDING:
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THE OPERATIONS OF HPT'S OWNED HOTELS ARE NOT NOW PRODUCING SUFFICIENT
CASH FLOW TO PAY CONTRACTUAL MINIMUM AMOUNTS DUE TO HPT. WITH RESPECT
TO TWO OF HPT'S COMBINATION CONTRACTS AFFECTING 53 HOTELS, MARRIOTT
INTERNATIONAL, INC. IS PAYING HPT ONLY THE AMOUNTS EARNED AT THE
HOTELS. THROUGH DECEMBER 7, 2009, HPT HAS SATISFIED THE MINIMUM
AMOUNTS DUE UNDER THESE CONTRACTS BY REDUCING ITS LIABILITIES FOR
SECURITY DEPOSITS BY APPROXIMATELY $14.5 MILLION (LEAVING ADDITIONAL
DEPOSITS AVAILABLE OF APPROXIMATELY $50.2 MILLION). THESE SECURITY
DEPOSITS MAY BECOME EXHAUSTED AND HPT DOES NOT RECEIVE CASH FLOW WHEN
SECURITY DEPOSITS ARE USED TO SATISFY THESE OBLIGATIONS DUE TO HPT.
MOREOVER, ALL OF HPT'S OTHER HOTEL MANAGERS AND TENANTS APPEAR TO BE
MAKING PAYMENTS TO HPT BY HONORING GUARANTEE OBLIGATIONS OR FOR OTHER
BUSINESS REASONS. IF THE PRESENT BUSINESS CIRCUMSTANCES AFFECTING THE
OPERATIONS OF HPT'S HOTELS DO NOT IMPROVE BUT CONTINUE FOR AN EXTENDED
PERIOD OR WORSEN, HPT'S HOTEL OPERATORS' LIMITED GUARANTEES AND
SECURITY DEPOSITS MAY BE EXHAUSTED AND HPT'S HOTEL OPERATORS MAY
BECOME UNABLE OR UNWILLING TO PAY THE MINIMUM RENTS AND RETURNS DUE
UNDER HPT'S HOTEL CONTRACTS. IF HPT DOES NOT RECEIVE THE MINIMUM RENTS
AND RETURNS DUE UNDER ITS HOTEL CONTRACTS, HPT MAY BE UNABLE OR
UNWILLING TO CONTINUE PAYING QUARTERLY CASH DISTRIBUTIONS OF
$0.45/SHARE ($1.80/SHARE PER YEAR). ACCORDINGLY, THE AMOUNT OF HPT'S
FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED, OR FUTURE
DISTRIBUTIONS MAY BE PAID IN SHARES INSTEAD OF CASH.
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TRAVELCENTERS OF AMERICA, LLC ("TA") IS HPT'S LARGEST TENANT. IN
AUGUST 2008, HPT ENTERED A RENT DEFERRAL AGREEMENT WITH TA WHICH
ALLOWS TA TO DEFER UP TO $5 MILLION PER MONTH THROUGH DECEMBER 31,
2010, AND TA HAS TO DATE TAKEN FULL ADVANTAGE OF ITS DEFERRAL RIGHTS.
TA HAS A SHORT HISTORY OF OPERATIONS AND IT HAS BEEN UNABLE TO PRODUCE
CONSISTENT PROFITABLE OPERATIONS. IF CURRENT BUSINESS CONDITIONS
AFFECTING TA'S OPERATIONS DO NOT IMPROVE BUT CONTINUE FOR AN EXTENDED
PERIOD OR WORSEN, TA MAY BECOME UNABLE OR UNWILLING TO PAY THE
DEFERRED RENT AMOUNTS DUE HPT OR MAY BECOME UNABLE OR UNWILLING TO PAY
THE NON-DEFERRED RENTS DUE HPT (APPROXIMATELY $14.2 MILLION PER MONTH
IN CASH, OR $170.2 MILLION/YEAR AS OF DECEMBER 7, 2009). IF TA FURTHER
REDUCES THE RENT IT PAYS HPT OR CEASES TO PAY RENTS, HPT MAY BECOME
UNABLE OR UNWILLING TO CONTINUE PAYING QUARTERLY CASH DISTRIBUTIONS OF
$0.45/SHARE ($1.80/SHARE PER YEAR); AND THE AMOUNT OF HPT'S FUTURE
DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED, OR FUTURE DISTRIBUTIONS
MAY BE PAID IN SHARES RATHER THAN CASH.
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OTHER FACTORS SUCH AS HPT'S INABILITY TO RE-FINANCE DEBT MATURITIES
COULD ALSO CAUSE THE AMOUNT OF HPT'S FUTURE CASH DISTRIBUTIONS TO
COMMON SHAREHOLDERS TO DECLINE OR BE ELIMINATED.
THIS PRESS RELEASE ALSO STATES THAT HPT WILL DECLARE NO ADDITIONAL
COMMON SHARE DISTRIBUTIONS IN 2009 BECAUSE IT HAS MET ITS MINIMUM IRS
DISTRIBUTION REQUIREMENTS FOR 2009. THIS STATEMENT IS BASED UPON AN
ESTIMATE OF 2009 TAXABLE INCOME. IN FACT, HOWEVER, HPT CAN NOT CALCULATE
A FINAL AMOUNT OF ITS 2009 TAXABLE INCOME UNTIL AFTER THE END OF 2009
AND ANY DETERMINATION OF TAXABLE INCOME MAY BE SUBJECT TO AUDIT OR
OTHERWISE DISPUTED BY THE IRS. IF, UPON FINAL DETERMINATION OF ITS
TAXABLE INCOME OR AS A RESULT OF AN IRS AUDIT, IT APPEARS THAT HPT HAS
NOT PAID SUFFICIENT DISTRIBUTIONS IN 2009, HPT MAY HAVE TO PAY TAXES AND
MAY BECOME SUBJECT TO VARIOUS PENALTIES, INCLUDING POSSIBLE LOSS OF ITS
STATUS AS A REIT UNDER IRS RULES.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.
EXCEPT AS MAY BE REQUIRED BY LAW, HPT DOES NOT INTEND TO IMPLY THAT IT
HAS ANY OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENTS IN THIS
PRESS RELEASE BECAUSE OF CHANGED CIRCUMSTANCES OR OTHERWISE.
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.
SOURCE: Hospitality Properties Trust
Hospitality Properties Trust
Timothy A. Bonang, 617-796-8232
Vice President, Investor Relations
or
Carlynn Finn, 617-796-8232
Manager, Investor Relations
www.hptreit.com
Copyright Business Wire 2009