Second Quarter Net Income Available for Common Shareholders of
$0.37 Per Share
Second Quarter Normalized FFO Available for Common Shareholders of
$1.06 Per Share
NEWTON, Mass.--(BUSINESS WIRE)--
Hospitality Properties Trust (Nasdaq: HPT) today announced its financial
results for the quarter and six months ended June 30, 2017.
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Three Months Ended June 30,
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Six Months Ended June 30,
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2017
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2016
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2017
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2016
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($ in thousands, except per share and RevPAR data)
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Net income available for common shareholders
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$
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60,699
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$
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50,895
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$
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86,542
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$
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97,780
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Net income available for common shareholders per share
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$
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0.37
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$
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0.34
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$
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0.53
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$
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0.65
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Adjusted EBITDA (1)
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$
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220,297
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$
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215,608
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$
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414,873
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$
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403,311
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Normalized FFO available for common shareholders (1)
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$
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173,604
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$
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165,714
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$
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322,411
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$
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305,868
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Normalized FFO available for common shareholders per share (1)
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$
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1.06
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$
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1.09
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$
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1.96
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$
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2.02
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Portfolio Performance
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Comparable hotel RevPAR
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$
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101.97
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$
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102.30
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$
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95.60
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$
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95.28
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Change in comparable hotel RevPAR
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(0.3
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%)
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—
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0.3
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%
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—
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RevPAR (all hotels)
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$
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103.38
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$
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103.59
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$
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96.47
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$
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96.11
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Change in RevPAR (all hotels)
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(0.2
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%)
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—
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0.4
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%
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Coverage of HPT’s minimum returns and rents for hotels
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1.26x
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1.34x
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1.07x
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1.13x
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Coverage of HPT's minimum rents for travel centers
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1.62x
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1.64x
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1.41x
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1.50x
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(1) Reconciliations of net income determined in accordance with U.S.
generally accepted accounting principles, or GAAP, to earnings before
interest, taxes, depreciation and amortization, or EBITDA, and EBITDA as
adjusted, or Adjusted EBITDA, and net income available for common
shareholders determined in accordance with GAAP to funds from
operations, or FFO, available for common shareholders, and Normalized
FFO available for common shareholders, for the three and six months
ended June 30, 2017 and 2016 appear later in this press release.
John Murray, President and Chief Operating Officer of HPT, made the
following statement regarding today's announcement:
“HPT’s second quarter 2017 comparable hotel RevPAR declined by 0.3%
compared to the same period last year due to various factors including a
continued sluggish economy and room supply growth. Nonetheless, we had
continued high occupancy, increases in average daily rate and solid
coverage of our minimum returns. Also, our TA properties generated solid
performance this quarter with both fuel and non-fuel margins increasing
versus the same period last year and steady rent coverage despite rent
increases of over 5%.”
Results for the Three and Six Months Ended June 30, 2017 and
Recent Activities:
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Net Income Available for Common Shareholders: Net income
available for common shareholders for the quarter ended June 30, 2017
was $60.7 million, or $0.37 per diluted share, compared to net income
available for common shareholders of $50.9 million, or $0.34 per
diluted share, for the quarter ended June 30, 2016. Net income
available for common shareholders includes $17.8 million, or $0.11 per
diluted share, and $25.9 million, or $0.17 per diluted share, of
estimated business management incentive fee expense for the quarters
ended June 30, 2017 and 2016, respectively. The weighted average
number of diluted common shares outstanding was 164.2 million and
151.4 million for the quarters ended June 30, 2017 and 2016,
respectively.
Net income available for common shareholders
for the six months ended June 30, 2017 was $86.5 million, or $0.53 per
diluted share, compared to net income available for common
shareholders of $97.8 million, or $0.65 per diluted share, for the six
months ended June 30, 2016. Net income available for common
shareholders includes $37.4 million, or $0.23 per diluted share, and
$31.2 million, or $0.21 per diluted share, of estimated business
management incentive fee expense for the six months ended June 30,
2017 and 2016, respectively. Net income available for common
shareholders for the six months ended June 30, 2017 was reduced by
$9.9 million, or $0.06 per diluted share, for the amount by which the
liquidation preference for HPT's 7.125% Series D cumulative redeemable
preferred shares that were redeemed during the period exceeded the
carrying value for those preferred shares as of the date of
redemption. The weighted average number of diluted common shares
outstanding was 164.2 million and 151.4 million for the six months
ended June 30, 2017 and 2016, respectively.
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Adjusted EBITDA: Adjusted EBITDA for the quarter ended June 30,
2017 compared to the same period in 2016 increased 2.2% to $220.3
million.
Adjusted EBITDA for the six months ended June 30,
2017 compared to the same period in 2016 increased 2.9% to $414.9
million.
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Normalized FFO Available for Common Shareholders: Normalized
FFO available for common shareholders for the quarter ended June 30,
2017 were $173.6 million, or $1.06 per diluted share, compared to
Normalized FFO available for common shareholders of $165.7 million, or
$1.09 per diluted share, for the quarter ended June 30, 2016.
Normalized
FFO available for common shareholders for the six months ended
June 30, 2017 were $322.4 million, or $1.96 per diluted share,
compared to Normalized FFO available for common shareholders of $305.9
million, or $2.02 per diluted share, for the six months ended June 30,
2016.
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Hotel RevPAR (comparable hotels): For the quarter ended
June 30, 2017 compared to the same period in 2016 for HPT’s 305 hotels
that were owned continuously since April 1, 2016: average daily rate,
or ADR, increased 0.8% to $127.78; occupancy decreased 0.9 percentage
points to 79.8%; and revenue per available room, or RevPAR, decreased
0.3% to $101.97.
For the six months ended June 30, 2017
compared to the same period in 2016 for HPT’s 302 hotels that were
owned continuously since January 1, 2016: ADR increased 0.9% to
$126.29; occupancy decreased 0.4 percentage points to 75.7%; and
RevPAR increased 0.3% to $95.60.
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Hotel RevPAR (all hotels): For the quarter ended June 30, 2017
compared to the same period in 2016 for HPT’s 310 hotels: ADR
increased 0.8% to $129.55; occupancy decreased 0.8 percentage points
to 79.8%; and RevPAR decreased 0.2% to $103.38.
For the six
months ended June 30, 2017 compared to the same period in 2016 for
HPT’s 310 hotels: ADR increased 0.8% to $127.78; occupancy decreased
0.3 percentage points to 75.5%; and RevPAR increased 0.4% to $96.47.
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Coverage of Minimum Returns and Rents: For the quarter ended
June 30, 2017, the aggregate coverage ratio of (x) total hotel
revenues minus all hotel expenses and FF&E reserve escrows which are
not subordinated to minimum returns and minimum rent payments to HPT
to (y) HPT’s minimum returns and rents due from hotels decreased to
1.26x from 1.34x for the quarter ended June 30, 2016.
For
the six months ended June 30, 2017, the aggregate coverage ratio of
(x) total hotel revenues minus all hotel expenses and FF&E reserve
escrows which are not subordinated to minimum returns and minimum rent
payments to HPT to (y) HPT’s minimum returns and rents due from hotels
decreased to 1.07x from 1.13x for the six months ended June 30, 2016.
For
the quarter ended June 30, 2017, the aggregate coverage ratio of (x)
total travel center revenues less travel center expenses to (y) HPT’s
minimum rent due from leased travel centers decreased to 1.62x from
1.64x for the quarter ended June 30, 2016.
For the six
months ended June 30, 2017, the aggregate coverage ratio of (x) total
travel center revenues less travel center expenses to (y) HPT’s
minimum rent due from leased travel centers decreased to 1.41x from
1.50x for the six months ended June 30, 2016.
As of
June 30, 2017, approximately 79% of HPT’s aggregate annual minimum
returns and rents were secured by guarantees or security deposits from
HPT’s managers and tenants pursuant to the terms of HPT’s operating
agreements.
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Recent Property Acquisition Activities: In May 2017, HPT
acquired from TravelCenters of America LLC (Nasdaq: TA), or TA, a
newly developed travel center located in Columbia, SC for a purchase
price of $27.6 million, excluding acquisition related costs. HPT added
this Petro branded travel center to its TA No. 4 lease.
In
June 2017, HPT acquired the 389 room Chase Park Plaza Hotel located in
St. Louis, MO for a purchase price of $87.6 million, excluding
acquisition related costs. HPT converted this hotel to the Royal
Sonesta hotel brand and added it to its management
agreement with Sonesta International Hotels Corporation, or Sonesta.
Also
in June 2017, HPT acquired the 495 room Crowne Plaza Ravinia hotel
located in Atlanta, GA for a purchase price of $88.6 million,
excluding acquisition related costs. HPT added this hotel to its
management agreement with InterContinental Hotels Group, plc (LON:
IHG; NYSE: IHG (ADRs)), or InterContinental.
In July
2017, HPT entered into an agreement to acquire 14 extended stay hotels
with 1,653 suites located in 12 states for a purchase price of $138.0
million, excluding acquisition related costs. HPT currently expects to
complete this acquisition during the third quarter of 2017. HPT plans
to re-brand these hotels to the Sonesta ES Suites brand and add them
to its management agreement with Sonesta.
Also in July
2017, HPT entered into an agreement to acquire the 300 room Crowne
Plaza hotel located in Charlotte, NC for a purchase price of $44.0
million, excluding acquisition related costs. HPT currently expects to
complete this acquisition during the third quarter of 2017. HPT plans
to add this hotel to its management agreement with InterContinental.
In
August 2017, HPT acquired the 419 room Crowne Plaza & Lofts hotel
located in Columbus, OH for a purchase price of $49.0 million,
excluding acquisition related costs. HPT added this hotel to its
management agreement with InterContinental.
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Recent Property Disposition Activities:
In July
2017, HPT entered an agreement to sell its 143 room Country Inn &
Suites hotel located in Naperville, IL for $6.6 million, excluding
closing costs. HPT currently expects to complete this sale during the
third quarter of 2017.
In August 2017, HPT sold its 159
room Radisson hotel located in Chandler, AZ for a sale price of $9.5
million, excluding closing costs.
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Tenants and Managers: As of June 30, 2017, HPT had nine
operating agreements with seven hotel operating companies for 310
hotels with 48,087 rooms, which represented 66% of HPT’s total annual
minimum returns and rents, and five lease agreements with one travel
center operating company for 199 travel centers, which represented 34%
of HPT’s total annual minimum returns and rents.
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Marriott Agreements: As of June 30, 2017, 122 of HPT’s hotels
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 $69.0 million as of June 30, 2017 (approximately
$17.3 million per quarter). Because there is no guarantee or security
deposit for this agreement, the minimum returns HPT receives under
this agreement are limited to available hotel cash flows after payment
of operating expenses and funding of a FF&E reserve. During the three
months ended June 30, 2017, HPT realized returns under its Marriott
No. 1 agreement of $20.4 million. HPT’s Marriott No. 234 agreement
includes 68 hotels and requires annual minimum returns to HPT of
$106.4 million as of June 30, 2017 (approximately $26.6 million per
quarter). During the three months ended June 30, 2017, HPT realized
returns under its Marriott No. 234 agreement of $26.6 million. HPT’s
Marriott No. 234 agreement is partially secured by a security deposit
and a limited guarantee from Marriott; during the three months ended
June 30, 2017, the available security deposit was replenished by $5.6
million from a share of hotel cash flows in excess of the minimum
returns due to HPT for the period. At June 30, 2017, the available
security deposit from Marriott for the Marriott No. 234 agreement was
$22.3 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 if and 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
June 30, 2017 of $2.5 million was paid to HPT.
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InterContinental Agreement: As of June 30, 2017, 97 of HPT’s
hotels were operated by subsidiaries of InterContinental under one
agreement requiring annual minimum returns and rents to HPT of $181.5
million (approximately $45.4 million per quarter). During the three
months ended June 30, 2017, HPT realized returns and rents under its
InterContinental agreement of $46.9 million. HPT’s InterContinental
agreement is partially secured by a security deposit. During the three
months ended June 30, 2017, the available security deposit was
replenished by $7.5 million from a share of hotel cash flows in excess
of the minimum returns due to HPT for the period. In connection with
the June 2017 acquisition of the Crowne Plaza hotel described above,
InterContinental provided HPT with $7.1 million to supplement the
existing security deposit. At June 30, 2017, the available
InterContinental security deposit which HPT held to pay future payment
shortfalls was $98.3 million.
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Wyndham Agreement: As of June 30, 2017, 22 of HPT’s hotels were
operated under a management agreement with a subsidiary of Wyndham
Worldwide Corporation (NYSE: WYN), or Wyndham, requiring annual
minimum returns of $27.4 million as of June 30, 2017 (approximately
$6.9 million per quarter). HPT also leases 48 vacation units in one of
the hotels to Wyndham Vacation Resorts, Inc., a subsidiary of Wyndham,
which requires annual minimum rent of $1.4 million (approximately $0.4
million per quarter). The guarantee provided by Wyndham with respect
to the lease is unlimited. The guarantee provided by Wyndham with
respect to the management agreement is limited to $35.7 million and as
of December 31, 2016, $1.1 million remained available to cover payment
shortfalls of minimum returns due to HPT under the management
agreement. During the six months ended June 30, 2017, the hotels under
this agreement generated cash flows that were less than the minimum
returns due to HPT and the remaining guaranty was depleted. As of
August 8, 2017, all amounts due to HPT under the management agreement
and the lease have been paid to HPT.
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Carlson Agreement: As of June 30, 2017, 11 of HPT's hotels were
operated under a management agreement with Carlson Hotels Worldwide,
or Carlson, that, prior to the amendment described below, was
scheduled to expire in 2030 and required annual minimum returns of
$12.9 million as of June 30, 2017 (approximately $3.2 million per
quarter). Minimum returns due to HPT are partially guaranteed under
the Carlson agreement. In June 2017, HPT amended its agreement with
Carlson whereby HPT and Carlson agreed to pursue the sale of three
hotels with an aggregate of 511 rooms and an aggregate net book value
of $14.1 million as of June 30, 2017. As described above, HPT sold one
of these hotels in August 2017 and entered into an agreement in July
2017 to sell a second of these hotels. The net proceeds from the sales
of these three hotels will be used to fund certain renovations to the
remaining hotels operated under the Carlson agreement and HPT has
agreed to fund up to $35.0 million for renovation costs in excess of
the net sales proceeds and available FF&E reserves for those remaining
hotels. HPT's annual minimum return and the limited guarantee cap
under the Carlson agreement will increase by 8% of any amounts HPT
funds (excluding the net sales proceeds described above). In addition,
the initial term of the management agreement and the limited guarantee
provided by Carlson were extended to December 31, 2035. The payments
due to HPT under this agreement for the three months ended June 30,
2017 were paid to HPT.
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Morgans Agreement: As of June 30, 2017, HPT leases one hotel to
a subsidiary of Morgans Hotel Group Co., or Morgans, requiring annual
minimum rent to HPT of $7.6 million as of June 30, 2017 (approximately
$1.9 million per quarter). In December 2016, HPT advised Morgans that
the closing of its merger with SBE Entertainment Group, LLC, or SBE,
without HPT's consent was in violation of the Morgans agreement, and
HPT filed an action in California for unlawful detainer against
Morgans and SBE. HPT is in discussions with Morgans and SBE regarding
this matter and is pursuing remedies, which may include terminating
the Morgans agreement. As of August 8, 2017, all scheduled rent
payments due to HPT under the lease have been paid.
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Other Hotel Agreements: As of June 30, 2017, HPT’s remaining 57
hotels were operated under two agreements: one management agreement
with Sonesta (35 hotels), requiring annual minimum returns of $97.1
million as of June 30, 2017 (approximately $24.3 million per quarter)
and 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 June 30, 2017 (approximately $5.5
million per quarter). Minimum returns due to HPT are partially
guaranteed under the Hyatt agreement. 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
flows after payment of operating expenses. The payments due to HPT
under these agreements for the three months ended June 30, 2017 were
paid to HPT.
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Travel Center Agreements: As of June 30, 2017, HPT’s 199 travel
centers located along the U.S. Interstate Highway system were leased
to TA under five lease agreements, which require aggregate annual
minimum rents of $280.7 million (approximately $70.2 million per
quarter). As of June 30, 2017, all payments due to HPT from TA under
these leases were current.
Conference Call:
On Wednesday, August 9, 2017, 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
HPT's second quarter 2017 financial results. 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,
August 16, 2017. To hear the replay, dial (412) 317-0088. The replay
pass code is 10110424.
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
second quarter conference call is strictly prohibited without the prior
written consent of HPT.
Supplemental Data:
A copy of HPT’s Second Quarter 2017 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. (Nasdaq: RMR), 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 and a reconciliation of those amounts to amounts determined
according to GAAP.
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”, "WILL", “MAY” AND NEGATIVES OR DERIVATIVES OF THESE 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:
-
AS OF JUNE 30, 2017, APPROXIMATELY 79% OF HPT’S AGGREGATE ANNUAL
MINIMUM RETURNS AND RENTS WERE SECURED BY GUARANTEES OR SECURITY
DEPOSITS FROM HPT’S MANAGERS AND TENANTS. THIS MAY IMPLY THAT THESE
MINIMUM RETURNS AND RENTS WILL BE PAID. IN FACT, CERTAIN OF THESE
GUARANTEES AND SECURITY DEPOSITS ARE LIMITED IN AMOUNT AND DURATION
AND ALL THE GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITY AND
WILLINGNESS TO PAY. FURTHER, WYNDHAM'S GUARANTEE OF THE MINIMUM
RETURNS DUE FROM HPT'S HOTELS THAT ARE MANAGED BY WYNDHAM WAS DEPLETED
AS OF JUNE 30, 2017. HPT DOES NOT KNOW WHETHER WYNDHAM WILL CONTINUE
TO PAY THE MINIMUM RETURNS DUE TO HPT DESPITE THE DEPLETED GUARANTEE
OR IF WYNDHAM WILL DEFAULT ON ITS PAYMENTS. THE BALANCE OF HPT’S
ANNUAL MINIMUM RETURNS AND RENTS AS OF JUNE 30, 2017 WAS NOT
GUARANTEED NOR DOES HPT HOLD A SECURITY DEPOSIT WITH RESPECT TO THOSE
AMOUNTS. HPT CANNOT BE SURE OF THE FUTURE FINANCIAL PERFORMANCE OF
HPT’S PROPERTIES AND WHETHER SUCH PERFORMANCE WILL COVER HPT’S MINIMUM
RETURNS AND RENTS, WHETHER THE GUARANTEES OR SECURITY DEPOSITS WILL BE
ADEQUATE TO COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS OR RENTS
DUE TO HPT, OR REGARDING HPT’S MANAGERS’, TENANTS’ OR GUARANTORS’
FUTURE ACTIONS IF AND WHEN THE GUARANTEES AND SECURITY DEPOSITS EXPIRE
OR ARE DEPLETED OR THEIR ABILITY OR WILLINGNESS TO PAY MINIMUM RETURNS
AND RENTS OWED TO HPT. MOREOVER, THE SECURITY DEPOSITS HELD BY HPT ARE
NOT SEGREGATED FROM HPT’S OTHER ASSETS AND THE APPLICATION OF SECURITY
DEPOSITS TO COVER PAYMENT SHORTFALLS WILL RESULT IN HPT RECORDING
INCOME, BUT WILL NOT RESULT IN HPT RECEIVING ADDITIONAL CASH,
-
MR. MURRAY NOTES IN THIS PRESS RELEASE THAT HPT'S COMPARABLE HOTEL
REVPAR DECLINED 0.3% IN THE SECOND QUARTER OF 2017 DUE TO VARIOUS
FACTORS AND THAT HPT'S TRAVEL CENTER PROPERTIES GENERATED SOLID
PERFORMANCE FOR THE SECOND QUARTER. HPT'S COMPARABLE HOTEL REVPAR MAY
DECLINE FURTHER IN FUTURE PERIODS AND HPT'S TRAVEL CENTER PERFORMANCE
MAY DECLINE IN FUTURE PERIODS DUE TO VARIOUS FACTORS INCLUDING
COMPETITIVE PRESSURES, CONTINUED OR INCREASED REDUCTIONS IN TRUCKING
FREIGHT VOLUMES AND INCREASED FUEL EFFICIENCY OF TRUCK ENGINES AND
ADOPTION OF ALTERNATIVE TRANSPORTATION TECHNOLOGIES IN THE TRUCKING
INDUSTRY,
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HPT HAS ADVISED MORGANS THAT THE CLOSING OF ITS MERGER WITH SBE WAS IN
VIOLATION OF HPT'S AGREEMENT WITH MORGANS, HPT HAS FILED AN ACTION FOR
UNLAWFUL DETAINER AGAINST MORGANS AND SBE TO COMPEL MORGANS AND SBE TO
SURRENDER POSSESSION OF THE SAN FRANCISCO HOTEL WHICH MORGANS
HISTORICALLY LEASED FROM HPT, AND HPT IS IN DISCUSSIONS WITH MORGANS
AND SBE REGARDING THIS MATTER. THE OUTCOME OF THIS PENDING LITIGATION
AND OF THESE DISCUSSIONS WITH MORGANS AND SBE IS NOT ASSURED, BUT HPT
BELIEVES MORGANS MAY SURRENDER POSSESSION OF THIS HOTEL OR THAT THE
COURT WILL DETERMINE THAT MORGANS AND SBE HAVE BREACHED THE HISTORICAL
LEASE. HPT ALSO BELIEVES THAT THIS HOTEL MAY REQUIRE SUBSTANTIAL
CAPITAL INVESTMENT TO REMAIN COMPETITIVE IN ITS MARKET. THE
CONTINUATION OF THIS DISPUTE WITH MORGANS AND SBE REQUIRES HPT TO
EXPEND LEGAL FEES AND HPT BELIEVES THE RESULT OF THIS DISPUTE MAY
CAUSE SOME LOSS OF RENT AT LEAST UNTIL THIS HOTEL MAY BE RENOVATED AND
OPERATIONS IMPROVE. LITIGATION AND DISPUTES WITH TENANTS OFTEN PRODUCE
UNEXPECTED RESULTS AND HPT CAN PROVIDE NO ASSURANCE REGARDING THE
RESULTS OF THIS DISPUTE,
-
HPT HAS ENTERED INTO AGREEMENTS TO ACQUIRE 15 HOTELS FOR AN AGGREGATE
PURCHASE PRICE OF $182.0 MILLION, EXCLUDING ACQUISITION RELATED COSTS,
AND HPT EXPECTS TO COMPLETE THESE TRANSACTIONS DURING THE THIRD
QUARTER OF 2017 AND TO ADD THESE HOTELS TO ITS EXISTING MANAGEMENT
AGREEMENTS WITH INTERCONTINENTAL AND SONESTA. THESE TRANSACTIONS ARE
SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE SATISFIED. AS A
RESULT, THESE ACQUISITIONS AND THE EXPECTED MANAGEMENT ARRANGEMENTS
MAY NOT OCCUR, MAY BE DELAYED OR THEIR TERMS MAY CHANGE,
-
HPT HAS ENTERED INTO AN AGREEMENT TO SELL A HOTEL FOR A SALES PRICE
OF $6.6 MILLION, EXCLUDING CLOSING COSTS, AND HPT EXPECTS TO COMPLETE
THIS TRANSACTION DURING THE THIRD QUARTER OF 2017. THIS TRANSACTION IS
SUBJECT TO CONDITIONS. THESE CONDITIONS MAY NOT BE SATISFIED. AS A
RESULT, THIS SALE MAY NOT OCCUR, MAY BE DELAYED OR ITS TERMS
MAY CHANGE,
-
HPT AND CARLSON HAVE AGREED TO PURSUE THE SALE OF A THIRD HOTEL THAT
CARLSON MANAGES. HOWEVER, HPT MAY NOT SUCCEED IN SELLING THIS HOTEL
AND ANY SALE IT MAY COMPLETE MAY BE FOR A PRICE BELOW ITS CARRYING
VALUE, AND
-
HPT AND CARLSON HAVE AGREED THAT THE NET PROCEEDS FROM THE SALE OF
THREE HOTELS THEY HAVE AGREED TO PURSUE SELLING WILL BE USED TO FUND
CERTAIN RENOVATIONS AT CERTAIN OF THE REMAINING HOTELS CARLSON MANAGES
FOR HPT. HPT HAS ALSO AGREED TO FUND AN ADDITIONAL $35 MILLION FOR
RENOVATION COSTS FOR THOSE OTHER CARLSON MANAGED HOTELS IN EXCESS OF
THE NET SALES PROCEEDS FROM THE SALES OF THE THREE HOTELS AND
AVAILABLE FF&E RESERVES. THE COMMITMENT TO FUND RENOVATIONS MAY IMPLY
AN EXPECTATION THAT THE OPERATING RESULTS OF THE APPLICABLE HOTELS
WILL IMPROVE AS A RESULT OF THOSE RENOVATIONS. HOWEVER, HPT CANNOT BE
SURE THAT THE PERFORMANCE OF THOSE HOTELS WOULD IMPROVE AND THEY COULD
DECLINE WHILE THE RENOVATIONS ARE BEING PERFORMED AND THEREAFTER.
FURTHER, THE COSTS TO COMPLETE THE RENOVATIONS COULD BE GREATER, AND
THE TIME TO COMPLETE THE RENOVATIONS COULD TAKE LONGER, THAN EXPECTED.
IN ADDITION, ANY IMPROVED RESULTS OF THE RENOVATED HOTELS MAY NOT
OFFSET THE RENOVATION COSTS OR OTHERWISE GENERATE THE EXPECTED RETURNS.
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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating revenues (1)
|
|
|
|
$
|
488,477
|
|
|
|
$
|
471,910
|
|
|
|
|
$
|
896,064
|
|
|
|
$
|
868,413
|
|
Rental income (2)
|
|
|
|
80,971
|
|
|
|
77,293
|
|
|
|
|
160,759
|
|
|
|
153,552
|
|
FF&E reserve income (3)
|
|
|
|
1,155
|
|
|
|
1,096
|
|
|
|
|
2,382
|
|
|
|
2,452
|
|
Total revenues
|
|
|
|
570,603
|
|
|
|
550,299
|
|
|
|
|
1,059,205
|
|
|
|
1,024,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating expenses (1)
|
|
|
|
339,549
|
|
|
|
324,922
|
|
|
|
|
622,272
|
|
|
|
601,227
|
|
Depreciation and amortization
|
|
|
|
95,155
|
|
|
|
88,782
|
|
|
|
|
188,606
|
|
|
|
176,053
|
|
General and administrative (4)
|
|
|
|
30,347
|
|
|
|
37,365
|
|
|
|
|
62,693
|
|
|
|
53,388
|
|
Acquisition related costs (5)
|
|
|
|
—
|
|
|
|
117
|
|
|
|
|
—
|
|
|
|
729
|
|
Total expenses
|
|
|
|
465,051
|
|
|
|
451,186
|
|
|
|
|
873,571
|
|
|
|
831,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
105,552
|
|
|
|
99,113
|
|
|
|
|
185,634
|
|
|
|
193,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
|
|
626
|
|
|
|
749
|
|
|
|
|
1,252
|
|
|
|
749
|
|
Interest income
|
|
|
|
122
|
|
|
|
40
|
|
|
|
|
379
|
|
|
|
138
|
|
Interest expense (including amortization of debt issuance costs and
debt discounts and premiums of $2,194, $2,127, $4,346 and $3,993,
respectively)
|
|
|
|
(45,189
|
)
|
|
|
(41,698
|
)
|
|
|
|
(88,755
|
)
|
|
|
(83,284
|
)
|
Loss on early extinguishment of debt (6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(70
|
)
|
Income before income taxes and equity in earnings of an investee
|
|
|
|
61,111
|
|
|
|
58,204
|
|
|
|
|
98,510
|
|
|
|
110,553
|
|
Income tax expense
|
|
|
|
(786
|
)
|
|
|
(2,160
|
)
|
|
|
|
(1,142
|
)
|
|
|
(2,535
|
)
|
Equity in earnings of an investee
|
|
|
|
374
|
|
|
|
17
|
|
|
|
|
502
|
|
|
|
94
|
|
Net income
|
|
|
|
60,699
|
|
|
|
56,061
|
|
|
|
|
97,870
|
|
|
|
108,112
|
|
Preferred distributions
|
|
|
|
—
|
|
|
|
(5,166
|
)
|
|
|
|
(1,435
|
)
|
|
|
(10,332
|
)
|
Excess of liquidation preference over carrying value of preferred
shares redeemed (7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(9,893
|
)
|
|
|
—
|
|
Net income available for common shareholders
|
|
|
|
$
|
60,699
|
|
|
|
$
|
50,895
|
|
|
|
|
$
|
86,542
|
|
|
|
$
|
97,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
164,123
|
|
|
|
151,408
|
|
|
|
|
164,121
|
|
|
|
151,405
|
|
Weighted average common shares outstanding (diluted)
|
|
|
|
164,165
|
|
|
|
151,442
|
|
|
|
|
164,157
|
|
|
|
151,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available for common shareholders per common share (basic
and diluted)
|
|
|
|
$
|
0.37
|
|
|
|
$
|
0.34
|
|
|
|
|
$
|
0.53
|
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes on pages 11 and 12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOSPITALITY PROPERTIES TRUST
RECONCILIATIONS OF FUNDS FROM OPERATIONS,
NORMALIZED FUNDS FROM OPERATIONS, EBITDA AND ADJUSTED EBITDA
(amounts in thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
Calculation of Funds from Operations (FFO) and Normalized FFO
available for common shareholders: (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available for common shareholders
|
|
|
|
$
|
60,699
|
|
|
|
$
|
50,895
|
|
|
|
|
$
|
86,542
|
|
|
|
$
|
97,780
|
Add:
|
|
|
Depreciation and amortization
|
|
|
|
95,155
|
|
|
|
88,782
|
|
|
|
|
188,606
|
|
|
|
176,053
|
FFO available for common shareholders
|
|
|
|
155,854
|
|
|
|
139,677
|
|
|
|
|
275,148
|
|
|
|
273,833
|
Add:
|
|
|
Acquisition related costs (5)
|
|
|
|
—
|
|
|
|
117
|
|
|
|
|
—
|
|
|
|
729
|
|
|
|
Estimated business management incentive fees (4)
|
|
|
|
17,750
|
|
|
|
25,920
|
|
|
|
|
37,370
|
|
|
|
31,236
|
|
|
|
Loss on early extinguishment of debt (6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
70
|
|
|
|
Excess of liquidation preference over carrying value of preferred
shares redeemed (7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
9,893
|
|
|
|
—
|
Normalized FFO available for common shareholders
|
|
|
|
$
|
173,604
|
|
|
|
$
|
165,714
|
|
|
|
|
$
|
322,411
|
|
|
|
$
|
305,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (basic)
|
|
|
|
164,123
|
|
|
|
151,408
|
|
|
|
|
164,121
|
|
|
|
151,405
|
Weighted average common shares outstanding (diluted)
|
|
|
|
164,165
|
|
|
|
151,442
|
|
|
|
|
164,157
|
|
|
|
151,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available for common shareholders
|
|
|
|
$
|
0.95
|
|
|
|
$
|
0.92
|
|
|
|
|
$
|
1.68
|
|
|
|
$
|
1.81
|
|
|
|
Normalized FFO available for common shareholders
|
|
|
|
$
|
1.06
|
|
|
|
$
|
1.09
|
|
|
|
|
$
|
1.96
|
|
|
|
$
|
2.02
|
|
|
|
Distributions declared per share
|
|
|
|
$
|
0.52
|
|
|
|
$
|
0.51
|
|
|
|
|
$
|
1.03
|
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
Calculation of EBITDA and Adjusted EBITDA: (9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
60,699
|
|
|
|
$
|
56,061
|
|
|
|
|
$
|
97,870
|
|
|
|
$
|
108,112
|
Add:
|
|
|
Interest expense
|
|
|
|
45,189
|
|
|
|
41,698
|
|
|
|
|
88,755
|
|
|
|
83,284
|
|
|
|
Income tax expense
|
|
|
|
786
|
|
|
|
2,160
|
|
|
|
|
1,142
|
|
|
|
2,535
|
|
|
|
Depreciation and amortization
|
|
|
|
95,155
|
|
|
|
88,782
|
|
|
|
|
188,606
|
|
|
|
176,053
|
EBITDA
|
|
|
|
201,829
|
|
|
|
188,701
|
|
|
|
|
376,373
|
|
|
|
369,984
|
Add:
|
|
|
Acquisition related costs (5)
|
|
|
|
—
|
|
|
|
117
|
|
|
|
|
—
|
|
|
|
729
|
|
|
|
General and administrative expense paid in common shares (10)
|
|
|
|
718
|
|
|
|
870
|
|
|
|
|
1,130
|
|
|
|
1,292
|
|
|
|
Estimated business management incentive fees (4)
|
|
|
|
17,750
|
|
|
|
25,920
|
|
|
|
|
37,370
|
|
|
|
31,236
|
|
|
|
Loss on early extinguishment of debt (6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
70
|
Adjusted EBITDA
|
|
|
|
$
|
220,297
|
|
|
|
$
|
215,608
|
|
|
|
|
$
|
414,873
|
|
|
|
$
|
403,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes on pages 11 and 12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) At June 30, 2017, HPT owned 310 hotels; 307 of these hotels were
managed by hotel operating companies and three hotels were leased to
hotel operating companies. At June 30, 2017, HPT also owned 199 travel
centers; all 199 of these travel centers were leased to a travel center
operating company under five lease agreements. HPT’s condensed
consolidated statements of income include hotel operating revenues and
expenses of managed hotels and rental income from its leased hotels and
travel centers. The net operating results of HPT’s managed hotel
portfolios exceeded the minimum returns due to HPT in both the three
months ended June 30, 2017 and 2016. Certain of HPT's managed hotels had
net operating results that were, in the aggregate, $14,299 and $11,544
less than the minimum returns due to HPT in the six months ended
June 30, 2017 and 2016, 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 condensed consolidated statements of income as a
reduction of hotel operating expenses. There was no reduction to hotel
operating expenses in the three months ended June 30, 2017 or 2016 and
reductions of $3,716 and $1,766 in the six months ended June 30, 2017
and 2016, respectively, as a result of such fundings. 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 $10,583 and
$9,778 in the six months ended June 30, 2017 and 2016, respectively,
which represent the unguaranteed portions of HPT's minimum returns from
Sonesta. Certain of HPT’s managed hotel portfolios had net operating
results that were, in the aggregate, $36,559 and $43,440 more than the
minimum returns due to HPT in the three months ended June 30, 2017 and
2016, respectively, and $36,724 and $46,918 more than the minimum
returns due to HPT in the six months ended June 30, 2017 and 2016,
respectively. Certain guarantees to HPT and security deposits held by
HPT may be replenished by a share of these excess cash flows from the
applicable hotel operations pursuant to the terms of the respective
operating agreements or the guarantees. When these guarantees and
security deposits are replenished by cash flows from hotel operations,
HPT reflects such replenishments in its condensed consolidated
statements of income as an increase to hotel operating expenses. Hotel
operating expenses were increased by $14,682 and $20,057 in the three
months ended June 30, 2017 and 2016, respectively, and $13,240 and
$19,968 in the six months ended June 30, 2017 and 2016, respectively, as
a result of such replenishments.
(2) Rental income includes $3,113 and $3,693 in the three months ended
June 30, 2017 and 2016, respectively, and $6,121 and $7,445 in the six
months ended June 30, 2017 and 2016, 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.
(3) 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
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.
(4) 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 condensed consolidated statements of
income. In calculating net income in accordance with GAAP, HPT
recognizes estimated business management incentive fee expense, if any,
in the first, second and third quarters. Although HPT recognizes this
expense, if any, in the first, second and third quarters 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 business
management incentive fee expense amount for the year, if any, is
determined. Net income includes $17,750 and $25,920 of estimated
business management incentive fee expense in the three months ended
June 30, 2017 and 2016, respectively, and $37,370 and $31,236 of
estimated business management incentive fee expense in the six months
ended June 30, 2017 and 2016, respectively.
(5) Represents costs associated with HPT’s acquisition activities.
Acquisition costs incurred during the 2017 periods have been capitalized
in purchase accounting pursuant to a change in GAAP.
(6) HPT recorded a loss on early extinguishment of debt of $70 in the
six months ended June 30, 2016, in connection with the redemption of
certain senior unsecured notes.
(7) On February 10, 2017, HPT redeemed all 11,600,000 of its outstanding
7.125% Series D cumulative redeemable preferred shares at the stated
liquidation preference of $25.00 per share plus accrued and unpaid
distributions to the date of redemption (an aggregate of $291,435). The
liquidation preference of the redeemed shares exceeded the carrying
amount for the redeemed shares as of the date of redemption by $9,893,
or $0.06 per share, and HPT reduced net income available to common
shareholders in the six months ended June 30, 2017 by that excess amount.
(8) 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, if any, 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 business management
incentive fees, if any, only in the fourth quarter versus the quarter
when they are recognized as expense in accordance with GAAP due to their
quarterly volatility not necessarily being indicative of HPT’s core
operating performance and the uncertainty as to whether any such
business management incentive fees will be payable when all
contingencies for determining such fees are known at the end of the
calendar year, and HPT excludes excess of liquidation preference over
carrying value of preferred shares redeemed, acquisition related costs
expensed under GAAP and loss on early extinguishment of debt. HPT
considers FFO available for common shareholders and Normalized FFO
available for common shareholders to be appropriate supplemental
measures of operating performance for a REIT, along with net income, net
income available for common shareholders and operating income. HPT
believes that FFO available for common shareholders and Normalized FFO
available for common shareholders provide useful information to
investors because by excluding the effects of certain historical
amounts, such as depreciation expense, FFO available for common
shareholders and Normalized FFO available for common shareholders may
facilitate a comparison of HPT’s operating performance between periods
and with other REITs. FFO available for common shareholders and
Normalized FFO available for common shareholders 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 credit 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
or operating income as indicators of HPT’s operating performance or as
measures of HPT’s liquidity. These measures should be considered in
conjunction with net income, net income available for common
shareholders and operating income as presented in HPT’s condensed
consolidated statements of income. Other real estate companies and REITs
may calculate FFO available for common shareholders and Normalized FFO
available for common shareholders differently than HPT does.
(9) HPT calculates EBITDA and Adjusted EBITDA as shown above. HPT
considers EBITDA and Adjusted EBITDA to be appropriate supplemental
measures of its operating performance, along with net income, net income
available for common shareholders and operating income. HPT believes
that EBITDA and Adjusted EBITDA provide useful information to investors
because by excluding the effects of certain historical amounts, such as
interest, depreciation and amortization expense, EBITDA and Adjusted
EBITDA may facilitate a comparison of current operating performance with
HPT’s past operating performance. In calculating Adjusted EBITDA, HPT
includes business management incentive fees only in the fourth quarter
versus the quarter when they are recognized as expense in accordance
with GAAP due to their quarterly volatility not necessarily being
indicative of HPT’s core operating performance and the uncertainty as to
whether any such business management incentive fees will be payable when
all contingencies for determining such fees are known at the end of the
calendar year. EBITDA and Adjusted EBITDA do not represent cash
generated by operating activities in accordance with GAAP and should not
be considered alternatives to net income, net income available for
common shareholders or operating income as indicators of operating
performance or as measures of HPT’s liquidity. These measures should be
considered in conjunction with net income, net income available for
common shareholders and operating income as presented in HPT’s condensed
consolidated statements of income. Other real estate companies and REITs
may calculate EBITDA and Adjusted EBITDA differently than HPT does.
(10) Amounts represent the equity compensation for HPT’s trustees, its
officers and certain other employees of HPT’s manager.
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HOSPITALITY PROPERTIES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(Unaudited)
|
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|
|
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June 30,
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December 31,
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2017
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2016
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ASSETS
|
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Real estate properties:
|
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|
|
|
|
|
|
|
|
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Land
|
|
|
|
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$
|
1,627,010
|
|
|
|
|
|
$
|
1,566,630
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|
Buildings, improvements and equipment
|
|
|
|
|
7,487,816
|
|
|
|
|
|
7,156,759
|
|
Total real estate properties, gross
|
|
|
|
|
9,114,826
|
|
|
|
|
|
8,723,389
|
|
Accumulated depreciation
|
|
|
|
|
(2,647,568
|
)
|
|
|
|
|
(2,513,996
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)
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Total real estate properties, net
|
|
|
|
|
6,467,258
|
|
|
|
|
|
6,209,393
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Cash and cash equivalents
|
|
|
|
|
49,670
|
|
|
|
|
|
10,896
|
|
Restricted cash (FF&E reserve escrow)
|
|
|
|
|
58,911
|
|
|
|
|
|
60,456
|
|
Due from related persons
|
|
|
|
|
71,741
|
|
|
|
|
|
65,332
|
|
Other assets, net
|
|
|
|
|
325,868
|
|
|
|
|
|
288,151
|
|
Total assets
|
|
|
|
|
$
|
6,973,448
|
|
|
|
|
|
$
|
6,634,228
|
|
|
|
|
|
|
|
|
|
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|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility
|
|
|
|
|
$
|
278,000
|
|
|
|
|
|
$
|
191,000
|
|
Unsecured term loan, net
|
|
|
|
|
398,753
|
|
|
|
|
|
398,421
|
|
Senior unsecured notes, net
|
|
|
|
|
3,162,275
|
|
|
|
|
|
2,565,908
|
|
Convertible senior unsecured notes
|
|
|
|
|
—
|
|
|
|
|
|
8,478
|
|
Security deposits
|
|
|
|
|
120,757
|
|
|
|
|
|
89,338
|
|
Accounts payable and other liabilities
|
|
|
|
|
190,017
|
|
|
|
|
|
188,053
|
|
Due to related persons
|
|
|
|
|
43,448
|
|
|
|
|
|
58,475
|
|
Dividends payable
|
|
|
|
|
—
|
|
|
|
|
|
5,166
|
|
Total liabilities
|
|
|
|
|
4,193,250
|
|
|
|
|
|
3,504,839
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
Preferred shares of beneficial interest, no par value; 100,000,000
shares authorized:
|
|
|
|
|
|
|
|
|
|
|
Series D preferred shares; 7 1/8% cumulative redeemable; zero and
11,600,000 shares issued and outstanding, respectively, aggregate
liquidation preference of zero and $290,000, respectively
|
|
|
|
|
—
|
|
|
|
|
|
280,107
|
|
Common shares of beneficial interest, $.01 par value; 200,000,000
shares authorized; 164,282,700 and 164,268,199 shares issued and
outstanding, respectively
|
|
|
|
|
1,643
|
|
|
|
|
|
1,643
|
|
Additional paid in capital
|
|
|
|
|
4,540,414
|
|
|
|
|
|
4,539,673
|
|
Cumulative net income
|
|
|
|
|
3,192,744
|
|
|
|
|
|
3,104,767
|
|
Cumulative other comprehensive income
|
|
|
|
|
52,412
|
|
|
|
|
|
39,583
|
|
Cumulative preferred distributions
|
|
|
|
|
(343,412
|
)
|
|
|
|
|
(341,977
|
)
|
Cumulative common distributions
|
|
|
|
|
(4,663,603
|
)
|
|
|
|
|
(4,494,407
|
)
|
Total shareholders’ equity
|
|
|
|
|
2,780,198
|
|
|
|
|
|
3,129,389
|
|
Total liabilities and shareholders’ equity
|
|
|
|
|
$
|
6,973,448
|
|
|
|
|
|
$
|
6,634,228
|
|
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the Nasdaq.
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/20170809005275/en/
Source: Hospitality Properties Trust