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Hospitality Properties Trust, a REIT Owning 285 Hotels
in 38 states, Reports 4th Qtr Net income Dropped
to $35.9 million from $144.1 million Last Year
Hotel Operating Statistics

.

NEWTON, Mass. - Feb. 8, 2005--Hospitality Properties Trust (NYSE: HPT) today announced its results of operations for the quarter and year ended December 31, 2004, as follows:
 
 (amounts in thousands, except per share amounts)

                                   Quarter Ended        Year Ended
                                    December 31,        December 31,
                                --------------------------------------
                                  2004      2003       2004     2003
                                 -------  --------   -------- --------

Net income                       $35,856  $144,132   $127,091 $238,213

Net income available for common
 shareholders                    $33,942  $140,437   $114,624 $223,433

Funds from operations ("FFO")    $57,375  $ 61,807   $233,864 $233,075

Common distributions declared    $48,386  $ 45,063   $193,523 $180,242

Per common share amounts:

   Net income available for
    common shareholders          $  0.51  $   2.24   $   1.72 $   3.57

   Funds from operations ("FFO") $  0.85  $   0.99   $   3.52 $   3.72

   Common distributions declared $  0.72  $   0.72   $   2.88 $   2.88

   Weighted average common
    shares outstanding            67,203    62,587     66,503   62,576
 

The fourth quarter 2003 operating results include non-recurring gains from lease terminations of $107.5 million.

The 2004 operating results set forth above reflect the first year that 12 hotels owned by HPT were operated as Prime Hotels. These 12 Prime Hotels are operated under one management contract together with 24 AmeriSuites Hotels (i.e., for a total of 36 hotels under one contract). The hotels included in this contract are the only combination of hotels which HPT owns which reported a decline in RevPAR, or revenue per available room, during the 2004 fourth quarter and full year. During 2004, the operator of these 36 hotels, Prime Hospitality Corporation, was sold to Blackstone Group. Shortly after year end 2004, Blackstone Group transferred operating responsibility for these 36 hotels to Hyatt Corporation. Pursuant to guarantees given by Prime Hospitality and honored by Blackstone and Hyatt, the minimum returns due to HPT have continued to be timely paid. However, as a result of the 2004 RevPAR declines at the Prime hotels, the income and FFO which HPT realized from these hotels is less than HPT would have realized without such declines. HPT is currently having discussions with Hyatt Corporation concerning plans for these operations.

Hospitality Properties Trust is a real estate investment trust, or REIT, which owns 285 hotels located in 38 states. HPT is headquartered in Newton, Massachusetts.
 

Hospitality Properties Trust
CONSOLIDATED STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
(amounts in thousands, except per share data)

                                  Quarter Ended         Year Ended
                                   December 31,         December 31,
                                --------------------------------------
                                   2004      2003     2004      2003
                                -------- ---------  -------- ---------
Revenues:
     Hotel operating revenues
      (1)                       $119,342 $ 68,801  $498,122 $ 209,299
     Minimum rent                 30,343   55,874   125,669   216,125
     Percentage rent               2,803    1,128     2,803     1,128
     FF&E reserve income (2)       4,147    4,203    18,390    18,335
     Interest income                 199       63       384       398
     Gain on lease terminations
      (3)                             --  107,516        --   107,516
                                -------- ---------  -------- ---------
        Total revenues           156,834  237,585   645,368   552,801
                                -------- ---------  -------- ---------

Expenses:
     Hotel operating expenses
      (1) (4)                     74,602   48,695   333,818   145,863
     Interest (including
      amortization of deferred
      financing costs of $686,
      $683, $2,744 and $2,536,
      respectively)               12,618   12,626    50,393    44,536
     Depreciation and
      amortization                28,725   27,732   114,883   104,807
     General and administrative    5,033    4,400    19,386    16,800
     Loss on early
      extinguishment of debt (5)      --       --        --     2,582
                                -------- ---------  -------- ---------
        Total expenses           120,978   93,453   518,480   314,588
                                -------- ---------  -------- ---------

Income before gain on sale of
 real estate                      35,856  144,132   126,888   238,213
     Gain on sale of real estate      --       --       203        --
                                -------- ---------  -------- ---------

Net income                        35,856  144,132   127,091   238,213
Preferred distributions           (1,914)  (3,695)   (9,674)  (14,780)
Excess of liquidation preference
 over carrying value of
 preferred shares (6)                 --       --    (2,793)       --
                                -------- ---------  -------- ---------
Net income available for common
 shareholders                   $ 33,942 $140,437  $114,624 $ 223,433
                                ======== =========  ======== =========

----------------------------------------------------------------------

Calculation of FFO (7):
Net income available for common
 shareholders                    $33,942 $140,437  $114,624 $ 223,433
Add: FF&E deposits not in net
       income (2)                    421    2,004     1,767     9,769
     Depreciation and
      amortization                28,725   27,732   114,883   104,807
     Excess of liquidation
      preference over carrying
      value of preferred shares
      (6)                             --       --     2,793        --
     Loss on early extinguishment
      of debt (5)                     --       --        --     2,582
Less:Gain on sale of real estate      --       --      (203)       --
     Gain on lease terminations       -- (107,516)       --  (107,516)
     Deferred percentage rent (8) (2,167)    (850)       --        --
     Deferred hotel operating
      income (9)                  (3,546)      --        --        --
                                 ------- ---------  -------- ---------
Funds from operations ("FFO")    $57,375 $ 61,807  $233,864 $ 233,075
                                 ======= =========  ======== =========

----------------------------------------------------------------------
 

Weighted average common shares
 outstanding                      67,203   62,587    66,503    62,576
                                 ======= =========  ======== =========

Per common share amounts:
     Net income available for
      common shareholders        $  0.51 $   2.24  $   1.72 $    3.57
     FFO (7)                     $  0.85 $   0.99  $   3.52 $    3.72
     Common distributions
      declared                   $  0.72 $   0.72  $   2.88 $    2.88

----------------------------------------------------------------------
See Notes on page 4.
 

                     Hospitality Properties Trust
  NOTES TO CONSOLIDATED STATEMENT OF INCOME AND FUNDS FROM OPERATIONS
             (amounts in thousands, except per share data)
 

(1) As of December 31, 2004, each of our 285 hotels was included in
    one of eight combinations of hotels which are either leased to one
    of our taxable REIT subsidiaries and managed by an independent
    hotel operating company, or are leased to a third party. At
    December 31, 2004, we had 177 managed hotels and 108 leased
    hotels. Our consolidated statement of income includes hotel
    operating revenues and expenses of managed hotels, and only rental
    income from our leased hotels. The pro forma operating results for
    all 177 of our managed hotels assuming acquisition of the hotels
    and commencement of the management agreements as of January 1,
    2003, are as follows (includes amounts for periods prior to our
    ownership of some of these hotels and for periods when some of
    these hotels were leased by us to third parties different than the
    current operators):
                               Quarter Ended             Year Ended
                                 December 31,           December 31,
                              -----------------    -------------------
                               2004      2003         2004      2003
                              ------    ------       ------    ------
Hotel operating revenues     $119,342 $117,689     $510,124  $504,714
Hotel operating expenses       87,363   89,822      351,708   352,226
 

(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 subsidiary 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 additional rent. 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 recorded gains on lease termination in the 2003 fourth quarter
    as a result of the termination of our two leases with Wyndham
    International, Inc. and our lease with Candlewood Hotel Company,
    Inc.

(4) Certain of our managed hotels had net operating results that were
    less than the minimum returns due to us by $6,501 and $7,032 in
    the fourth quarter of 2004 and 2003, respectively, and $10,595 and
    $6,922 during the fiscal year 2004 and 2003, respectively. These
    amounts are included in our consolidated statement of income as a
    net reduction to hotel operating expenses in each period because
    the minimum returns were funded by our managers.

(5) The loss on the early extinguishment of debt resulted from the
    write off of unamortized deferred financing costs of that debt.

(6) On April 12, 2004, we redeemed all of our outstanding 9 1/2%
    Series A Preferred Shares at their liquidation preference of $25
    per share, plus accumulated and unpaid dividends. We deducted the
    $2,793 excess of the liquidation preference of the redeemed shares
    over their carrying amount from net income in determining net
    income available to common shareholders in the calculation of
    earnings per share.

(7) 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 8) and
    deferred hotel operating income (see note 9) and exclude the
    excess of liquidation preference over carrying value of redeemed
    preferred shares (see note 6), the loss on early extinguishment of
    debt not settled in cash (see note 5) and gain on lease
    terminations (see note 3). 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 and losses on early extinguishment of debt,
    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
    performance.

(8) In calculating net income we recognize percentage rental income
    received for the first, second and third quarters in the fourth
    quarter when all contingencies are met and the income is earned.
    Although we defer recognition of this revenue for purposes of
    calculating net income, we include these amounts in the
    calculation of FFO during the first three quarters of the year.

(9) Our rights to share in the operating results of our managed hotels
    in excess of the minimum returns due to us are generally
    determined based upon annual calculations. For fiscal year 2004
    our share of these operating results was $1,397 and we recognized
    this income in the fourth quarter of 2004 when all contingencies
    were met and the income was earned. Although we deferred
    recognition of this income for purposes of calculating net income
    during the first three quarters of 2004, the calculation of FFO
    for these periods included our share of operating results in
    excess of minimum returns of $3,546. Our share of these operating
    results declined by $2,149 during the fourth quarter of 2004 as
    the operating results of certain of our managed hotels were less
    than the minimum returns due to us for the quarter.
 

                     Hospitality Properties Trust
 

                        Key Balance Sheet Data
                        ----------------------
                            (in thousands)
 

                                                  Dec. 31,    Dec. 31,
                                                    2004        2003
                                                ----------  ----------

Cash                                            $   15,894  $    6,428
                                                ==========  ==========

Restricted cash (FF&E Reserve escrow)           $   38,511  $   55,755
                                                ==========  ==========

Real Estate, at cost                            $3,180,990  $3,179,507
                                                ==========  ==========

Debt, net of discounts
     Floating rate - Credit Facility, due 2005  $   72,000  $  201,000
     Fixed rate - 7.00% Senior Notes, due 2008     149,914     149,888
     Fixed rate - 9.125% Senior Notes, due 2010     49,966      49,960
     Fixed rate - 8.3% Mortgage payable, due
      2011                                           3,826       3,881
     Fixed rate - 6.85% Senior Notes, due 2012     124,330     124,240
     Fixed rate - 6.75% Senior Notes, due 2013     297,469     297,157
                                                ----------  ----------

     Total Debt                                 $  697,505  $  826,126
                                                ==========  ==========

Equity
     9.5% Series A Preferred (none and 3,000,000
      shares outstanding)                       $       --  $   72,207
     8.875% Series B Preferred (3,450,000 shares
      outstanding)                                  83,306      83,306
     Common (67,203,228 and 62,587,079 shares
      outstanding)                               1,602,567   1,490,015
                                                ----------  ----------

     Total Equity                               $1,685,873  $1,645,528
                                                ==========  ==========

======================================================================
                           Additional Data
                  (in thousands except percentages)
----------------------------------------------------------------------

                                                Dec. 31,     Dec. 31,
                                                  2004         2003
                                               -----------  ----------
Leverage Ratios
---------------

Total Debt / Total Assets                         25.9%        29.9%
Total Debt / Real Estate, at cost                 21.9%        26.0%
Total Debt / Total Book Capitalization            29.3%        33.4%
Variable Rate Debt / Total Book Capitalization     3.0%         8.1%

                                                Year Ended  Year Ended
                                                  Dec. 31,    Dec. 31,
                                                    2004        2003
                                                ----------  ----------
Cash Flow Data
--------------

Cash flow provided by (used in):
     Operating activities                     $  223,119   $  219,405
     Investing activities                     $   (2,462)  $ (371,610)
     Financing activities                     $ (211,191)  $  151,296
 
 
 

Hospitality Properties Trust

                          Hotel Revenue Data
                          ------------------

The following tables summarize the hotel operating statistics reported
to us by our third party tenants and managers for our 285 hotels.

                                                   Quarter Ended
                                       No. of       December 31,
Lease/                         No. of  Rooms/ ------------------------
Management Agreement           Hotels  Suites 2004(1)  2003(1) Change
--------------------          ------- ------- ------- -------- -------
ADR
---
Host (no. 1)                       53  7,610  $101.24 $ 94.76   6.8%
Host (no. 2)                       18  2,178    96.60   92.99   3.9%
Marriott                           35  5,382    93.69   88.63   5.7%
Barcelo Crestline                  19  2,756    94.94   87.45   8.6%
InterContinental (no. 1) (2)(3)    30  3,694    88.73   87.78   1.1%
InterContinental (no. 2) (2)(3)    76  9,220    55.77   53.80   3.7%
Prime (3)(4)                       36  5,250    70.70   70.38   0.5%
Homestead                          18  2,399    51.16   47.08   8.7%
                                ------------- ------------------------
Total/Average                     285 38,489  $ 81.84 $ 77.65   5.4%

OCCUPANCY
---------
Host (no. 1)                       53  7,610     68.4%   63.1%  5.3 pt
Host (no. 2)                       18  2,178     77.8%   73.9%  3.9 pt
Marriott                           35  5,382     73.3%   70.9%  2.4 pt
Barcelo Crestline                  19  2,756     69.6%   68.5%  1.1 pt
InterContinental (no. 1) (2)(3)    30  3,694     69.8%   66.9%  2.9 pt
InterContinental (no. 2) (2)(3)    76  9,220     70.9%   68.6%  2.3 pt
Prime (3)(4)                       36  5,250     54.3%   60.5% -6.2 pt
Homestead                          18  2,399     75.3%   73.6%  1.7 pt
                                ------------- ------------------------
Total/Average                     285 38,489     69.1%   67.2%  1.9 pt

RevPAR
------
Host (no. 1)                       53  7,610  $ 69.25 $ 59.79  15.8%
Host (no. 2)                       18  2,178    75.15   68.72   9.4%
Marriott                           35  5,382    68.67   62.84   9.3%
Barcelo Crestline                  19  2,756    66.08   59.90  10.3%
InterContinental (no. 1) (2)(3)    30  3,694    61.93   58.72   5.5%
InterContinental (no. 2) (2)(3)    76  9,220    39.54   36.91   7.1%
Prime (3)(4)                       36  5,250    38.39   42.58  -9.8%
Homestead                          18  2,399    38.52   34.65  11.2%
                                ------------- ------------------------
Total/Average                     285 38,489  $ 56.55 $ 52.18   8.4%
 
 

                                                    Year Ended
                                       No. of      December 31,
Lease/                         No. of  Rooms/ ------------------------
Management Agreement           Hotels  Suites 2004(1)  2003(1) Change
--------------------          ------- ------- ------- -------- -------
ADR
---
Host (no. 1)                       53  7,610  $100.38 $ 95.51   5.1%
Host (no. 2)                       18  2,178    94.86   93.32   1.7%
Marriott                           35  5,382    94.71   91.19   3.9%
Barcelo Crestline                  19  2,756    92.26   88.44   4.3%
InterContinental (no. 1) (2)(3)    30  3,694    89.65   89.99  -0.4%
InterContinental (no. 2) (2)(3)    76  9,220    55.97   54.77   2.2%
Prime (3)(4)                       36  5,250    73.49   70.13   4.8%
Homestead                          18  2,399    50.14   47.72   5.1%
                                ------------- ------------------------
Total/Average                     285 38,489  $ 80.42 $ 77.20   4.2%

OCCUPANCY
---------
Host (no. 1)                       53  7,610     71.3%   64.0%  7.3 pt
Host (no. 2)                       18  2,178     79.3%   76.6%  2.7 pt
Marriott                           35  5,382     76.3%   73.9%  2.4 pt
Barcelo Crestline                  19  2,756     73.8%   69.0%  4.8 pt
InterContinental (no. 1) (2)(3)    30  3,694     75.3%   74.2%  1.1 pt
InterContinental (no. 2) (2)(3)    76  9,220     71.2%   72.0% -0.8 pt
Prime (3)(4)                       36  5,250     61.5%   67.9% -6.4 pt
Homestead                          18  2,399     79.2%   75.9%  3.3 pt
                                ------------- ------- ----------------
Total/Average                     285 38,489     72.1%   70.6%  1.5 pt

RevPAR
------
Host (no. 1)                       53  7,610  $ 71.57 $ 61.13  17.1%
Host (no. 2)                       18  2,178    75.22   71.48   5.2%
Marriott                           35  5,382    72.26   67.39   7.2%
Barcelo Crestline                  19  2,756    68.09   61.02  11.6%
InterContinental (no. 1) (2)(3)    30  3,694    67.51   66.77   1.1%
InterContinental (no. 2) (2)(3)    76  9,220    39.85   39.43   1.1%
Prime (3)(4)                       36  5,250    45.20   47.62  -5.1%
Homestead                          18  2,399    39.71   36.22   9.6%
                                -------------  ------- ---------------
Total/Average                     285 38,489  $ 57.98 $ 54.50   6.4%
 
 

(1) Includes data for the calendar periods indicated, except for our
    Courtyard by Marriott(R), Residence Inn by Marriott(R), Marriott
    Hotels Resorts and Suites(R), TownePlace Suites by Marriott(R),
    and SpringHill Suites by Marriott(R) branded hotels, which include
    data for comparable fiscal periods.

(2) 2003 includes data for periods prior to our ownership of some
    hotels.

(3) 2003 includes data for periods some hotels were operated by a
    different manager than in 2004.

(4) Prime transferred its management agreement to a subsidiary of
    Hyatt Corporation in January 2005.
 
 

                     Rent/Return Coverage Data(1)
                     ---------------------------

                               Quarter ended  Year ended   Year ended
Lease/Management Agreement        12/31/04     12/31/04     12/31/03
---------------------------    ------------- ------------ ------------

Host (no. 1)                        1.2x         1.3x         1.0x
Host (no. 2)                        1.1x         1.0x         1.0x
Marriott                            0.8x         0.9x         0.8x
Barcelo Crestline                   0.8x         0.9x         0.7x
InterContinental (no. 1)            0.5x         0.8x         0.7x
InterContinental (no. 2)            0.8x         0.8x         0.8x
Prime (2)                           0.7x         1.1x         1.0x
Homestead                           1.2x         1.2x         1.1x
                              -------------- ------------ ------------
Range (all agreements)          0.5x-1.2x     0.8x-1.3x    0.7x-1.1x
 

(1) We define coverage as combined total hotel sales minus all
    expenses which are not subordinated to minimum payments to us and
    the required FF&E Reserve contributions (which data is provided to
    us by our tenants or operators), divided by the minimum rent or
    fixed amount return payments due to us. For some combinations,
    amounts have been calculated using data for periods prior to our
    ownership of some hotels and prior to commencement of operating
    agreements.

(2) Prime transferred its management agreement to a subsidiary of
    Hyatt Corporation in January 2005.
 

THIS PRESS RELEASE INCLUDES 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 PRESENT BELIEFS AND EXPECTATIONS, BUT THEY MAY NOT OCCUR. FOR EXAMPLE, THIS PRESS RELEASE STATES THAT HPT IS CURRENTLY HAVING DISCUSSIONS WITH HYATT CORPORATION CONCERNING PLANS FOR THE FUTURE OPERATIONS OF THE 24 AMERISUITES HOTELS AND 12 PRIME HOTELS OWNED BY HPT. ONE POSSIBLE IMPLICATION OF THIS STATEMENT IS THAT THE REVPAR DECLINE EXPERIENCED AT THESE 36 HOTELS DURING 2004 MAY CEASE OR REVERSE. IN FACT, HOWEVER, HYATT MAY BE UNWILLING OR UNABLE TO MAKE CHANGES IN THESE OPERATIONS WHICH IMPROVE THEIR REVPAR AND THE PROFITS REALIZED BY HPT AT THESE HOTELS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON THESE FORWARD LOOKING STATEMENTS.

Contact:

Hospitality Properties Trust
     Timothy A. Bonang
Manager of Investor Relations
     John G. Murray
President
617-964-8389
www.hptreit.com

Also See: Hospitality Properties Trust Acquiring 13 Hotels for $450 million from InterContinental Hotels Group; Includes 4 InterContinental Hotels / December 2004
HPT Completes Purchase of 12 Candlewood Hotels for $90 Million and a New Management Agreement with InterContinental Hotels Group / January 2004
Hospitality Properties Trust Contracts with Prime Hospitality Corp. to Operate 36 Hotels Under One Management Contract; 24 AmeriSuites Remain AmeriSuites and 12 Former Wyndham Hotels will Be Branded Prime Hotels / December 2003


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