NEWTON,
Mass.--(BUSINESS WIRE)-- Hospitality Properties
Trust (NYSE: HPT) today announced its financial results for the quarter
and
nine months ended September 30, 2011.
Results for
the Quarter Ended September 30, 2011:
Normalized
funds from operations, or Normalized FFO, for the
quarter ended September 30, 2011 were $98.0 million, or $0.79 per
share,
compared to Normalized FFO for the quarter ended September 30, 2010 of
$101.1
million, or $0.82 per share.
Net income
available for common shareholders was $40.1
million, or $0.32 per share, for the quarter ended September 30, 2011,
compared
to $42.8 million, or $0.35 per share, for the same quarter last year.
The
weighted average number of common shares outstanding was
123.5 million and 123.4 million for the quarters ended September 30,
2011 and
2010, respectively.
A
reconciliation of net income available for common
shareholders determined according to U.S. generally accepted accounting
principles, or GAAP, to funds from operations, or FFO, and Normalized
FFO for
the quarters ended September 30, 2011 and 2010 appears later in this
press
release.
Results for
the Nine Months Ended September 30, 2011:
Normalized
FFO for the nine months ended September 30, 2011
were $310.7 million, or $2.52 per share, compared to Normalized FFO for
the
nine months ended September 30, 2010 of $295.4 million, or $2.39 per
share.
Net income
available for common shareholders was $129.8
million, or $1.05 per share, for the nine months ended September 30,
2011,
compared to $91.9 million, or $0.74 per share, for the same period last
year.
Net income available for common shareholders for the nine months ended
September 30, 2011 includes a $7.3 million, or $0.06 per share, loss on
asset
impairment. Net income available for common shareholders for the nine
months
ended September 30, 2010 includes a $6.7 million, or $0.05 per share,
loss on
extinguishment of debt and a $16.4 million, or a $0.13 per share, loss
on asset
impairment.
The
weighted average number of common shares outstanding was
123.5 million and 123.4 million for the nine months ended
September 30,
2011 and 2010, respectively.
A
reconciliation of net income available for common
shareholders determined according to GAAP to FFO and Normalized FFO for
the
nine months ended September 30, 2011 and 2010 appears later in this
press
release.
Hotel
Portfolio Performance:
For the
quarter ended September 30, 2011 compared to the
same period in 2010: average daily rate, or ADR, increased 4.1% to
$93.24;
occupancy increased 2.6 percentage points to 77.0%; and, as a result,
revenue
per available room, or RevPAR, increased by 7.7% to $71.79.
For the
nine months ended September 30, 2011 compared to the
same period in 2010: ADR increased 3.3% to $93.57; occupancy increased
3.0
percentage points to 73.6%; and, as a result, RevPAR increased by 7.6%
to
$68.87.
Tenants and
Managers:
Marriott
No. 234.
During the three months ended September 30, 2011, the payments HPT
received
under its management contract with Marriott International, Inc. (NYSE:
MAR), or
Marriott, covering 71 hotels and requiring minimum returns to HPT of
$98.4
million/year (referred to as the Marriott No. 234 agreement) were $2.8
million
less than the minimum amounts contractually required. HPT applied
available
security deposits to cover these shortfalls. At September 30, 2011, the
available security deposit which HPT held to cover future payment
shortfalls
was $0.2 million. Also, Marriott has guaranteed that it will pay up to
$40.0
million to cover up to 90% of the minimum returns due to HPT whenever
the
security deposit is depleted.
InterContinental.
During the three months ended September 30, 2011, the payments HPT
received
under its management contract with InterContinental Hotels Group, plc
(LON:
IHG; NYSE: IHG (ADRs)), or InterContinental, covering 130 hotels and
requiring
minimum returns to HPT of $153.1 million/year (referred to as the
InterContinental agreement) were $0.4 million less than the minimum
amounts
contractually required. HPT applied available security deposits to
cover these
shortfalls. At September 30, 2011, the available security deposit which
HPT
held to cover future payment shortfalls was $64.2 million.
Both the
Marriott and InterContinental security deposits may
be replenished from certain percentages of future cash flows which
exceed HPT's
minimum returns, if any.
As of
September 30, 2011, all other payments due to HPT from
its managers and tenants under its operating agreements were current.
Acquisitions
and Dispositions:
As
previously announced, HPT is planning to sell 21 Marriott
hotels included in the Marriott No. 234 portfolio. The 21 hotels
include nine
TownePlace Suites hotels, six Residence Inn hotels, five Courtyard
hotels and
one Marriott hotel. As of September 30, 2011, the net book value, after
previously reported impairment writedowns, for these hotels was
approximately
$131.4 million. HPT has begun the sales process for these 21 hotels and
expects
to complete the sales in the first half of 2012. HPT will retain the
net sales
proceeds from any hotels sold and the amount of minimum returns due
from
Marriott under the Marriott No. 234 agreement will be reduced by 9% per
annum
of the net sales proceeds. However, because it has not yet contracted
for these
sales, HPT cannot provide any assurance that it will sell any of these
21
hotels.
As
previously announced, as part of its re-alignment
agreement with InterContinental, HPT and InterContinental agreed that
HPT may
sell or rebrand up to 43 hotels. In July 2011, HPT sold one of these
hotels for
net proceeds of $6.9 million, the amount equal to its previously
impaired
carrying value. HPT is currently evaluating plans to either sell or
rebrand the
remaining 42 hotels. As of September 30, 2011, the net book value,
after
previously reported impairment writedowns, for these 42 hotels was
approximately $368.0 million. If these hotels are sold, HPT will retain
the net
sales proceeds and reduce the amount of minimum returns due from
InterContinental by 8% per annum; if these hotels are rebranded, the
amount of
the minimum returns due from InterContinental will be reduced by agreed
amounts
per hotel; and, if HPT determines to retain these hotels under
InterContinental
management, HPT will invest certain previously agreed amounts to
improve these
hotels. HPT has begun discussions about selling or rebranding certain
of these
hotels; however, HPT cannot provide any assurance that it will sell or
rebrand
any of these 42 hotels at this time.
Recent
Financing Activities:
On
September 8, 2011, HPT entered a new $750.0 million
unsecured revolving credit facility that is available for acquisitions,
working
capital and general business purposes. The new facility replaces HPT's
previous
$750.0 million unsecured revolving credit facility, which had a
maturity date
of October 24, 2011. The maturity date of the new facility is September
7,
2015, and, subject to the payment of an extension fee and meeting
certain other
conditions, includes an option for HPT to extend the facility for one
year to
September 7, 2016. Interest paid under the new facility is set at LIBOR
plus
130 basis points, subject to adjustments based on HPT's credit ratings.
Conference
Call:
On Monday,
November 7, 2011, at 1:00 p.m. Eastern Standard
Time, John Murray, President and Chief Operating Officer, and Mark
Kleifges,
Treasurer and Chief Financial Officer, will host a conference call to
discuss
the results for the quarter and nine months ended September 30, 2011.
The
conference call telephone number is (877) 531-2986. Participants
calling from
outside the United States and Canada should dial (612) 332-0636. No
passcode 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 beginning on Tuesday, November 8th
and will run through Monday, November 14, 2011. To hear the replay,
dial (320)
365-3844. The replay passcode is 218265.
A live
audio webcast of the conference call will also be
available in a listen only mode on our website, which is located at www.hptreit.com. Participants
wanting to
access the webcast should visit our 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 recording and retransmission in any way of
HPT's
third quarter conference call is strictly prohibited without the prior
written
consent of HPT.
Supplemental
Data:
A copy of
HPT's Third Quarter 2011 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 288 hotels and 185 travel centers located in
44
states, Puerto Rico and Canada. HPT is headquartered in Newton, MA.
Hospitality
Properties Trust
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
AND
NORMALIZED FUNDS FROM OPERATIONS
|
(in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
operating revenues (1)
|
|
$
|
242,995
|
|
$
|
193,626
|
|
$
|
670,867
|
|
$
|
558,900
|
|
Rental
income (1)
|
|
|
72,305
|
|
|
81,695
|
|
|
230,078
|
|
|
241,774
|
|
FF&E
reserve income (2)
|
|
|
3,389
|
|
|
5,877
|
|
|
13,537
|
|
|
17,023
|
|
|
Total
revenues
|
|
|
318,689
|
|
|
281,198
|
|
|
914,482
|
|
|
817,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
operating expenses (1)
|
|
|
168,278
|
|
|
128,601
|
|
|
450,845
|
|
|
364,058
|
|
Depreciation
and amortization
|
|
|
57,106
|
|
|
57,997
|
|
|
171,050
|
|
|
179,260
|
|
General and
administrative
|
|
|
11,292
|
|
|
10,082
|
|
|
30,746
|
|
|
29,396
|
|
Acquisition
related costs (3)
|
|
|
387
|
|
|
-
|
|
|
1,150
|
|
|
-
|
|
Loss on
asset impairment (4)
|
|
|
-
|
|
|
-
|
|
|
7,263
|
|
|
16,384
|
|
|
Total
expenses
|
|
|
237,063
|
|
|
196,680
|
|
|
661,054
|
|
|
589,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
81,626
|
|
|
84,518
|
|
|
253,428
|
|
|
228,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
11
|
|
|
33
|
|
|
54
|
|
|
216
|
|
Interest
expense (including amortization of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing
costs and debt discounts of $1,614,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,488,
$4,623 and $5,629 respectively)
|
|
|
(33,513)
|
|
|
(33,475)
|
|
|
(100,183)
|
|
|
(105,367)
|
|
Loss on
extinguishment of debt (5)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(6,720)
|
|
Equity in
earnings (losses) of an investee
|
|
|
28
|
|
|
34
|
|
|
111
|
|
|
(17)
|
Income
before income taxes
|
|
|
48,152
|
|
|
51,110
|
|
|
153,410
|
|
|
116,711
|
|
Income tax
expense
|
|
|
(621)
|
|
|
(878)
|
|
|
(1,188)
|
|
|
(2,404)
|
Net income
|
|
|
47,531
|
|
|
50,232
|
|
|
152,222
|
|
|
114,307
|
|
Preferred
distributions
|
|
|
(7,470)
|
|
|
(7,470)
|
|
|
(22,410)
|
|
|
(22,410)
|
Net income
available for common shareholders
|
|
$
|
40,061
|
|
$
|
42,762
|
|
$
|
129,812
|
|
$
|
91,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation
of Funds from Operations (FFO) and Normalized FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
available for common shareholders
|
|
$
|
40,061
|
|
$
|
42,762
|
|
$
|
129,812
|
|
$
|
91,897
|
Add:
|
Depreciation
and amortization
|
|
|
57,106
|
|
|
57,997
|
|
|
171,050
|
|
|
179,260
|
FFO (6)
|
|
|
97,167
|
|
|
100,759
|
|
|
300,862
|
|
|
271,157
|
Add:
|
Deferred
percentage rent (7)
|
|
|
481
|
|
|
375
|
|
|
1,417
|
|
|
1,163
|
|
Acquisition
related costs (3)
|
|
|
387
|
|
|
-
|
|
|
1,150
|
|
|
-
|
|
Loss on
asset impairment (4)
|
|
|
-
|
|
|
-
|
|
|
7,263
|
|
|
16,384
|
|
Loss on
extinguishment of debt (5)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,720
|
Normalized
FFO (6)
|
|
$
|
98,035
|
|
$
|
101,134
|
|
$
|
310,692
|
|
$
|
295,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
123,465
|
|
|
123,399
|
|
|
123,453
|
|
|
123,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common
share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
available for common shareholders
|
|
$
|
0.32
|
|
$
|
0.35
|
|
$
|
1.05
|
|
$
|
0.74
|
|
FFO (6)
|
|
$
|
0.79
|
|
$
|
0.82
|
|
$
|
2.44
|
|
$
|
2.20
|
|
Normalized
FFO (6)
|
|
$
|
0.79
|
|
$
|
0.82
|
|
$
|
2.52
|
|
$
|
2.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes
on page 6
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
At
September 30, 2011, we owned 288 hotels; 233 of these hotels are leased
to our taxable REIT subsidiaries and managed by independent hotel
operating companies and 55 are leased to third parties. Our 185 travel
centers are leased under two lease agreements. Our Condensed
Consolidated Statements of Income include hotel operating revenues and
expenses of managed hotels and rental income from our leased hotels and
travel centers. Our managed hotel portfolios had net operating results
that were, in the aggregate, $6,653 and $18,573 less than the minimum
returns due to us in the three months ended September 30, 2011 and
2010, respectively, and $37,875 and $59,322 less than the minimum
returns due to us in the nine months ended September 30, 2011 and 2010,
respectively. We reflect these amounts in our Condensed Consolidated
Statements of Income as a reduction to hotel operating expenses when
the minimum returns are funded by the managers of these hotels under
the terms of our operating agreements or applied from the security
deposits we hold.
|
(2)
|
|
|
Various
percentages of total sales at our hotels are escrowed as reserves for
future renovations or refurbishment, or FF&E reserve escrows. We
own all the FF&E escrows for our hotels. We report deposits by our
third party tenants into the escrow accounts as FF&E reserve
income. We do not report the amounts which are escrowed as FF&E
reserves for our managed hotels as FF&E reserve income.
|
(3)
|
|
|
Represents
costs associated with a potential acquisition of hotel properties.
|
(4)
|
|
|
In
connection with a decision to pursue the sale of four of our
InterContinental branded hotels, we recorded a $16,384, or $0.13 per
share, loss on asset impairment in the second quarter of 2010 to reduce
the carrying value of these hotels to their estimated fair value less
costs to sell. We further decreased the carrying values of these four
hotels during the three months ended June 30, 2011, and recorded a $315
loss on asset impairment. In connection with our decision to sell 21
hotels as part of our June 2011 agreement with Marriott, we recorded a
$3,081, or $0.02 per share, loss on asset impairment in the second
quarter of 2011 to reduce the carrying value of 14 of these hotels to
their estimated fair value less costs to sell. Also, in performing our
periodic evaluation of real estate assets for impairment during the
second quarter of 2011, we revised our value assumptions regarding one
InterContinental branded hotel that we are considering selling as part
of our July 2011 agreement with InterContinental. As a result, we
recorded a $3,867, or $0.03 per share, loss on asset impairment during
the second quarter of 2011 to reduce the carrying value of that hotel
to its estimated fair value.
|
(5)
|
|
|
During the
second quarter of 2010, we recorded a $6,720, or $0.05 per share, loss
on the extinguishment of debt relating to our repurchase of $185,696
face amount of our 3.8% convertible senior notes due 2027 for an
aggregate purchase price of $185,626, excluding accrued interest. The
loss on extinguishment of debt is net of unamortized issuance costs and
discounts of $7,260 and $588 of transaction costs, net of the equity
component of the notes of $1,058.
|
(6)
|
|
|
We
calculate FFO and Normalized FFO as shown above. FFO is calculated on
the basis defined by The National Association of Real Estate Investment
Trusts, or NAREIT, which is net income, calculated in accordance with
GAAP excluding gain or loss on sale of properties, plus real estate
depreciation and amortization. Our calculation of Normalized FFO
differs from NAREIT FFO because we include percentage rent and exclude
loss on early extinguishment of debt, impairment of assets and
acquisition related costs in and from our calculation of Normalized
FFO. We consider FFO and Normalized FFO to be appropriate measures of
performance for a REIT, along with net income and cash flow from
operating, investing and financing activities. We believe that FFO and
Normalized FFO provides useful information to investors because by
excluding the effects of certain historical amounts, such as
depreciation expense, FFO and Normalized FFO can facilitate a
comparison of operating performances between periods. FFO and
Normalized FFO are among the factors considered by our Board of
Trustees when determining the amount of distributions to our
shareholders. Other factors include, but are not limited to,
requirements to maintain our status as a REIT, limitations in our
revolving credit facility and public debt covenants, the availability
of debt and equity capital to us and our expectation of our future
capital requirements and operating performance. FFO and Normalized FFO
do not represent cash generated by operating activities in accordance
with GAAP and should not be considered as alternatives to net income or
cash flow from operating activities, determined in accordance with
GAAP, as indicators of our financial performance or liquidity, nor are
these measures necessarily indicative of sufficient cash flow to fund
all of our needs. We believe that in order to facilitate a clearer
understanding of our consolidated historical operating results, these
measures should be considered in conjunction with net income, net
income available to common shareholders and cash flow from operating
activities as presented in our Condensed Consolidated Statements of
Income and Condensed Consolidated Statements of Cash Flows. Other REITs
and real estate companies may calculate FFO and Normalized FFO
differently than we do.
|
(7)
|
|
|
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 these estimated amounts in the
calculation of Normalized FFO for each quarter of the year. The fourth
quarter Normalized FFO calculation excludes the amounts recognized
during the first three quarters.
|
|
|
|
|
|
Hospitality
Properties Trust
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands, except share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
properties:
|
|
|
|
|
|
|
|
Land
|
$
|
1,361,557
|
|
$
|
1,389,594
|
|
|
Buildings,
improvements and equipment
|
|
4,711,158
|
|
|
4,909,488
|
|
|
|
|
|
|
|
6,072,715
|
|
|
6,299,082
|
|
Accumulated
depreciation
|
|
(1,322,255)
|
|
|
(1,370,592)
|
|
|
|
|
|
|
|
4,750,460
|
|
|
4,928,490
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties
held for sale
|
|
131,361
|
|
|
7,125
|
|
Cash and
cash equivalents
|
|
6,487
|
|
|
4,882
|
|
Restricted
cash (FF&E reserve escrow)
|
|
41,747
|
|
|
80,621
|
|
Other
assets, net
|
|
181,014
|
|
|
171,168
|
|
|
|
|
|
|
$
|
5,111,069
|
|
$
|
5,192,286
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving
credit facility
|
$
|
115,000
|
|
$
|
144,000
|
|
Senior
notes, net of discounts
|
|
1,887,508
|
|
|
1,886,356
|
|
Convertible
senior notes, net of discounts
|
|
78,480
|
|
|
77,484
|
|
Mortgage
payable
|
|
-
|
|
|
3,383
|
|
Security
deposits
|
|
115,036
|
|
|
105,859
|
|
Accounts
payable and other liabilities
|
|
75,380
|
|
|
107,297
|
|
Due to
related persons
|
|
12,619
|
|
|
2,912
|
|
Dividends
payable
|
|
4,754
|
|
|
4,754
|
|
|
Total
liabilities
|
|
2,288,777
|
|
|
2,332,045
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
Series C
preferred shares; 7% cumulative redeemable;
|
|
|
|
|
|
|
|
|
|
12,700,000
shares issued and outstanding, aggregate
|
|
|
|
|
|
|
|
|
|
liquidation
preference $317,500
|
|
306,833
|
|
|
306,833
|
|
|
Common
shares of beneficial interest, $.01 par value;
|
|
|
|
|
|
|
|
|
150,000,000
shares authorized; 123,521,535 and
|
|
|
|
|
|
|
|
|
123,444,235
shares issued and outstanding, respectively
|
|
1,235
|
|
|
1,234
|
|
|
Additional
paid in capital
|
|
3,463,534
|
|
|
3,462,169
|
|
|
Cumulative
net income
|
|
2,194,735
|
|
|
2,042,513
|
|
|
Cumulative
other comprehensive income (loss)
|
|
(242)
|
|
|
2,231
|
|
|
Cumulative
preferred distributions
|
|
(205,811)
|
|
|
(183,401)
|
|
|
Cumulative
common distributions
|
|
(3,021,298)
|
|
|
(2,854,644)
|
|
|
|
Total
shareholders' equity
|
|
2,822,292
|
|
|
2,860,241
|
|
|
|
|
|
|
$
|
5,111,069
|
|
$
|
5,192,286
|
|
|
|
|
|
|
|
|
|
|
|
WARNING
CONCERNING FORWARD LOOKING
STATEMENTS
THE
FOREGOING PRESS RELEASE CONTAINS FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT
OF 1995 AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS AND
THEIR
IMPLICATIONS ARE BASED UPON HPT'S CURRENT BELIEFS AND EXPECTATIONS.
HOWEVER,
THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT
GUARANTEED TO
OCCUR AND THEY MAY NOT OCCUR FOR VARIOUS REASONS, SOME OF WHICH ARE
BEYOND
HPT'S CONTROL. FOR EXAMPLE:
- THIS PRESS
RELEASE STATES THAT HPT IS HOLDING AND HAS APPLIED OR MAY CONTINUE TO
APPLY SECURITY DEPOSITS TO COVER THE SHORTFALL OF THE PAYMENTS IT HAS
RECEIVED OR EXPECTS TO RECEIVE UNDER ITS HOTEL CONTRACTS COMPARED TO
THE MINIMUM PAYMENTS DUE TO HPT UNDER THESE CONTRACTS. THE SECURITY
DEPOSITS WHICH HPT IS HOLDING ARE IN LIMITED AMOUNTS. THERE CAN BE NO
ASSURANCE REGARDING THE AMOUNTS OF PAYMENTS HPT MAY RECEIVE IN THE
FUTURE UNDER ITS CONTRACTS AND FUTURE SHORTFALLS MAY EXCEED THE AMOUNTS
OF THE SECURITY DEPOSITS HPT HOLDS. MOREOVER, THESE SECURITY DEPOSITS
ARE NOT ESCROWED OR OTHERWISE SEGREGATED FROM HPT'S OTHER ASSETS AND
LIABILITIES; ACCORDINGLY, WHEN HPT APPLIES THESE SECURITY DEPOSITS TO
COVER MINIMUM PAYMENTS DUE, IT WILL RECORD INCOME BUT IT WILL NOT
RECEIVE ANY CASH.
- THIS PRESS
RELEASE STATES THAT HPT EXPECTS MARRIOTT TO FUND MINIMUM PAYMENT
SHORTFALLS UNDER THE TERMS OF A LIMITED GUARANTY. THIS STATEMENT
IMPLIES MARRIOTT WILL BE ABLE OR WILLING TO FULFILL ITS OBLIGATION
UNDER THIS GUARANTY IN THE FUTURE AND THAT FUTURE SHORTFALLS WILL NOT
EXCEED THE GUARANTY CAP. HPT CAN PROVIDE NO ASSURANCE WITH REGARD TO
MARRIOTT'S FUTURE ACTIONS OR THE FUTURE PERFORMANCE OF ITS HOTELS.
- THIS PRESS
RELEASE STATES THAT HPT IS CURRENTLY IN THE PROCESS OF SELLING 21
MARRIOTT BRANDED HOTELS AND IT IS CURRENTLY EVALUATING WHICH, IF ANY,
OF THE 42 INTERCONTINENTAL BRANDED HOTELS MAY BE OFFERED FOR SALE OR
REBRANDED. AS A RESULT OF THESE ACTIVITIES, HPT HAS REDUCED THE
CARRYING AMOUNT OF CERTAIN OF THESE HOTELS TO THEIR ESTIMATED FAIR
VALUE LESS COSTS TO SELL. IN FACT, THE SALE OR REBRANDING OF THESE
HOTELS MAY BE DELAYED, HPT MAY BE UNABLE TO SELL OR REBRAND ANY OF
THESE HOTELS OR MAY SELL THE HOTELS AT AMOUNTS THAT ARE LESS THAN THEIR
ADJUSTED CARRYING VALUES.
THE
INFORMATION CONTAINED IN OUR FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, INCLUDING UNDER "RISK FACTORS" IN OUR
PERIODIC REPORTS OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT
FACTORS
THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
STATED IN
OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE
SECURITIES
AND EXCHANGE COMMISSION ARE AVAILABLE ON ITS WEBSITE AT WWW.SEC.GOV.
YOU SHOULD
NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING
STATEMENTS.
EXCEPT
AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE
OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW
INFORMATION, FUTURE
EVENTS OR OTHERWISE.
|