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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hospitality Properties Trust | NASDAQ:HPT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 25.28 | 25.00 | 25.51 | 0 | 01:00:00 |
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Maryland
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04-3262075
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer Identification No.)
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Title of Each Class
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Trading Symbol
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Name of each Exchange on which Registered
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Common Shares of Beneficial Interest
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SVC
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The Nasdaq Stock Market LLC
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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September 30,
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December 31,
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||||
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2019
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2018
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||||
ASSETS
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Real estate properties:
|
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|
||||
Land
|
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$
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2,062,776
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$
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1,626,239
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Buildings, improvements and equipment
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9,237,760
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7,896,734
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Total real estate properties, gross
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11,300,536
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9,522,973
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Accumulated depreciation
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(3,086,684
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)
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(2,973,384
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)
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Total real estate properties, net
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8,213,852
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6,549,589
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Acquired real estate leases and other intangibles
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392,673
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105,749
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Assets held for sale
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604,989
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144,008
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Cash and cash equivalents
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16,990
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25,966
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|
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Restricted cash
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53,519
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50,037
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Due from related persons
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72,587
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91,212
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Other assets, net
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160,893
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210,518
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Total assets
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$
|
9,515,503
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$
|
7,177,079
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|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
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|
||||
Unsecured revolving credit facility
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$
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790,000
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$
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177,000
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Unsecured term loan, net
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397,740
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397,292
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|
||
Senior unsecured notes, net
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5,284,933
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3,598,295
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Security deposits
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122,763
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132,816
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|
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Accounts payable and other liabilities
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292,161
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211,332
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|
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Due to related persons
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18,920
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62,913
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|
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Total liabilities
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6,906,517
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4,579,648
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Commitments and contingencies
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Shareholders’ equity:
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Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 164,565,303 and 164,441,709 shares issued and outstanding, respectively
|
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1,646
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|
|
1,644
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Additional paid in capital
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4,547,055
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4,545,481
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|
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Cumulative other comprehensive loss
|
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(175
|
)
|
|
(266
|
)
|
||
Cumulative net income available for common shareholders
|
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3,506,538
|
|
|
3,231,895
|
|
||
Cumulative common distributions
|
|
(5,446,078
|
)
|
|
(5,181,323
|
)
|
||
Total shareholders’ equity
|
|
2,608,986
|
|
|
2,597,431
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
9,515,503
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|
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$
|
7,177,079
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|
|
|
Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2019
|
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2018
|
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2019
|
|
2018
|
||||||||
Revenues:
|
|
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|
||||||||
Hotel operating revenues
|
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$
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525,290
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$
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520,618
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$
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1,521,368
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$
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1,494,283
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Rental income
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73,619
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81,322
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210,509
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|
|
245,543
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|
||||
FF&E reserve income
|
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863
|
|
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1,213
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3,365
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|
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3,911
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|
||||
Total revenues
|
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599,772
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603,153
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|
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1,735,242
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1,743,737
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||||
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||||||||
Expenses:
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Hotel operating expenses
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377,895
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365,526
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1,076,011
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1,052,121
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Other operating expenses
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1,707
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1,468
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4,419
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|
3,936
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|
||||
Depreciation and amortization
|
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103,160
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|
101,007
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301,721
|
|
|
300,308
|
|
||||
General and administrative
|
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12,464
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|
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13,425
|
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36,906
|
|
|
38,280
|
|
||||
Total expenses
|
|
495,226
|
|
|
481,426
|
|
|
1,419,057
|
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1,394,645
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|
||||
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||||||||
Gain on sale of real estate
|
|
—
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—
|
|
|
159,535
|
|
|
—
|
|
||||
Dividend income
|
|
—
|
|
|
626
|
|
|
1,752
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1,878
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|
||||
Unrealized gains (losses) on equity securities, net
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(3,950
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)
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43,453
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(43,761
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)
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89,348
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|
||||
Interest income
|
|
688
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|
|
478
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|
|
1,774
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|
1,093
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|
||||
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $2,689, $2,570, $7,829 and $7,607, respectively)
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|
(52,375
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)
|
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(49,308
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)
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(151,742
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)
|
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(145,589
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)
|
||||
Loss on early extinguishment of debt
|
|
(8,451
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)
|
|
—
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|
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(8,451
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)
|
|
(160
|
)
|
||||
Income before income taxes and equity in earnings of an investee
|
|
40,458
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|
|
116,976
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|
|
275,292
|
|
|
295,662
|
|
||||
Income tax expense
|
|
(467
|
)
|
|
(707
|
)
|
|
(1,266
|
)
|
|
(1,949
|
)
|
||||
Equity in earnings of an investee
|
|
83
|
|
|
830
|
|
|
617
|
|
|
881
|
|
||||
Net income
|
|
40,074
|
|
|
117,099
|
|
|
274,643
|
|
|
294,594
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Equity interest in investee’s unrealized gains (losses)
|
|
(46
|
)
|
|
173
|
|
|
91
|
|
|
90
|
|
||||
Other comprehensive income (loss)
|
|
(46
|
)
|
|
173
|
|
|
91
|
|
|
90
|
|
||||
Comprehensive income
|
|
$
|
40,028
|
|
|
$
|
117,272
|
|
|
$
|
274,734
|
|
|
$
|
294,684
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (basic)
|
|
164,321
|
|
|
164,232
|
|
|
164,294
|
|
|
164,212
|
|
||||
Weighted average common shares outstanding (diluted)
|
|
164,348
|
|
|
164,274
|
|
|
164,332
|
|
|
164,242
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share (basic and diluted)
|
|
$
|
0.24
|
|
|
$
|
0.71
|
|
|
$
|
1.67
|
|
|
$
|
1.79
|
|
|
Common Shares
|
|
Additional
Paid in Capital |
|
Cumulative
Net Income
Available for
Common
Shareholders
|
|
Cumulative
Other
Comprehensive
Income (Loss)
|
|
|
|||||||||||||||||
|
Number of
Shares |
|
Common
Shares |
|
Cumulative
Common
Distributions
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
Total
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2018
|
164,441,709
|
|
|
$
|
1,644
|
|
|
$
|
(5,181,323
|
)
|
|
$
|
4,545,481
|
|
|
$
|
3,231,895
|
|
|
$
|
(266
|
)
|
|
$
|
2,597,431
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225,787
|
|
|
—
|
|
|
225,787
|
|
||||||
Equity interest in investee’s unrealized gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
66
|
|
||||||
Common share grants
|
—
|
|
|
—
|
|
|
—
|
|
|
436
|
|
|
—
|
|
|
—
|
|
|
436
|
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(87,154
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,154
|
)
|
||||||
Balance at March 31, 2019
|
164,441,709
|
|
|
$
|
1,644
|
|
|
$
|
(5,268,477
|
)
|
|
$
|
4,545,917
|
|
|
$
|
3,457,682
|
|
|
$
|
(200
|
)
|
|
$
|
2,736,566
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,782
|
|
|
—
|
|
|
8,782
|
|
||||||
Equity interest in investee’s unrealized gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||||
Common share grants
|
15,000
|
|
|
1
|
|
|
—
|
|
|
868
|
|
|
—
|
|
|
—
|
|
|
869
|
|
||||||
Common share repurchases and forfeitures
|
(2,172
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(88,798
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,798
|
)
|
||||||
Balance at June 30, 2019
|
164,454,537
|
|
|
$
|
1,645
|
|
|
$
|
(5,357,275
|
)
|
|
$
|
4,546,737
|
|
|
$
|
3,466,464
|
|
|
$
|
(129
|
)
|
|
$
|
2,657,442
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,074
|
|
|
—
|
|
|
40,074
|
|
||||||
Equity interest in investee’s unrealized losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
||||||
Common share grants
|
140,100
|
|
|
1
|
|
|
—
|
|
|
1,067
|
|
|
—
|
|
|
—
|
|
|
1,068
|
|
||||||
Common share repurchases
|
(29,334
|
)
|
|
—
|
|
|
—
|
|
|
(749
|
)
|
|
—
|
|
|
—
|
|
|
(749
|
)
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(88,803
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,803
|
)
|
||||||
Balance at September 30, 2019
|
164,565,303
|
|
|
$
|
1,646
|
|
|
$
|
(5,446,078
|
)
|
|
$
|
4,547,055
|
|
|
$
|
3,506,538
|
|
|
$
|
(175
|
)
|
|
$
|
2,608,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
Additional
Paid in Capital |
|
Cumulative
Net Income
Available for
Common
Shareholders
|
|
Cumulative
Other
Comprehensive
Income (Loss)
|
|
|
|||||||||||||||||
|
Number of
Shares |
|
Common
Shares |
|
Cumulative
Common
Distributions
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
Total
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2017
|
164,349,141
|
|
|
$
|
1,643
|
|
|
$
|
(4,834,491
|
)
|
|
$
|
4,542,307
|
|
|
$
|
2,966,605
|
|
|
$
|
79,358
|
|
|
$
|
2,755,422
|
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,556
|
|
|
(79,556
|
)
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,206
|
|
|
—
|
|
|
80,206
|
|
||||||
Equity interest in investee’s unrealized losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
(93
|
)
|
||||||
Common share repurchases
|
(3,394
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(85,460
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,460
|
)
|
||||||
Balance at March 31, 2018
|
164,345,747
|
|
|
$
|
1,643
|
|
|
$
|
(4,919,951
|
)
|
|
$
|
4,542,206
|
|
|
$
|
3,126,367
|
|
|
$
|
(291
|
)
|
|
$
|
2,749,974
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,289
|
|
|
—
|
|
|
97,289
|
|
||||||
Equity interest in investee’s unrealized gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||
Common share grants
|
18,000
|
|
|
1
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
501
|
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(87,105
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,105
|
)
|
||||||
Balance at June 30, 2018
|
164,363,747
|
|
|
$
|
1,644
|
|
|
$
|
(5,007,056
|
)
|
|
$
|
4,542,706
|
|
|
$
|
3,223,656
|
|
|
$
|
(281
|
)
|
|
$
|
2,760,669
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,099
|
|
|
—
|
|
|
117,099
|
|
||||||
Equity interest in investee’s unrealized gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
173
|
|
||||||
Common share grants
|
97,000
|
|
|
1
|
|
|
—
|
|
|
2,242
|
|
|
—
|
|
|
—
|
|
|
2,243
|
|
||||||
Common share repurchases
|
(18,368
|
)
|
|
(1
|
)
|
|
—
|
|
|
(499
|
)
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
(87,113
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,113
|
)
|
||||||
Balance at September 30, 2018
|
164,442,379
|
|
|
$
|
1,644
|
|
|
$
|
(5,094,169
|
)
|
|
$
|
4,544,449
|
|
|
$
|
3,340,755
|
|
|
$
|
(108
|
)
|
|
$
|
2,792,571
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
|
(in thousands)
|
||||||||||
Weighted average common shares for basic earnings per share
|
|
164,321
|
|
|
164,232
|
|
|
164,294
|
|
|
164,212
|
|
Effect of dilutive securities: Unvested share awards
|
|
27
|
|
|
42
|
|
|
38
|
|
|
30
|
|
Weighted average common shares for diluted earnings per share
|
|
164,348
|
|
|
164,274
|
|
|
164,332
|
|
|
164,242
|
|
Acquisition Date
|
|
Location
|
|
Purchase Price
|
|
Land
|
|
Land Improvements
|
|
Building and Improvements
|
|
Furniture, Fixtures and Equipment
|
|
Held for Sale
|
|
Intangible Assets / Liabilities, net
|
||||||||||||||
2/22/2019
|
|
Washington, D.C. (1)
|
|
$
|
143,742
|
|
|
$
|
44,972
|
|
|
$
|
151
|
|
|
$
|
93,412
|
|
|
$
|
5,207
|
|
|
$
|
—
|
|
|
$
|
—
|
|
5/7/2019
|
|
Milwaukee, WI (2)
|
|
30,235
|
|
|
3,442
|
|
|
1,053
|
|
|
25,132
|
|
|
608
|
|
|
—
|
|
|
—
|
|
|||||||
8/1/2019
|
|
Southington, CT (3)
|
|
66
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
9/20/2019
|
|
Various (4)
|
|
2,482,382
|
|
|
388,057
|
|
|
—
|
|
|
1,201,922
|
|
|
—
|
|
|
604,989
|
|
|
287,414
|
|
|||||||
|
|
|
|
$
|
2,656,425
|
|
|
$
|
436,537
|
|
|
$
|
1,204
|
|
|
$
|
1,320,466
|
|
|
$
|
5,815
|
|
|
$
|
604,989
|
|
|
$
|
287,414
|
|
(1)
|
On February 22, 2019, we acquired the 335 room Hotel Palomar located in Washington, D.C. for a purchase price of $143,742, including capitalized acquisition costs of $2,292. We added this Kimpton® branded hotel to our management agreement with InterContinental Hotels Group, plc, or IHG. See Note 8 for further information regarding our management agreement with IHG for 102 hotels, or our IHG agreement.
|
(2)
|
On May 7, 2019, we acquired the 198 room Crowne Plaza Milwaukee West hotel in Milwaukee, WI for a purchase price of $30,235, including capitalized acquisition costs of $235. We added this Crowne Plaza® branded hotel to our management agreement with IHG. See Note 8 for further information regarding our IHG agreement.
|
(3)
|
On August 1, 2019, we acquired a land parcel adjacent to our travel center located in Southington, CT for a purchase price of $66, including capitalized acquisition costs of $6. This land parcel has been added to the TA lease for that travel center.
|
(4)
|
On September 20, 2019, we completed the SMTA Transaction for total consideration of $2,482,382. See below for further information regarding the SMTA Transaction. As of September 30, 2019, 148 assets included in the SMTA Transaction with a carrying value of $604,989 were classified as held for sale.
|
•
|
In January 2019, we sold to TA 20 travel center properties, which TA previously leased from us, for a total purchase price of $308,200.
|
•
|
Upon completing these sales, these travel center properties were removed from the TA leases and TA’s annual minimum rent payable to us decreased by $43,148.
|
•
|
Commencing on April 1, 2019, TA paid us the first of 16 quarterly installments of approximately $4,400 each (an aggregate of $70,458) to fully satisfy and discharge its $150,000 deferred rent obligation to us that otherwise would have become due in five installments between 2024 and 2030. TA paid to us $4,400 and $8,800 in respect of such obligation for the three and nine months ended September 30, 2019, respectively.
|
•
|
Commencing with the year ending December 31, 2020, TA will be obligated to pay to us an additional amount of percentage rent equal to one-half percent (0.5%) of the excess of its annual non-fuel revenues at leased sites over the non-fuel revenues for each respective site for the year ending December 31, 2019.
|
•
|
The term of each TA lease was extended by three years.
|
•
|
Certain of the travel center properties that we did not sell to TA and that TA continued to lease from us were reallocated among the TA leases.
|
2019
|
$
|
184,600
|
|
2020
|
440,093
|
|
|
2021
|
436,348
|
|
|
2022
|
428,645
|
|
|
2023
|
412,430
|
|
|
Thereafter
|
3,260,594
|
|
|
Total
|
$
|
5,162,710
|
|
2019
|
$
|
1,841
|
|
2020
|
6,910
|
|
|
2021
|
6,229
|
|
|
2022
|
5,691
|
|
|
2023
|
5,564
|
|
|
Thereafter
|
145,374
|
|
|
Total lease payments
|
171,609
|
|
|
Less: imputed interest
|
(95,385
|
)
|
|
Present value of lease liabilities (1)
|
$
|
76,224
|
|
(1)
|
The weighted average discount rate used to calculate the lease liability and the weighted average remaining term for our ground leases (assuming all extension options) and our hotel operating leases are approximately 5.45% and 31 years (range of 12 to 68 years) and 5.47% and 30 years (range of 1 month to 54 years), respectively.
|
|
|
For the Three Months Ended September 30, 2019
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
525,290
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
525,290
|
|
Rental income
|
|
5,565
|
|
|
68,054
|
|
|
—
|
|
|
73,619
|
|
||||
FF&E reserve income
|
|
863
|
|
|
—
|
|
|
—
|
|
|
863
|
|
||||
Total revenues
|
|
531,718
|
|
|
68,054
|
|
|
—
|
|
|
599,772
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
377,895
|
|
|
—
|
|
|
—
|
|
|
377,895
|
|
||||
Other operating expenses
|
|
369
|
|
|
1,338
|
|
|
—
|
|
|
1,707
|
|
||||
Depreciation and amortization
|
|
66,929
|
|
|
36,231
|
|
|
—
|
|
|
103,160
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
12,464
|
|
|
12,464
|
|
||||
Total expenses
|
|
445,193
|
|
|
37,569
|
|
|
12,464
|
|
|
495,226
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unrealized losses on equity securities
|
|
—
|
|
|
—
|
|
|
(3,950
|
)
|
|
(3,950
|
)
|
||||
Interest income
|
|
177
|
|
|
—
|
|
|
511
|
|
|
688
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(52,375
|
)
|
|
(52,375
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(8,451
|
)
|
|
(8,451
|
)
|
||||
Income (loss) before income taxes and equity in earnings of an investee
|
|
86,702
|
|
|
30,485
|
|
|
(76,729
|
)
|
|
40,458
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(467
|
)
|
|
(467
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
83
|
|
|
83
|
|
||||
Net income (loss)
|
|
$
|
86,702
|
|
|
$
|
30,485
|
|
|
$
|
(77,113
|
)
|
|
$
|
40,074
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the Nine Months Ended September 30, 2019
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
1,521,368
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,521,368
|
|
Rental income
|
|
16,700
|
|
|
193,809
|
|
|
—
|
|
|
210,509
|
|
||||
FF&E reserve income
|
|
3,365
|
|
|
—
|
|
|
—
|
|
|
3,365
|
|
||||
Total revenues
|
|
1,541,433
|
|
|
193,809
|
|
|
—
|
|
|
1,735,242
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
1,076,011
|
|
|
—
|
|
|
—
|
|
|
1,076,011
|
|
||||
Other operating expenses
|
|
1,101
|
|
|
3,318
|
|
|
—
|
|
|
4,419
|
|
||||
Depreciation and amortization
|
|
200,533
|
|
|
101,188
|
|
|
—
|
|
|
301,721
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
36,906
|
|
|
36,906
|
|
||||
Total expenses
|
|
1,277,645
|
|
|
104,506
|
|
|
36,906
|
|
|
1,419,057
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gain on sale of real estate
|
|
—
|
|
|
159,535
|
|
|
—
|
|
|
159,535
|
|
||||
Dividend income
|
|
—
|
|
|
—
|
|
|
1,752
|
|
|
1,752
|
|
||||
Unrealized losses on equity securities
|
|
—
|
|
|
—
|
|
|
(43,761
|
)
|
|
(43,761
|
)
|
||||
Interest income
|
|
603
|
|
|
—
|
|
|
1,171
|
|
|
1,774
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(151,742
|
)
|
|
(151,742
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(8,451
|
)
|
|
(8,451
|
)
|
||||
Income (loss) before income taxes and equity in earnings of an investee
|
|
264,391
|
|
|
248,838
|
|
|
(237,937
|
)
|
|
275,292
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(1,266
|
)
|
|
(1,266
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
617
|
|
|
617
|
|
||||
Net income (loss)
|
|
$
|
264,391
|
|
|
$
|
248,838
|
|
|
$
|
(238,586
|
)
|
|
$
|
274,643
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of September 30, 2019
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Total assets
|
|
$
|
4,823,114
|
|
|
$
|
4,642,072
|
|
|
$
|
50,317
|
|
|
$
|
9,515,503
|
|
|
|
For the Three Months Ended September 30, 2018
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
520,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
520,618
|
|
Rental income
|
|
6,404
|
|
|
74,918
|
|
|
—
|
|
|
81,322
|
|
||||
FF&E reserve income
|
|
1,213
|
|
|
—
|
|
|
—
|
|
|
1,213
|
|
||||
Total revenues
|
|
528,235
|
|
|
74,918
|
|
|
—
|
|
|
603,153
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
365,526
|
|
|
—
|
|
|
—
|
|
|
365,526
|
|
||||
Other operating expenses
|
|
427
|
|
|
1,041
|
|
|
—
|
|
|
1,468
|
|
||||
Depreciation and amortization
|
|
64,415
|
|
|
36,592
|
|
|
—
|
|
|
101,007
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
13,425
|
|
|
13,425
|
|
||||
Total expenses
|
|
430,368
|
|
|
37,633
|
|
|
13,425
|
|
|
481,426
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
626
|
|
|
626
|
|
||||
Unrealized gains and losses on equity securities, net
|
|
—
|
|
|
—
|
|
|
43,453
|
|
|
43,453
|
|
||||
Interest income
|
|
314
|
|
|
—
|
|
|
164
|
|
|
478
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(49,308
|
)
|
|
(49,308
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income (loss) before income taxes and equity in earnings of an investee
|
|
98,181
|
|
|
37,285
|
|
|
(18,490
|
)
|
|
116,976
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(707
|
)
|
|
(707
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
830
|
|
|
830
|
|
||||
Net income (loss)
|
|
$
|
98,181
|
|
|
$
|
37,285
|
|
|
$
|
(18,367
|
)
|
|
$
|
117,099
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the Nine Months Ended September 30, 2018
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
1,494,283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,494,283
|
|
Rental income
|
|
21,827
|
|
|
223,716
|
|
|
—
|
|
|
245,543
|
|
||||
FF&E reserve income
|
|
3,911
|
|
|
—
|
|
|
—
|
|
|
3,911
|
|
||||
Total revenues
|
|
1,520,021
|
|
|
223,716
|
|
|
—
|
|
|
1,743,737
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
1,052,121
|
|
|
—
|
|
|
—
|
|
|
1,052,121
|
|
||||
Other operating expenses
|
|
1,231
|
|
|
2,705
|
|
|
—
|
|
|
3,936
|
|
||||
Depreciation and amortization
|
|
189,814
|
|
|
110,494
|
|
|
—
|
|
|
300,308
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
38,280
|
|
|
38,280
|
|
||||
Total expenses
|
|
1,243,166
|
|
|
113,199
|
|
|
38,280
|
|
|
1,394,645
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
1,878
|
|
|
1,878
|
|
||||
Unrealized gains and losses on equity securities, net
|
|
—
|
|
|
—
|
|
|
89,348
|
|
|
89,348
|
|
||||
Interest income
|
|
717
|
|
|
—
|
|
|
376
|
|
|
1,093
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(145,589
|
)
|
|
(145,589
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(160
|
)
|
|
(160
|
)
|
||||
Income (loss) before income taxes and equity in earnings of an investee
|
|
277,572
|
|
|
110,517
|
|
|
(92,427
|
)
|
|
295,662
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(1,949
|
)
|
|
(1,949
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
881
|
|
|
881
|
|
||||
Net income (loss)
|
|
$
|
277,572
|
|
|
$
|
110,517
|
|
|
$
|
(93,495
|
)
|
|
$
|
294,594
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2018
|
||||||||||||||
|
|
Hotels
|
|
Net Lease
|
|
Corporate
|
|
Consolidated
|
||||||||
Total assets
|
|
$
|
4,586,709
|
|
|
$
|
2,398,118
|
|
|
$
|
192,252
|
|
|
$
|
7,177,079
|
|
|
|
|
|
|
Fair Value at Reporting Date Using
|
|||||||||||
|
|
|
|
Quoted Prices in
|
|
|
|
|
||||||||
|
|
|
|
Active Markets for
|
|
Significant Other
|
|
Significant
|
||||||||
|
|
Carrying Value at
|
|
Identical Assets
|
|
Observable Inputs
|
|
Unobservable Inputs
|
||||||||
Description
|
|
September 30, 2019
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Recurring Fair Value Measurement Assets:
|
|
|
|
|
|
|
||||||||||
Investment in TA (1)
|
|
$
|
8,430
|
|
|
$
|
8,430
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-recurring Fair Value Measurement Assets:
|
|
|
|
|
|
|
||||||||||
Assets of properties held for sale (2)
|
|
$
|
607,636
|
|
|
$
|
—
|
|
|
$
|
518,300
|
|
|
$
|
89,336
|
|
(1)
|
Our 684,000 common shares of TA, which are included in other assets in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $17,407 as of September 30, 2019. During the three and nine months ended September 30, 2019, we recorded unrealized losses of $3,950 and $4,429, respectively, and during the three and nine months ended September 30, 2018, we recorded unrealized gains of $7,524 and $5,472, respectively, to adjust the carrying value of our investment in TA shares to its fair value.
|
(2)
|
As of September 30, 2019, we owned 148 net lease properties located in 26 states classified as held for sale of $604,989, which is net of estimated costs to sell of $2,647. We have recorded 136 of these properties at their estimated fair value of $518,300 based on negotiated selling prices with third party buyers (Level 2 inputs as defined in the fair value hierarchy under GAAP). The remaining 12 of these properties are recorded at their estimated fair value of $89,336 based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP).
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
|
|
Value (1)
|
|
Value
|
|
Value (1)
|
|
Value
|
||||||||
Senior Unsecured Notes, due 2021 at 4.25%
|
|
$
|
398,019
|
|
|
$
|
405,594
|
|
|
$
|
396,938
|
|
|
$
|
404,582
|
|
Senior Unsecured Notes, due 2022 at 5.00%
|
|
496,518
|
|
|
524,058
|
|
|
495,609
|
|
|
510,658
|
|
||||
Senior Unsecured Notes, due 2023 at 4.50%
|
|
499,391
|
|
|
515,003
|
|
|
499,268
|
|
|
503,295
|
|
||||
Senior Unsecured Notes, due 2024 at 4.65%
|
|
348,193
|
|
|
360,395
|
|
|
347,890
|
|
|
349,741
|
|
||||
Senior Unsecured Notes, due 2024 at 4.35%
|
|
817,713
|
|
|
836,026
|
|
|
—
|
|
|
—
|
|
||||
Senior Unsecured Notes, due 2025 at 4.50%
|
|
346,259
|
|
|
355,420
|
|
|
345,743
|
|
|
341,114
|
|
||||
Senior Unsecured Notes, due 2026 at 5.25%
|
|
342,801
|
|
|
363,979
|
|
|
341,955
|
|
|
354,060
|
|
||||
Senior Unsecured Notes, due 2026 at 4.75%
|
|
445,756
|
|
|
453,076
|
|
|
—
|
|
|
—
|
|
||||
Senior Unsecured Notes, due 2027 at 4.95%
|
|
394,460
|
|
|
406,718
|
|
|
393,893
|
|
|
391,660
|
|
||||
Senior Unsecured Notes, due 2028 at 3.95%
|
|
390,472
|
|
|
379,724
|
|
|
389,610
|
|
|
361,232
|
|
||||
Senior Unsecured Notes, due 2029 at 4.95%
|
|
417,112
|
|
|
406,604
|
|
|
—
|
|
|
—
|
|
||||
Senior Unsecured Notes, due 2030 at 4.375%
|
|
388,239
|
|
|
383,118
|
|
|
387,389
|
|
|
367,110
|
|
||||
Total financial liabilities
|
|
$
|
5,284,933
|
|
|
$
|
5,389,715
|
|
|
$
|
3,598,295
|
|
|
$
|
3,583,452
|
|
(1)
|
Carrying value includes unamortized discounts and premiums and issuance costs.
|
|
|
For the Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
|
Increase
|
|
% Increase
|
|||||||
|
|
2019
|
|
2018
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating revenues
|
|
$
|
525,290
|
|
|
$
|
520,618
|
|
|
$
|
4,672
|
|
|
0.9
|
%
|
Rental income - hotels
|
|
5,565
|
|
|
6,404
|
|
|
(839
|
)
|
|
(13.1
|
)%
|
|||
Rental income - net lease portfolio
|
|
68,054
|
|
|
74,918
|
|
|
(6,864
|
)
|
|
(9.2
|
)%
|
|||
Total rental income
|
|
73,619
|
|
|
81,322
|
|
|
(7,703
|
)
|
|
(9.5
|
)%
|
|||
FF&E reserve income
|
|
863
|
|
|
1,213
|
|
|
(350
|
)
|
|
(28.9
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel operating expenses
|
|
377,895
|
|
|
365,526
|
|
|
12,369
|
|
|
3.4
|
%
|
|||
Other operating expenses
|
|
1,707
|
|
|
1,468
|
|
|
239
|
|
|
16.3
|
%
|
|||
Depreciation and amortization - hotels
|
|
66,929
|
|
|
64,415
|
|
|
2,514
|
|
|
3.9
|
%
|
|||
Depreciation and amortization - net lease portfolio
|
|
36,231
|
|
|
36,592
|
|
|
(361
|
)
|
|
(1.0
|
)%
|
|||
Total depreciation and amortization
|
|
103,160
|
|
|
101,007
|
|
|
2,153
|
|
|
2.1
|
%
|
|||
General and administrative
|
|
12,464
|
|
|
13,425
|
|
|
(961
|
)
|
|
(7.2
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Dividend income
|
|
—
|
|
|
626
|
|
|
(626
|
)
|
|
(100.0
|
)%
|
|||
Unrealized gains (losses) on equity securities, net
|
|
(3,950
|
)
|
|
43,453
|
|
|
(47,403
|
)
|
|
n/m
|
|
|||
Interest income
|
|
688
|
|
|
478
|
|
|
210
|
|
|
43.9
|
%
|
|||
Interest expense
|
|
(52,375
|
)
|
|
(49,308
|
)
|
|
(3,067
|
)
|
|
6.2
|
%
|
|||
Loss on early extinguishment of debt
|
|
(8,451
|
)
|
|
—
|
|
|
(8,451
|
)
|
|
n/m
|
|
|||
Income before income taxes and equity earnings of an investee
|
|
40,458
|
|
|
116,976
|
|
|
(76,518
|
)
|
|
(65.4
|
)%
|
|||
Income tax expense
|
|
(467
|
)
|
|
(707
|
)
|
|
240
|
|
|
(33.9
|
)%
|
|||
Equity in earnings of an investee
|
|
83
|
|
|
830
|
|
|
(747
|
)
|
|
(90.0
|
)%
|
|||
Net income
|
|
$
|
40,074
|
|
|
$
|
117,099
|
|
|
$
|
(77,025
|
)
|
|
(65.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding (basic)
|
|
164,321
|
|
|
164,232
|
|
|
89
|
|
|
0.1
|
%
|
|||
Weighted average shares outstanding (diluted)
|
|
164,348
|
|
|
164,274
|
|
|
74
|
|
|
n/m
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Net income per common share (basic and diluted)
|
|
$
|
0.24
|
|
|
$
|
0.71
|
|
|
$
|
(0.47
|
)
|
|
(66.2
|
)%
|
|
|
For the Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
|
Increase
|
|
% Increase
|
|||||||
|
|
2019
|
|
2018
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|||||
Hotel operating revenues
|
|
$
|
1,521,368
|
|
|
$
|
1,494,283
|
|
|
$
|
27,085
|
|
|
1.8
|
%
|
Rental income - hotels
|
|
16,700
|
|
|
21,827
|
|
|
(5,127
|
)
|
|
(23.5
|
)%
|
|||
Rental income - net lease portfolio
|
|
193,809
|
|
|
223,716
|
|
|
(29,907
|
)
|
|
(13.4
|
)%
|
|||
Total rental income
|
|
210,509
|
|
|
245,543
|
|
|
(35,034
|
)
|
|
(14.3
|
)%
|
|||
FF&E reserve income
|
|
3,365
|
|
|
3,911
|
|
|
(546
|
)
|
|
(14.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel operating expenses
|
|
1,076,011
|
|
|
1,052,121
|
|
|
23,890
|
|
|
2.3
|
%
|
|||
Other operating expenses
|
|
4,419
|
|
|
3,936
|
|
|
483
|
|
|
12.3
|
%
|
|||
Depreciation and amortization - hotels
|
|
200,533
|
|
|
189,814
|
|
|
10,719
|
|
|
5.6
|
%
|
|||
Depreciation and amortization - net lease portfolio
|
|
101,188
|
|
|
110,494
|
|
|
(9,306
|
)
|
|
(8.4
|
)%
|
|||
Total depreciation and amortization
|
|
301,721
|
|
|
300,308
|
|
|
1,413
|
|
|
0.5
|
%
|
|||
General and administrative
|
|
36,906
|
|
|
38,280
|
|
|
(1,374
|
)
|
|
(3.6
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Gain on sale of real estate
|
|
159,535
|
|
|
—
|
|
|
159,535
|
|
|
n/m
|
|
|||
Dividend income
|
|
1,752
|
|
|
1,878
|
|
|
(126
|
)
|
|
(6.7
|
)%
|
|||
Unrealized gains (losses) on equity securities, net
|
|
(43,761
|
)
|
|
89,348
|
|
|
(133,109
|
)
|
|
n/m
|
|
|||
Interest income
|
|
1,774
|
|
|
1,093
|
|
|
681
|
|
|
62.3
|
%
|
|||
Interest expense
|
|
(151,742
|
)
|
|
(145,589
|
)
|
|
(6,153
|
)
|
|
4.2
|
%
|
|||
Loss on early extinguishment of debt
|
|
(8,451
|
)
|
|
(160
|
)
|
|
(8,291
|
)
|
|
5,181.9
|
%
|
|||
Income before income taxes and equity earnings of an investee
|
|
275,292
|
|
|
295,662
|
|
|
(20,370
|
)
|
|
(6.9
|
)%
|
|||
Income tax expense
|
|
(1,266
|
)
|
|
(1,949
|
)
|
|
683
|
|
|
(35.0
|
)%
|
|||
Equity in earnings of an investee
|
|
617
|
|
|
881
|
|
|
(264
|
)
|
|
(30.0
|
)%
|
|||
Net income
|
|
$
|
274,643
|
|
|
$
|
294,594
|
|
|
$
|
(19,951
|
)
|
|
(6.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding (basic)
|
|
164,294
|
|
|
164,212
|
|
|
82
|
|
|
n/m
|
|
|||
Weighted average shares outstanding (diluted)
|
|
164,332
|
|
|
164,242
|
|
|
90
|
|
|
0.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Net income per common share (basic and diluted)
|
|
$
|
1.67
|
|
|
$
|
1.79
|
|
|
$
|
(0.12
|
)
|
|
(6.7
|
)%
|
•
|
During the nine months ended September 30, 2019, we funded $15,778 for capital improvements to certain hotels under our Marriott No. 1 agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund $1,300 for capital improvements under this agreement during the last three months of 2019 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the contractual minimum returns payable to us increase.
|
•
|
During the nine months ended September 30, 2019, we funded $18,600 for capital improvements to certain hotels under our Marriott No. 234 agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $11,700 for capital improvements under this agreement during the last three months of 2019 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the contractual minimum returns payable to us increase.
|
•
|
We did not fund any capital improvements to hotels under our IHG agreement during the nine months ended September 30, 2019. We currently expect to fund approximately $65,500 during the last three months of 2019 for capital improvements under this agreement using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the contractual minimum returns payable to us increase.
|
•
|
Our Sonesta agreement does not require FF&E escrow deposits. Under our Sonesta agreement, we are required to fund capital expenditures made at our hotels. During the nine months ended September 30, 2019, we funded $67,495 for capital improvements to certain hotels included in our Sonesta agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund approximately $48,000 during the last three months of 2019 and $28,000 during 2020 for capital improvements under this agreement using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the contractual minimum returns payable to us increase to the extent amounts funded exceed threshold amounts, as defined in our Sonesta agreement.
|
•
|
Our Wyndham agreement required FF&E escrow deposits only if there are excess cash flows after payment of our minimum returns. No FF&E escrow deposits were required during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, we funded $2,283 for capital improvements to certain hotels included in our Wyndham agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund $1,000 capital improvements under this agreement during the last three months of 2019 using cash on hand and borrowings under our revolving credit facility.
|
•
|
During the nine months ended September 30, 2019, we funded $19,034 for capital improvements to certain hotels under our Radisson agreement using cash on hand and borrowings under our revolving credit facility. We currently do not expect to fund capital improvements under this agreement during the last three months of 2019.
|
Operating Agreement Reference Name
|
|
Number of Properties
|
|
Number of Rooms or Suites (Hotels)
|
|
Investment (1)
|
|
Annual Minimum Return/Rent (2)
|
|
Rent / Return Coverage (3)
|
||||||||||||
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|||||||||||||||
|
|
|
|
|
September 30,
|
|
September 30,
|
|||||||||||||||
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||||
Marriott (No. 1) (4)
|
|
53
|
|
|
7,609
|
|
|
$
|
722,087
|
|
|
$
|
71,714
|
|
|
1.30x
|
|
1.38x
|
|
1.16x
|
|
1.20x
|
Marriott (No. 234) (5)
|
|
68
|
|
|
9,120
|
|
|
1,030,994
|
|
|
109,024
|
|
|
1.06x
|
|
1.14x
|
|
1.04x
|
|
1.10x
|
||
Marriott (No. 5) (6)
|
|
1
|
|
|
356
|
|
|
90,078
|
|
|
10,518
|
|
|
1.17x
|
|
1.04x
|
|
1.01x
|
|
1.07x
|
||
Subtotal / Average Marriott
|
|
122
|
|
|
17,085
|
|
|
1,843,159
|
|
|
191,256
|
|
|
1.16x
|
|
1.22x
|
|
1.08x
|
|
1.13x
|
||
IHG (7)
|
|
102
|
|
|
16,893
|
|
|
2,267,462
|
|
|
207,411
|
|
|
0.88x
|
|
1.18x
|
|
0.90x
|
|
1.12x
|
||
Sonesta (8)
|
|
51
|
|
|
8,862
|
|
|
1,763,319
|
|
|
131,229
|
|
|
0.48x
|
|
0.68x
|
|
0.58x
|
|
0.68x
|
||
Wyndham (9)
|
|
22
|
|
|
3,583
|
|
|
398,964
|
|
|
29,466
|
|
|
0.93x
|
|
0.99x
|
|
0.58x
|
|
0.75x
|
||
Hyatt (10)
|
|
22
|
|
|
2,724
|
|
|
301,942
|
|
|
22,037
|
|
|
0.77x
|
|
0.95x
|
|
0.90x
|
|
1.08x
|
||
Radisson (11)
|
|
9
|
|
|
1,939
|
|
|
289,139
|
|
|
20,442
|
|
|
1.38x
|
|
1.34x
|
|
0.95x
|
|
1.10x
|
||
Total / Average Hotels
|
|
328
|
|
|
51,086
|
|
|
$
|
6,863,985
|
|
|
$
|
601,841
|
|
|
0.90x
|
|
1.07x
|
|
0.87x
|
|
1.01x
|
(1)
|
Represents the historical cost of our hotel properties plus capital improvements funded by us less impairment write-downs, if any, and excludes capital improvements made from FF&E reserves funded from hotel operations which do not result in increases in hotel minimum returns or rents.
|
(2)
|
Each of our hotel management agreements or leases provides for payment to us of an annual minimum return or rent, respectively. Certain of these minimum payment amounts are secured by full or limited guarantees or security deposits as more fully described below. In addition, certain of our hotel management agreements provide for payment to us of additional amounts to the extent of available cash flows as defined in the management agreement. Payments of these additional amounts are not guaranteed or secured by deposits. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments necessary to record rent on a straight line basis.
|
(3)
|
We define hotel coverage as combined total hotel property level revenues minus all hotel property level expenses and FF&E reserve escrows which are not subordinated to hotel minimum returns or rents due to us (which data is provided to us by our hotel managers or tenants), divided by the hotel minimum returns or rents due to us. Coverage amounts for our IHG, Sonesta and Radisson agreements include data for periods prior to our ownership of certain hotel properties. Coverage amounts for our Sonesta agreement include data for one hotel prior to when it was managed by Sonesta. Coverage amounts for our Radisson agreement excludes data for certain properties we sold during the periods presented.
|
(4)
|
We lease 53 Courtyard by Marriott® branded hotels in 24 states to one of our TRSs. The hotels are managed by a subsidiary of Marriott under a combination management agreement which expires in 2024; Marriott has two renewal options for 12 years each for all, but not less than all, of the hotels.
|
(5)
|
We lease 68 of our Marriott® branded hotels (one full service Marriott®, 35 Residence Inn by Marriott®, 18 Courtyard by Marriott®, 12 TownePlace Suites by Marriott® and two SpringHill Suites by Marriott® hotels) in 22 states to one of our TRSs. The hotels are managed by subsidiaries of Marriott under a combination management agreement which expires in 2025; Marriott has two renewal options for 10 years each for all, but not less than all, of the hotels.
|
(6)
|
We lease one Marriott® branded hotel in Kauai, HI to a subsidiary of Marriott under a lease that expires in 2019. Marriott has four renewal options for 15 years each. On August 31, 2016, Marriott notified us that it will not exercise its renewal option at the expiration of the current lease term ending on December 31, 2019. This lease is guaranteed by Marriott and provides for increases in the annual minimum rent payable to us based on changes in the consumer price index.
|
(7)
|
We lease 101 IHG branded hotels (20 Staybridge Suites®, 61 Candlewood Suites®, two InterContinental®, 11 Crowne Plaza®, four Kimpton® Hotels & Restaurants and three Holiday Inn®) in 30 states in the U.S., the District of Columbia and Ontario, Canada to one of our TRSs. These 101 hotels are managed by subsidiaries of IHG under a combination management agreement. We lease one additional InterContinental® branded hotel in Puerto Rico to a subsidiary of IHG. The annual minimum return amount presented in the table on page 38 includes $7,908 of minimum rent related to the leased Puerto Rico hotel. The management agreement and the lease expire in 2036; IHG has two renewal options for 15 years each for all, but not less than all, of the hotels.
|
(8)
|
We lease our 51 Sonesta branded hotels (six Royal Sonesta® Hotels, six Sonesta Hotels & Resorts® and 39 Sonesta ES Suites® hotels) in 26 states to one of our TRSs. The hotels are managed by Sonesta under a combination management agreement which expires in 2037; Sonesta has two renewal options for 15 years each for all, but not less than all, of the hotels.
|
(9)
|
We lease our 22 Wyndham branded hotels (six Wyndham Hotels and Resorts® and 16 Hawthorn Suites® hotels) in 14 states to one of our TRSs. The hotels are managed by subsidiaries of Wyndham under a combination management agreement which expires in 2038; Wyndham has two renewal options for 15 years each for all, but not less than all, of the hotels.
|
(10)
|
We lease our 22 Hyatt Place® branded hotels in 14 states to one of our TRSs. The hotels are managed by a subsidiary of Hyatt under a combination management agreement that expires in 2030; Hyatt has two renewal options for 15 years each for all, but not less than all, of the hotels.
|
(11)
|
We lease our nine Radisson branded hotels (four Radisson® Hotels & Resorts, four Country Inns & Suites® by Radisson and one Radisson Blu® hotel) in six states to one of our TRSs and these hotels are managed by a subsidiary of Radisson under a combination management agreement which expires in 2035 and Radisson has two 15 year renewal options for all, but not less than all, of the hotels.
|
|
|
No. of
|
|
No. of Rooms /
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
Hotels
|
|
Suites
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marriott (No. 1)
|
|
53
|
|
|
7,609
|
|
|
$
|
132.70
|
|
|
$
|
132.67
|
|
|
—
|
%
|
|
$
|
134.27
|
|
|
$
|
132.19
|
|
|
1.6
|
%
|
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
132.40
|
|
|
134.75
|
|
|
(1.7
|
%)
|
|
134.44
|
|
|
134.05
|
|
|
0.3
|
%
|
||||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
308.12
|
|
|
301.59
|
|
|
2.2
|
%
|
|
304.95
|
|
|
290.71
|
|
|
4.9
|
%
|
||||
Subtotal / Average Marriott
|
|
122
|
|
|
17,085
|
|
|
136.82
|
|
|
137.88
|
|
|
(0.8
|
%)
|
|
138.67
|
|
|
137.32
|
|
|
1.0
|
%
|
||||
IHG (1)
|
|
102
|
|
|
16,893
|
|
|
120.44
|
|
|
123.97
|
|
|
(2.8
|
%)
|
|
122.04
|
|
|
125.37
|
|
|
(2.7
|
%)
|
||||
Sonesta (1) (2)
|
|
51
|
|
|
8,862
|
|
|
140.45
|
|
|
146.63
|
|
|
(4.2
|
%)
|
|
147.47
|
|
|
149.31
|
|
|
(1.2
|
%)
|
||||
Wyndham
|
|
22
|
|
|
3,583
|
|
|
100.63
|
|
|
103.40
|
|
|
(2.7
|
%)
|
|
97.67
|
|
|
100.96
|
|
|
(3.3
|
%)
|
||||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
105.76
|
|
|
109.34
|
|
|
(3.3
|
%)
|
|
109.67
|
|
|
112.64
|
|
|
(2.6
|
%)
|
||||
Radisson (1)
|
|
9
|
|
|
1,939
|
|
|
141.65
|
|
|
141.16
|
|
|
0.3
|
%
|
|
136.66
|
|
|
134.29
|
|
|
1.8
|
%
|
||||
All Hotels Total / Average
|
|
328
|
|
|
51,086
|
|
|
$
|
127.82
|
|
|
$
|
130.68
|
|
|
(2.2
|
%)
|
|
$
|
129.91
|
|
|
$
|
131.15
|
|
|
(0.9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OCCUPANCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marriott (No. 1)
|
|
53
|
|
|
7,609
|
|
|
73.1
|
%
|
|
72.5
|
%
|
|
0.6 pts
|
|
|
68.8
|
%
|
|
70.1
|
%
|
|
-1.3 pts
|
|
||||
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
77.4
|
%
|
|
76.7
|
%
|
|
0.7 pts
|
|
|
74.9
|
%
|
|
76.2
|
%
|
|
-1.3 pts
|
|
||||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
88.6
|
%
|
|
87.0
|
%
|
|
1.6 pts
|
|
|
87.7
|
%
|
|
91.7
|
%
|
|
-4.0 pts
|
|
||||
Subtotal / Average Marriott
|
|
122
|
|
|
17,085
|
|
|
75.7
|
%
|
|
75.1
|
%
|
|
0.6 pts
|
|
|
72.4
|
%
|
|
73.8
|
%
|
|
-1.4 pts
|
|
||||
IHG (1)
|
|
102
|
|
|
16,893
|
|
|
79.8
|
%
|
|
82.0
|
%
|
|
-2.2 pts
|
|
|
77.7
|
%
|
|
80.0
|
%
|
|
-2.3 pts
|
|
||||
Sonesta (1) (2)
|
|
51
|
|
|
8,862
|
|
|
73.8
|
%
|
|
72.3
|
%
|
|
1.5 pts
|
|
|
70.0
|
%
|
|
69.2
|
%
|
|
0.8 pts
|
|
||||
Wyndham
|
|
22
|
|
|
3,583
|
|
|
74.5
|
%
|
|
72.3
|
%
|
|
2.2 pts
|
|
|
69.4
|
%
|
|
69.6
|
%
|
|
-0.2 pts
|
|
||||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
79.4
|
%
|
|
80.1
|
%
|
|
-0.7 pts
|
|
|
78.9
|
%
|
|
80.5
|
%
|
|
-1.6 pts
|
|
||||
Radisson (1)
|
|
9
|
|
|
1,939
|
|
|
79.5
|
%
|
|
75.4
|
%
|
|
4.1 pts
|
|
|
72.7
|
%
|
|
74.6
|
%
|
|
-1.9 pts
|
|
||||
All Hotels Total / Average
|
|
328
|
|
|
51,086
|
|
|
77.0
|
%
|
|
77.0
|
%
|
|
0.0 pts
|
|
|
73.9
|
%
|
|
75.1
|
%
|
|
-1.2 pts
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marriott (No. 1)
|
|
53
|
|
|
7,609
|
|
|
$
|
97.00
|
|
|
$
|
96.19
|
|
|
0.8
|
%
|
|
$
|
92.38
|
|
|
$
|
92.67
|
|
|
(0.3
|
%)
|
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
102.48
|
|
|
103.35
|
|
|
(0.8
|
%)
|
|
100.70
|
|
|
102.15
|
|
|
(1.4
|
%)
|
||||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
272.99
|
|
|
262.38
|
|
|
4.0
|
%
|
|
267.44
|
|
|
266.58
|
|
|
0.3
|
%
|
||||
Subtotal / Average Marriott
|
|
122
|
|
|
17,085
|
|
|
103.57
|
|
|
103.55
|
|
|
—
|
%
|
|
100.40
|
|
|
101.34
|
|
|
(0.9
|
%)
|
||||
IHG (1)
|
|
102
|
|
|
16,893
|
|
|
96.11
|
|
|
101.66
|
|
|
(5.5
|
%)
|
|
94.83
|
|
|
100.30
|
|
|
(5.5
|
%)
|
||||
Sonesta (1) (2)
|
|
51
|
|
|
8,862
|
|
|
103.65
|
|
|
106.01
|
|
|
(2.2
|
%)
|
|
103.23
|
|
|
103.32
|
|
|
(0.1
|
%)
|
||||
Wyndham
|
|
22
|
|
|
3,583
|
|
|
74.97
|
|
|
74.76
|
|
|
0.3
|
%
|
|
67.78
|
|
|
70.27
|
|
|
(3.5
|
%)
|
||||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
83.97
|
|
|
87.58
|
|
|
(4.1
|
%)
|
|
86.53
|
|
|
90.68
|
|
|
(4.6
|
%)
|
||||
Radisson (1)
|
|
9
|
|
|
1,939
|
|
|
112.61
|
|
|
106.43
|
|
|
5.8
|
%
|
|
99.35
|
|
|
100.18
|
|
|
(0.8
|
%)
|
||||
All Hotels Total / Average
|
|
328
|
|
|
51,086
|
|
|
$
|
98.42
|
|
|
$
|
100.62
|
|
|
(2.2
|
%)
|
|
$
|
96.00
|
|
|
$
|
98.49
|
|
|
(2.5
|
%)
|
(1)
|
Operating data includes data for certain hotels for periods prior to when we acquired them.
|
(2)
|
Operating data includes data for one hotel prior to when it was managed by Sonesta.
|
|
Brand
|
|
No. of Buildings
|
|
Investment (1) (2)
|
|
Percent of Total Investment
|
|
Annualized
Minimum Rent (2)
|
|
Percent of Total Annualized
Minimum Rent (2) (3)
|
|
Coverage (4)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1.
|
TravelCenters of America
|
|
134
|
|
$
|
2,281,589
|
|
|
39.3
|
%
|
|
$
|
167,990
|
|
|
40.1
|
%
|
|
1.95x
|
2.
|
Petro Stopping Centers
|
|
45
|
|
1,021,227
|
|
|
17.7
|
%
|
|
78,099
|
|
|
18.7
|
%
|
|
1.62x
|
||
3.
|
AMC Theatres
|
|
14
|
|
123,554
|
|
|
2.1
|
%
|
|
10,725
|
|
|
2.6
|
%
|
|
1.36x
|
||
4.
|
The Great Escape
|
|
14
|
|
98,242
|
|
|
1.7
|
%
|
|
7,140
|
|
|
1.7
|
%
|
|
4.12x
|
||
5.
|
Creme de la Creme
|
|
9
|
|
68,712
|
|
|
1.2
|
%
|
|
5,811
|
|
|
1.4
|
%
|
|
1.84x
|
||
6.
|
Goodrich Quality Theaters
|
|
4
|
|
59,743
|
|
|
1.0
|
%
|
|
5,396
|
|
|
1.3
|
%
|
|
1.48x
|
||
7.
|
Life Time Fitness
|
|
3
|
|
92,617
|
|
|
1.6
|
%
|
|
5,246
|
|
|
1.3
|
%
|
|
3.56x
|
||
8.
|
Casual Male
|
|
1
|
|
69,973
|
|
|
1.2
|
%
|
|
5,221
|
|
|
1.2
|
%
|
|
1.24x
|
||
9.
|
Buehler's Fresh Foods
|
|
5
|
|
76,536
|
|
|
1.3
|
%
|
|
5,143
|
|
|
1.2
|
%
|
|
2.22x
|
||
10.
|
CarMax
|
|
4
|
|
66,119
|
|
|
1.1
|
%
|
|
4,878
|
|
|
1.2
|
%
|
|
2.51x
|
||
11.
|
Other (5)
|
|
713
|
|
1,826,885
|
|
|
31.8
|
%
|
|
122,986
|
|
|
29.3
|
%
|
|
3.15x
|
||
|
Total
|
|
946
|
|
$
|
5,785,197
|
|
|
100.0
|
%
|
|
$
|
418,635
|
|
|
100.0
|
%
|
|
2.27x
|
(1)
|
Represents historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any.
|
(2)
|
Each of our leases provides for payment to us of minimum rent. Certain of these minimum payment amounts are secured by full or limited guarantees. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments, if any, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA, and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis, or any reimbursement of expenses paid by us.
|
(3)
|
As of September 30, 2019, we have 148 net lease properties with a carrying value of $604,989 and annual minimum rent of $43,081 classified as held for sale.
|
(4)
|
See page 39 for our definition of coverage. Coverage amounts include data for certain properties for periods prior to when we assumed ownership of them.
|
(5)
|
Other includes 153 distinct brands with an average investment of $11,940 and average annual minimum rent of $804.
|
|
Tenant
|
|
Brand Affiliation
|
|
No. of Buildings
|
|
Investment (1) (2)
|
|
Percent of Total Investment
|
|
Annualized
Minimum Rent (2) (3)
|
|
Percent of Total Annualized
Minimum Rent
|
|
Coverage (4)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1.
|
TravelCenters of America Inc.
|
|
TravelCenters of America / Petro Stopping Centers
|
|
179
|
|
$
|
3,302,816
|
|
|
57.0
|
%
|
|
$
|
246,088
|
|
|
58.7
|
%
|
|
1.84x
|
(5) (6)
|
2.
|
Universal Pool Co., Inc.
|
|
The Great Escape
|
|
14
|
|
98,242
|
|
|
1.7
|
%
|
|
7,140
|
|
|
1.7
|
%
|
|
4.12x
|
|
||
3.
|
Creme De La Creme, Inc.
|
|
Creme De La Creme
|
|
9
|
|
68,712
|
|
|
1.2
|
%
|
|
5,811
|
|
|
1.4
|
%
|
|
1.84x
|
(5)
|
||
4.
|
Goodrich Quality Theaters, Inc.
|
|
Goodrich Quality Theaters
|
|
4
|
|
59,743
|
|
|
1.0
|
%
|
|
5,396
|
|
|
1.3
|
%
|
|
1.48x
|
|
||
5.
|
Healthy Way of Life II, LLC
|
|
Life Time Fitness
|
|
3
|
|
92,617
|
|
|
1.6
|
%
|
|
5,246
|
|
|
1.3
|
%
|
|
3.56x
|
(5)
|
||
6.
|
Destination XL Group, Inc.
|
|
Casual Male
|
|
1
|
|
69,973
|
|
|
1.2
|
%
|
|
5,221
|
|
|
1.2
|
%
|
|
1.24x
|
|
||
7.
|
Styx Acquisition, LLC
|
|
Buehler's Fresh Foods
|
|
5
|
|
76,536
|
|
|
1.3
|
%
|
|
5,143
|
|
|
1.2
|
%
|
|
2.22x
|
|
||
8.
|
Professional Resource Development, Inc.
|
|
Heartland Dental
|
|
59
|
|
61,120
|
|
|
1.1
|
%
|
|
4,427
|
|
|
1.1
|
%
|
|
3.50x
|
|
||
9.
|
Station Casinos, Inc. (7)
|
|
Station Casino
|
|
1
|
|
56,083
|
|
|
1.0
|
%
|
|
3,561
|
|
|
0.9
|
%
|
|
3.00x
|
|
||
10.
|
Express Oil Change, L.L.C.
|
|
Express Oil Change
|
|
23
|
|
49,724
|
|
|
0.9
|
%
|
|
3,379
|
|
|
0.8
|
%
|
|
3.62x
|
|
||
|
Subtotal, top 10
|
|
|
|
298
|
|
3,935,566
|
|
|
68.0
|
%
|
|
291,412
|
|
|
69.6
|
%
|
|
1.88x
|
|
||
11.
|
Other (8)
|
|
Various
|
|
648
|
|
1,849,631
|
|
|
32.0
|
%
|
|
127,223
|
|
|
30.4
|
%
|
|
2.95x
|
|
||
|
Total
|
|
|
|
946
|
|
$
|
5,785,197
|
|
|
100.0
|
%
|
|
$
|
418,635
|
|
|
100.0
|
%
|
|
2.27x
|
|
(1)
|
Represents historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any.
|
(2)
|
Each of our leases provides for payment to us of minimum rent. Certain of these minimum payment amounts are secured by full or limited guarantees. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments, if any, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA, and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis, or any reimbursement of expenses paid by us.
|
(3)
|
As of September 30, 2019, we have 148 net lease properties with a carrying value of $604,989 and annual minimum rent of $43,081 classified as held for sale.
|
(4)
|
See page 39 for our definition of coverage. Coverage amounts include data for certain properties for periods prior to when we assumed ownership of them.
|
(5)
|
Leases subject to full or partial corporate guarantee.
|
(6)
|
TA is our largest tenant. We lease 179 travel centers (134 under the TravelCenters of America brand and 45 under the Petro Stopping Centers brand) to a subsidiary of TA under master leases that expire in 2029, 2031, 2032, 2033 and 2035, respectively. TA has two renewal options for 15 years each for all of the travel centers. In addition to the payment of our minimum rent, the TA leases provide for payment to us of percentage rent based on increases in total non-fuel revenues over base levels (3% of non-fuel revenues above 2015 non-fuel revenues). Commencing in 2020, these leases provide for payment of an additional half percent (0.5%) of non-fuel revenues above 2019 non-fuel base revenues. TA's remaining deferred rent obligation of $61,650 is being paid in quarterly installments of $4,404 through January 31, 2023.
|
(7)
|
On October 29, 2019, we sold a net lease office property in Las Vegas, NV with 138,558 square feet with annual minimum rent of $3,561 as of September 30, 2019 for $57,000, excluding closing costs.
|
(8)
|
Other includes 270 tenants with an average investment of $6,850 and average annual minimum rent of $470.
|
Industry
|
|
No. of Buildings
|
|
Investment (1) (2)
|
|
Percent of Total Investment
|
|
Annualized
Minimum Rent (2) (3)
|
|
Percent of Total Annualized
Minimum Rent
|
|
Coverage (4)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Travel Centers
|
|
182
|
|
$
|
3,344,497
|
|
|
58.0%
|
|
$
|
249,209
|
|
|
59.4
|
%
|
|
1.85x
|
Restaurants-Quick Service
|
|
301
|
|
382,275
|
|
|
6.6%
|
|
25,473
|
|
|
6.1
|
%
|
|
2.27x
|
||
Movie Theaters
|
|
29
|
|
271,441
|
|
|
4.7%
|
|
23,479
|
|
|
5.6
|
%
|
|
1.51x
|
||
Restaurants-Casual Dining
|
|
87
|
|
302,734
|
|
|
5.2%
|
|
19,095
|
|
|
4.6
|
%
|
|
2.56x
|
||
Health and Fitness
|
|
17
|
|
208,975
|
|
|
3.6%
|
|
12,704
|
|
|
3.0
|
%
|
|
2.40x
|
||
Miscellaneous Retail
|
|
21
|
|
129,364
|
|
|
2.2%
|
|
9,986
|
|
|
2.4
|
%
|
|
3.49x
|
||
Medical/Dental Office
|
|
79
|
|
127,973
|
|
|
2.2%
|
|
8,886
|
|
|
2.1
|
%
|
|
4.98x
|
||
Automotive Parts and Service
|
|
73
|
|
126,263
|
|
|
2.2%
|
|
8,719
|
|
|
2.1
|
%
|
|
2.75x
|
||
Grocery
|
|
19
|
|
129,219
|
|
|
2.2%
|
|
8,587
|
|
|
2.1
|
%
|
|
2.99x
|
||
Automotive Dealers
|
|
12
|
|
110,059
|
|
|
1.9%
|
|
8,176
|
|
|
2.0
|
%
|
|
3.65x
|
||
Educational Services
|
|
14
|
|
95,227
|
|
|
1.6%
|
|
7,677
|
|
|
1.8
|
%
|
|
1.46x
|
||
Home Furnishings
|
|
18
|
|
123,653
|
|
|
2.1%
|
|
7,549
|
|
|
1.8
|
%
|
|
2.69x
|
||
Apparel
|
|
3
|
|
82,284
|
|
|
1.4%
|
|
6,086
|
|
|
1.5
|
%
|
|
1.57x
|
||
Other
|
|
3
|
|
64,366
|
|
|
1.1%
|
|
5,001
|
|
|
1.2
|
%
|
|
2.47x
|
||
Entertainment
|
|
4
|
|
61,436
|
|
|
1.1%
|
|
4,222
|
|
|
1.0
|
%
|
|
1.97x
|
||
Sporting Goods
|
|
3
|
|
52,022
|
|
|
0.9%
|
|
3,481
|
|
|
0.8
|
%
|
|
2.82x
|
||
Miscellaneous Manufacturing
|
|
7
|
|
32,873
|
|
|
0.6%
|
|
2,402
|
|
|
0.6
|
%
|
|
25.28x
|
||
Car Washes
|
|
6
|
|
32,028
|
|
|
0.6%
|
|
2,319
|
|
|
0.6
|
%
|
|
4.56x
|
||
Building Materials
|
|
28
|
|
31,124
|
|
|
0.5%
|
|
2,124
|
|
|
0.5
|
%
|
|
3.15x
|
||
Drug Stores and Pharmacies
|
|
8
|
|
23,970
|
|
|
0.4%
|
|
1,646
|
|
|
0.4
|
%
|
|
1.79x
|
||
Legal Services
|
|
5
|
|
11,362
|
|
|
0.2%
|
|
974
|
|
|
0.2
|
%
|
|
1.47x
|
||
General Merchandise
|
|
3
|
|
7,492
|
|
|
0.1%
|
|
555
|
|
|
0.1
|
%
|
|
3.27x
|
||
Dollar Stores
|
|
5
|
|
7,196
|
|
|
0.1%
|
|
285
|
|
|
0.1
|
%
|
|
2.89x
|
||
Vacant
|
|
19
|
|
27,364
|
|
|
0.5%
|
|
—
|
|
|
—
|
%
|
|
N/A
|
||
Total
|
|
946
|
|
$
|
5,785,197
|
|
|
100.0%
|
|
$
|
418,635
|
|
|
100.0
|
%
|
|
2.27x
|
(1)
|
Represents historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any.
|
(2)
|
As of September 30, 2019, we have 148 net lease properties with a carrying value of $604,989 and annual minimum rent of $43,081 classified as held for sale.
|
(3)
|
Each of our leases provides for payment to us of minimum rent, respectively. Certain of these minimum payment amounts are secured by full or limited guarantees. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments, if any, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA, and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis, or any reimbursement of expenses paid by us.
|
(4)
|
See page 39 for our definition of coverage. Coverage amounts include data for certain properties for periods prior to when we assumed ownership of them.
|
|
|
|
|
|
|
Percent of Total
|
|
Cumulative % of
|
|||
|
|
Square
|
|
Annualized Minimum
|
|
Annualized Minimum
|
|
Total Minimum
|
|||
Year(1)
|
|
Feet
|
|
Rent Expiring (2)
|
|
Rent Expiring
|
|
Rent Expiring
|
|||
|
|
|
|
|
|
|
|
|
|||
2019
|
|
215,102
|
|
|
$
|
1,313
|
|
|
0.3%
|
|
0.3%
|
2020
|
|
482,492
|
|
|
6,799
|
|
|
1.6%
|
|
1.9%
|
|
2021
|
|
708,121
|
|
|
9,398
|
|
|
2.2%
|
|
4.1%
|
|
2022
|
|
1,071,820
|
|
|
12,408
|
|
|
3.0%
|
|
7.1%
|
|
2023
|
|
371,812
|
|
|
4,200
|
|
|
1.0%
|
|
8.1%
|
|
2024
|
|
773,833
|
|
|
11,924
|
|
|
2.8%
|
|
10.9%
|
|
2025
|
|
496,061
|
|
|
11,995
|
|
|
2.9%
|
|
13.8%
|
|
2026
|
|
1,805,166
|
|
|
17,702
|
|
|
4.2%
|
|
18.0%
|
|
2027
|
|
1,903,833
|
|
|
24,643
|
|
|
5.9%
|
|
23.9%
|
|
2028
|
|
796,385
|
|
|
13,838
|
|
|
3.3%
|
|
27.2%
|
|
2029
|
|
1,590,922
|
|
|
50,122
|
|
|
12.0%
|
|
39.2%
|
|
2030
|
|
201,492
|
|
|
4,443
|
|
|
1.1%
|
|
40.3%
|
|
2031
|
|
1,405,662
|
|
|
50,535
|
|
|
12.1%
|
|
52.4%
|
|
2032
|
|
1,230,829
|
|
|
50,182
|
|
|
12.0%
|
|
64.4%
|
|
2033
|
|
1,217,338
|
|
|
52,466
|
|
|
12.5%
|
|
76.9%
|
|
2034
|
|
399,368
|
|
|
11,903
|
|
|
2.8%
|
|
79.7%
|
|
2035
|
|
2,241,467
|
|
|
79,995
|
|
|
19.1%
|
|
98.8%
|
|
2036
|
|
274,141
|
|
|
3,854
|
|
|
1.0%
|
|
99.8%
|
|
2037
|
|
—
|
|
|
—
|
|
|
0.0%
|
|
—%
|
|
2038
|
|
10,183
|
|
|
409
|
|
|
0.1%
|
|
99.9%
|
|
2039
|
|
40,334
|
|
|
438
|
|
|
0.1%
|
|
100.0%
|
|
2040
|
|
1,739
|
|
|
68
|
|
|
0.0%
|
|
100.0%
|
|
Total
|
|
17,238,100
|
|
|
$
|
418,635
|
|
|
100.0%
|
|
|
(1)
|
The year of lease expiration is pursuant to contract terms.
|
(2)
|
As of September 30, 2019, we have 148 net lease properties with a carrying value of $604,989 and annual minimum rent of $43,081 classified as held for sale.
|
|
|
|
|
|
|
Percent of Total
|
|||
|
|
Square
|
|
Annualized Minimum
|
|
Annualized Minimum
|
|||
State
|
|
Feet
|
|
Rent
|
|
Rent
|
|||
|
|
|
|
|
|
|
|||
Texas
|
|
1,551,655
|
|
|
$
|
34,599
|
|
|
8.3%
|
Illinois
|
|
1,174,051
|
|
|
30,775
|
|
|
7.4%
|
|
Ohio
|
|
1,449,126
|
|
|
27,697
|
|
|
6.6%
|
|
California
|
|
399,045
|
|
|
23,230
|
|
|
5.5%
|
|
Georgia
|
|
716,878
|
|
|
22,202
|
|
|
5.3%
|
|
Indiana
|
|
762,556
|
|
|
21,057
|
|
|
5.0%
|
|
Arizona
|
|
543,972
|
|
|
17,587
|
|
|
4.2%
|
|
Florida
|
|
562,324
|
|
|
16,224
|
|
|
3.9%
|
|
Pennsylvania
|
|
642,533
|
|
|
15,441
|
|
|
3.7%
|
|
Nevada
|
|
328,820
|
|
|
13,165
|
|
|
3.1%
|
|
Michigan
|
|
715,471
|
|
|
11,692
|
|
|
2.8%
|
|
New Mexico
|
|
246,478
|
|
|
10,982
|
|
|
2.6%
|
|
Tennessee
|
|
293,543
|
|
|
10,965
|
|
|
2.6%
|
|
Missouri
|
|
532,849
|
|
|
10,757
|
|
|
2.6%
|
|
South Carolina
|
|
418,883
|
|
|
10,003
|
|
|
2.4%
|
|
New York
|
|
234,464
|
|
|
9,220
|
|
|
2.2%
|
|
Colorado
|
|
370,532
|
|
|
9,068
|
|
|
2.2%
|
|
North Carolina
|
|
474,095
|
|
|
8,785
|
|
|
2.1%
|
|
Alabama
|
|
228,722
|
|
|
8,694
|
|
|
2.1%
|
|
Arkansas
|
|
436,134
|
|
|
8,386
|
|
|
2.0%
|
|
Other
|
|
5,481,328
|
|
|
98,106
|
|
|
23.4%
|
|
Total
|
|
17,563,459
|
|
|
$
|
418,635
|
|
|
100.0%
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
40,074
|
|
|
$
|
117,099
|
|
|
$
|
274,643
|
|
|
$
|
294,594
|
|
|
Add (Less):
|
Depreciation and amortization expense
|
|
103,160
|
|
|
101,007
|
|
|
301,721
|
|
|
300,308
|
|
||||
|
Gain on sale of real estate (1)
|
|
—
|
|
|
—
|
|
|
(159,535
|
)
|
|
—
|
|
||||
|
Unrealized (gains) and losses on equity securities, net (2)
|
|
3,950
|
|
|
(43,453
|
)
|
|
43,761
|
|
|
(89,348
|
)
|
||||
FFO
|
|
147,184
|
|
|
174,653
|
|
|
460,590
|
|
|
505,554
|
|
|||||
Add:
|
Loss on early extinguishment of debt (3)
|
|
8,451
|
|
|
—
|
|
|
8,451
|
|
|
160
|
|
||||
Normalized FFO
|
|
$
|
155,635
|
|
|
$
|
174,653
|
|
|
$
|
469,041
|
|
|
$
|
505,714
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares outstanding (basic)
|
|
164,321
|
|
|
164,232
|
|
|
164,294
|
|
|
164,212
|
|
||||
|
Weighted average shares outstanding (diluted) (4)
|
|
164,348
|
|
|
164,274
|
|
|
164,332
|
|
|
164,242
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted per common share amounts:
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income
|
|
$
|
0.24
|
|
|
$
|
0.71
|
|
|
$
|
1.67
|
|
|
$
|
1.79
|
|
|
FFO
|
|
$
|
0.90
|
|
|
$
|
1.06
|
|
|
$
|
2.80
|
|
|
$
|
3.08
|
|
|
Normalized FFO
|
|
$
|
0.95
|
|
|
$
|
1.06
|
|
|
$
|
2.85
|
|
|
$
|
3.08
|
|
|
Distributions declared per share
|
|
$
|
0.54
|
|
|
$
|
0.53
|
|
|
$
|
1.61
|
|
|
$
|
1.58
|
|
(1)
|
We recorded a $159,535 gain on sale of real estate during the three months ended March 31, 2019 in connection with the sales of 20 travel centers.
|
(2)
|
Unrealized gains and losses on equity securities, net represent the adjustment required to adjust the carrying value of our investments in RMR Inc. and TA common shares to their fair value as of the end of the period. We sold our shares of RMR Inc. on July 1, 2019.
|
(3)
|
We recorded a loss of $8,451 on early extinguishment of debt in the three months ended September 30, 2019 related to the termination of a term loan commitment we arranged in connection with the SMTA Transaction. We recorded a loss of $160 on early extinguishment of debt in the three months ended June 30, 2018 in connection with amending our revolving credit facility and term loan.
|
(4)
|
Represents weighted average common shares adjusted to reflect the potential dilution of unvested share awards.
|
Principal Balance
|
|
Annual Interest
Rate
|
|
Annual Interest
Expense
|
|
Maturity
|
|
Interest Payments
Due
|
|||||
$
|
400,000
|
|
|
4.250
|
%
|
|
$
|
17,000
|
|
|
2021
|
|
Semi-Annually
|
500,000
|
|
|
5.000
|
%
|
|
25,000
|
|
|
2022
|
|
Semi-Annually
|
||
500,000
|
|
|
4.500
|
%
|
|
22,500
|
|
|
2023
|
|
Semi-Annually
|
||
350,000
|
|
|
4.650
|
%
|
|
16,275
|
|
|
2024
|
|
Semi-Annually
|
||
825,000
|
|
|
4.350
|
%
|
|
35,888
|
|
|
2024
|
|
Semi-Annually
|
||
350,000
|
|
|
4.500
|
%
|
|
15,750
|
|
|
2025
|
|
Semi-Annually
|
||
350,000
|
|
|
5.250
|
%
|
|
18,375
|
|
|
2026
|
|
Semi-Annually
|
||
450,000
|
|
|
4.750
|
%
|
|
21,375
|
|
|
2026
|
|
Semi-Annually
|
||
400,000
|
|
|
4.950
|
%
|
|
19,800
|
|
|
2027
|
|
Semi-Annually
|
||
400,000
|
|
|
3.950
|
%
|
|
15,800
|
|
|
2028
|
|
Semi-Annually
|
||
425,000
|
|
|
4.950
|
%
|
|
21,038
|
|
|
2029
|
|
Semi-Annually
|
||
400,000
|
|
|
4.375
|
%
|
|
17,500
|
|
|
2030
|
|
Semi-Annually
|
||
$
|
5,350,000
|
|
|
|
|
$
|
246,301
|
|
|
|
|
|
|
|
Impact of Increase in Interest Rates
|
|
|
|||||||||||
|
|
Interest Rate
Per Year (1)
|
|
Outstanding
Debt
|
|
Total Interest
Expense Per Year
|
|
Annual Per
Share Impact (2)
|
|||||||
At September 30, 2019
|
|
3.02
|
%
|
|
$
|
1,190,000
|
|
|
$
|
35,938
|
|
|
$
|
0.22
|
|
One percentage point increase
|
|
4.02
|
%
|
|
$
|
1,190,000
|
|
|
$
|
47,838
|
|
|
$
|
0.29
|
|
|
|
Impact of Increase in Interest Rates
|
|
|
|||||||||||
|
|
Interest Rate
Per Year (1)
|
|
Outstanding
Debt
|
|
Total Interest
Expense Per Year
|
|
Annual Per
Share Impact (2)
|
|||||||
At September 30, 2019
|
|
2.99
|
%
|
|
$
|
1,400,000
|
|
|
$
|
41,860
|
|
|
$
|
0.25
|
|
One percentage point increase
|
|
3.99
|
%
|
|
$
|
1,400,000
|
|
|
$
|
55,860
|
|
|
$
|
0.34
|
|
(1)
|
Weighted average based on the interest rates and the respective outstanding borrowings (assuming fully drawn) as of September 30, 2019.
|
(2)
|
Based on diluted weighted average common shares outstanding for the nine months ended September 30, 2019.
|
•
|
The performance of our operators’ abilities to pay the contractual amounts of returns or rents due to us,
|
•
|
Our sales and acquisition of properties,
|
•
|
Our ability to compete for acquisitions effectively,
|
•
|
Our policies and plans regarding investments, financings and dispositions,
|
•
|
Our ability to pay distributions to our shareholders and to sustain the amount of such distributions,
|
•
|
Our ability to raise debt or equity capital,
|
•
|
Our ability to appropriately balance our use of debt and equity capital,
|
•
|
Our intent to make improvements to certain of our properties and the success of our hotel renovations,
|
•
|
Our ability to engage and retain qualified managers and tenants for our hotels and net lease properties on satisfactory terms,
|
•
|
The future availability of borrowings under our revolving credit facility,
|
•
|
Our ability to pay interest on and principal of our debt,
|
•
|
Our credit ratings,
|
•
|
The ability of TA to pay current and deferred rent amounts and other obligations due to us,
|
•
|
Our expectation that we benefit from our relationships with RMR Inc.,
|
•
|
Our qualification for taxation as a REIT,
|
•
|
Changes in federal or state tax laws, and
|
•
|
Other matters.
|
•
|
The impact of conditions in the economy and the capital markets on us and our managers and tenants,
|
•
|
Competition within the real estate, hotel, transportation and travel center and other industries in which our tenants operate, particularly in those markets in which our properties are located,
|
•
|
Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,
|
•
|
Limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes,
|
•
|
Acts of terrorism, outbreaks of so-called pandemics or other manmade or natural disasters beyond our control, and
|
•
|
Actual and potential conflicts of interest with our related parties, including our managing trustees, TA, Sonesta, RMR Inc., RMR LLC and others affiliated with them.
|
•
|
Our ability to make future distributions to our shareholders and to make payments of principal and interest on our indebtedness depends upon a number of factors, including our future earnings, the capital costs we incur to acquire and maintain our properties and our working capital requirements. We may be unable to pay our debt obligations or to increase or maintain our current rate of distributions on our common shares and future distributions may be reduced or eliminated,
|
•
|
The security deposits which we hold are not in segregated cash accounts or otherwise separate from our other assets and liabilities. Accordingly, when we record income by reducing our security deposit liabilities, we do not receive any additional cash payment. Because we do not receive any additional cash payment as we apply security deposits to cover payment shortfalls, the failure of our managers or tenants to pay minimum returns or rents due to us may reduce our cash flows and our ability to pay distributions to shareholders,
|
•
|
Certain of our aggregate annual minimum returns and rents were secured by guarantees or security deposits from our 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’ abilities and willingness to pay. We cannot be sure of the future financial performance of our properties and whether such performance will cover our 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 us which they guarantee or secure, or regarding our managers’, tenants’ or guarantors’ future actions if and when the guarantees and security deposits expire or are depleted or their abilities or willingness to pay minimum returns and rents owed to us. Moreover, the security deposits we hold are not segregated from our other assets and, although the application of security deposits to cover payment shortfalls will result in us recording income, it will not result in us receiving additional cash. The balance of our annual minimum returns and rents as of September 30, 2019 was not secured by guarantees or security deposits,
|
•
|
We have no guarantees or security deposits for the minimum returns due to us from our Marriott No. 1, Sonesta or Wyndham agreements. Accordingly, we may receive amounts that are less than the contractual minimum returns stated in these agreements,
|
•
|
We have recently renovated certain hotels and are currently renovating additional hotels. We currently expect to fund approximately $127.5 million during the last three months of 2019 and $28.0 million in 2020 for renovations and other capital improvement costs at certain of our hotels. The cost of capital projects associated with such renovations may be greater than we currently anticipate. Operating results at our hotels may decline as a result of having rooms out of service or other disruptions during renovations. Also, while our funding of these capital projects will cause our contractual minimum returns to increase, the hotels’ operating results may not increase or may not increase to the extent that the minimum returns increase. Accordingly, coverage of our minimum returns at these hotels may remain depressed for an extended period,
|
•
|
Hotel room demand and trucking activity are often reflections of the general economic activity in the country and in the geographic areas where certain of our properties are located. If economic activity declines, the operating results of certain of our properties may decline, the financial results of our managers and our tenants may suffer and these managers and tenants may be unable to pay our returns or rents. Also, depressed operating results from our properties for extended periods may result in the operators of some or all of our properties becoming unable or unwilling to meet their obligations or their guarantees and security deposits we hold may be exhausted,
|
•
|
Hotel and other competitive forms of temporary lodging supply (for example, Airbnb) have been increasing and may affect our hotel operators’ ability to grow ADR and occupancy, and ADR and occupancy could decline due to increased competition which may cause our hotel operators to become unable to pay our returns or rents,
|
•
|
If the current level of commercial activity in the country declines, if the price of diesel fuel increases significantly, if fuel conservation measures are increased, if freight business is directed away from trucking, if TA is unable to effectively compete or operate its business, if fuel efficiencies, the use of alternative fuels or transportation technologies reduce the demand for products and services TA sells or for various other reasons, TA may become unable to pay current and deferred rents due to us,
|
•
|
Our ability to grow our business and increase our distributions depends in large part upon our ability to buy properties that generate returns or can be leased for rents which exceed our operating and capital costs. We may be unable to identify properties that we want to acquire and we may fail to reach agreement with the sellers and complete the purchases of any properties we do want to acquire. In addition, any properties we may acquire may not generate returns or rents which exceed our operating and capital costs,
|
•
|
We may not realize the benefits we expect from the SMTA Transaction, including a more secure financial profile, increased scale and greater diversity in tenant base, property type and geography, and we may realize losses as a result of the transaction,
|
•
|
We believe that our portfolio agreements include diverse groups of properties. Our portfolio agreements may not increase the security of our cash flows or increase the likelihood our agreements will be renewed as we expect,
|
•
|
We expect that most of our acquisition efforts will focus on hotel and net lease service-oriented based properties; however, the focus of our acquisition efforts may include other types of properties,
|
•
|
To reduce our leverage, we have sold assets and have targeted additional assets to sell aggregating approximately $800.0 million. We may not complete the sales of any additional assets we plan to sell, and we may determine to sell fewer, additional or other assets than those we may target for sale. Also, we may sell assets at prices that are less than we expect and less than their carrying values and we may incur losses on these sales or with respect to these assets, or may not ultimately use any proceeds we may receive to reduce debt leverage,
|
•
|
Contingencies in our acquisition and sale agreements may not be satisfied and any expected acquisitions and sales and any related management or lease arrangements we expect to enter may not occur, may be delayed or the terms of such transactions or arrangements may change,
|
•
|
At September 30, 2019, we had $17.0 million of cash and cash equivalents, $210.0 million available under our $1.0 billion revolving credit facility and security deposits and guarantees covering some of our minimum returns and rents. These statements may imply that we have sufficient working capital and liquidity. However, our managers and tenants may not be able to fund minimum returns and rents due to us from operating our properties or from other resources; in the past and currently, certain of our tenants and managers have in fact not paid the minimum amounts due to us from their operations of our leased or managed properties. Also, certain of the security deposits and guarantees we have to cover any such shortfalls are limited in amount and duration, and any security deposits we apply for such shortfalls do not result in additional cash flows to us. Our properties require, and we have agreed to provide, significant funding for capital improvements, renovations and other matters. Accordingly, we may not have sufficient working capital or liquidity,
|
•
|
We may be unable to repay our debt obligations when they become due,
|
•
|
We intend to conduct our business activities in a manner that will afford us reasonable access to capital for investment and financing activities. However, we may not succeed in this regard and we may not have reasonable access to capital,
|
•
|
Continued availability of borrowings under our revolving credit facility is subject to our satisfying certain financial covenants and other credit facility conditions that we may be unable to satisfy,
|
•
|
Actual costs under our revolving credit facility or other floating rate debt will be higher than LIBOR plus a premium because of fees and expenses associated with such debt,
|
•
|
The maximum borrowing availability under our revolving credit facility and term loan may be increased to up to $2.3 billion on a combined basis in certain circumstances; however, increasing the maximum borrowing availability under
|
•
|
The premiums used to determine the interest rate payable on our revolving credit facility and term loan and the facility fee payable on our revolving credit facility are based on our credit ratings. Changes in our credit ratings may cause the interest and fees we pay to increase,
|
•
|
We have the option to extend the maturity date of our revolving credit facility upon payment of a fee and meeting other conditions; however, the applicable conditions may not be met,
|
•
|
The business and property management agreements between us and RMR LLC have continuing 20 year terms. However, those agreements permit early termination in certain circumstances. Accordingly, we cannot be sure that these agreements will remain in effect for continuing 20 year terms,
|
•
|
We believe that our relationships with our related parties, including RMR LLC, RMR Inc., TA, Sonesta and others affiliated with them may benefit us and provide us with competitive advantages in operating and growing our business. However, the advantages we believe we may realize from these relationships may not materialize,
|
•
|
Marriott has notified us that it does not intend to extend its lease for our resort hotel on Kauai, Hawaii when that lease expires on December 31, 2019. We are in negotiations with Marriott regarding this hotel and other hotels managed by Marriott. If we and Marriott are unable to reach agreement, we will evaluate alternatives for the Kauai hotel, which may include rebranding or selling the hotel. These statements may imply that Marriott will not operate the Kauai hotel in the future or that we may have other alternatives for this hotel that may be more beneficial to maintaining Marriott as the operator of that hotel if we are unable to reach agreement with Marriott. At this time, we cannot predict how our negotiations with Marriott will impact the future of the Kauai hotel or our disposition plans for certain hotels. For example, the Kauai hotel may continue to be operated by Marriott on different contract terms than the current lease, we may identify a different operator for this hotel or the cash flows which we receive from our ownership of this hotel may be different than the rent we now receive. Also, although the current lease expires on December 31, 2019, we and Marriott may agree upon a different termination date. Our discussions with Marriott are ongoing and we cannot be certain we will reach any agreement with Marriott for the Kauai or any other Marriott managed hotel that we own and our disposition plans may change or we may sell more or less assets than we currently intend or none at all. There can be no assurance we can find buyers for our properties or sell them at attractive prices,
|
•
|
We are exiting our relationship with Wyndham and expect to rebrand or sell our 22 hotels currently managed by Wyndham. There can be no assurance that rebranding any of these hotels will result in improved performance. In fact, rebranding hotels will result in short term disruption to operations. In addition, we cannot be sure we will be able to sell any of these hotels and any sales we may complete may be at prices less than we expect and less than net book value. We may incur losses in connection with any rebranding or sales of these hotels or as a result of any plan to rebrand or sell these hotels,
|
•
|
We expect to receive a capital distribution in the fourth quarter of 2019 in connection with the dissolution of AIC. We cannot be sure that such distribution will occur when expected or at all or what the amount of any such distribution will be, and
|
•
|
We are currently exploring secured financing and the formation of a joint venture with a portfolio of travel centers. There can be no assurance we will be successful with any financing or this venture or move forward at all with such transactions.
|
•
|
increasing our vulnerability to general adverse economic and business conditions;
|
•
|
increasing the costs to us of incurring additional debt;
|
•
|
increasing our exposure to floating interest rates;
|
•
|
limiting our ability to compete with other companies that are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;
|
•
|
restricting us from making strategic acquisitions, developing properties or exploiting business opportunities;
|
•
|
restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness;
|
•
|
exposing us to potential events of default (if not cured or waived) under covenants contained in debt instruments that could have a material adverse effect on our business, financial condition and operating results;
|
•
|
limiting our ability to react to changing market conditions in our industry;
|
•
|
limiting our ability to obtain additional financing to fund future acquisitions, working capital, capital expenditures and other general business requirements;
|
•
|
requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures, distributions to our shareholders and general operating requirements; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business.
|
•
|
Our ability to pay distributions may be adversely affected if any of the risks described herein or in our 2018 Annual Report, or other significant events, occur;
|
•
|
Our declaration and payment of distributions is subject to compliance with restrictions contained in our revolving credit facility and term loan agreement and may be subject to restrictions governing future debt that we may incur;
|
•
|
We may desire to retain cash to obtain, maintain or improve our credit ratings, to reduce leverage or pursue other business opportunities; and
|
•
|
We have no obligation to pay distributions, and each distribution is made at the discretion of our Board of Trustees and the payment of a distribution depends on various factors that our Board of Trustees at the time deems relevant, including among other things, requirements to maintain our qualification for taxation as a REIT, limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our dividend yield and the dividend yield of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations.
|
Calendar Month
|
|
Number of Shares Purchased (1)
|
|
|
Average Price Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
July 2019
|
|
5,041
|
|
$
|
25.20
|
|
$
|
—
|
|
$
|
—
|
September 2019
|
|
24,293
|
|
|
25.64
|
|
$
|
—
|
|
$
|
—
|
Total
|
|
29,334
|
|
$
|
25.56
|
|
$
|
—
|
|
$
|
—
|
(1)
|
These common share withholdings and purchases were made to satisfy the tax withholding and payment obligations of certain of our current and former officers and certain other current and former RMR LLC employees in connection with awards of our common shares and the vesting of awards of those and prior awards of common shares to them. We withheld and purchased these shares at their fair market value based upon the trading price of our common shares at the close of trading on Nasdaq on the purchase date.
|
Exhibit
Number
|
|
Description
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
4.10
|
|
|
Exhibit
Number
|
|
Description
|
|
4.11
|
|
|
|
4.12
|
|
|
|
4.13
|
|
|
|
4.14
|
|
|
|
4.15
|
|
|
|
4.16
|
|
|
|
4.17
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
Exhibit
Number
|
|
Description
|
|
32.1
|
|
|
|
101.INS
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document. (Filed herewith.)
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
|
104
|
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
|
|
SERVICE PROPERTIES TRUST
|
|
|
|
|
|
/s/ John G. Murray
|
|
John G. Murray
|
|
President and Chief Executive Officer
|
|
Dated: November 8, 2019
|
|
|
|
|
|
/s/ Brian E. Donley
|
|
Brian E. Donley
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial and Accounting Officer)
|
|
Dated: November 8, 2019
|
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