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Hospitality Properties Trust Announces 2009 Third Quarter Results.

Article Excerpt
NEWTON, Mass. -- Hospitality Properties Trust (NYSE: HPT) today announced its operating results for the quarter and nine months ended September 30, 2009.

Results for the Quarter and Nine Months Ended September 30, 2009:

HPT's net income available for common shareholders for the periods ended September 30, 2009 compared to the same periods in 2008 were as follows:

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Net income available for common shareholders for the quarter ended September 30, 2009 includes a $11.2 million, or $0.09 per share, gain on extinguishment of debt relating to HPT's repurchase of $175.4 million face amount of its 3.8% convertible senior notes for a purchase price of $159.5 million plus accrued interest.

The results for the nine months ended September 30, 2009 includes a $51.1 million, or $0.50 per share, gain on extinguishment of debt relating to HPT's repurchase of $367.4 million face amount of its 3.8% convertible senior notes and various issues of its senior notes for an aggregate purchase price of approximately $303.3 million plus accrued interest.

The results for the nine months ended September 30, 2008 include: (i) a $53.2 million, or $0.57 per share, non-cash impairment charge related to the write down of certain intangible assets arising from HPT's January 2007 acquisition of TravelCenters of America, Inc. to their estimated fair market value; and (ii) a $19.6 million, or $0.21 per share, non-cash charge to record a reserve for the straight line rent receivable recorded in periods prior to April 1, 2008 under HPT's lease with TravelCenters of America LLC (NYSE Amex: TA) for 145 travel centers.

HPT's funds from operations, or FFO, for the periods ended September 30, 2009 compared to the same periods in 2008 were as follows:

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FFO for the quarter and nine months ended September 30, 2009 excludes the $11.2 million and $51.1 million, respectively, of gains on extinguishment of debt discussed above. FFO for the nine months ended September 30, 2008 excludes the $53.2 million non-cash impairment charge discussed above.

See page 5 for a reconciliation of FFO to net income available to common shareholders.

Hotel Portfolio Performance:

For the periods ended September 30, 2009 compared to the same periods last year, HPT's hotels produced revenue per available room, or RevPAR, average daily rate, or ADR, and occupancy as follows:

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Hotel Tenants and Managers:

During the nine months ended September 30, 2009, all payments due to HPT under its hotel leases and management contracts were paid when due except for certain payments from Marriott International, Inc., or Marriott, and Barcelo Crestline Corporation, or Crestline.

During the nine months ended September 30, 2009, the payments HPT received under its lease with Crestline (Marriott No. 4 contract: 19 hotels managed by Marriott which requires minimum rent to HPT of $28.5 million/year) and under its management contract with Marriott (Marriott No. 3 contract: 34 hotels which requires minimum returns to HPT of $44.2 million/year) were $5.8 million and $4.8 million, respectively, less than the minimum amounts contractually required. HPT applied the available security deposits to cover these shortfalls. Also, during the period between September 30, 2009 and November 8, 2009, HPT did not receive payments to cure shortfalls for the minimum rent due under...

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