PALM BEACH, Fla., Nov. 7 /PRNewswire-FirstCall/ -- Innkeepers USA
Trust (NYSE:KPA), a hotel real estate investment trust (REIT) and a
leading owner of upscale properties throughout the United States,
today announced results for the three months and nine months ended
September 30, 2006.
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% YTD YTD % Q3 2006 Q3 2005 Change* 2006 2005 Change*
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Total revenue $73,051 $67,095 9% $210,843 $186,264 13%
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Net income applicable to common shareholders $7,100 $6,837 4%
$18,774 $11,185 68%
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Diluted income per share $0.16 $0.16 0% $0.42 $0.27 56%
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Funds from operations (FFO) $17,125 $16,970 1% $48,997 $39,310 25%
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Adjusted FFO $17,125 $16,967 1% $48,551 $42,487 14%
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Diluted FFO per share $0.36 $0.36 0% $1.03 $0.84 23%
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Adjusted FFO per share $0.36 $0.36 0% $1.02 $0.91 12%
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Earnings before interest, taxes, depreciation and amortization
(EBITDA) $26,366 $25,404 4% $76,755 $65,826 17%
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Adjusted EBITDA $26,366 $25,390 4% $76,233 $67,502 13%
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* In thousands, except per share and percentage change data FFO,
Adjusted FFO, FFO per share, Adjusted FFO per share, EBITDA and
Adjusted EBITDA are not GAAP (generally accepted accounting
principles) financial measures and are discussed in further detail
and reconciled to net income applicable to common shareholders
later in this press release. Adjusted FFO, Adjusted FFO per share
and Adjusted EBITDA exclude other charges and discontinued
operations. Operating Results Revenue per available room (RevPAR)
at the company's 66 comparable hotels rose 6.3 percent to $88.36
for the 2006 third quarter, reflecting an 8.2 percent increase in
average daily rate (ADR) to $114.80 and a 140 basis points decline
in occupancy to 77.0 percent. The comparable hotels for the 2006
third quarter exclude the Boston Bulfinch, which was acquired in
2005, and three hotels that were not open for all of the 2005 and
2006 third quarters, including the Hampton Inn Louisville, Ky., and
the two hotels in Montvale and Atlantic City, N.J. being converted
to the Courtyard by Marriott brand. For the 2006 nine months, at
the company's 65 comparable hotels (also excludes the Westin
Morristown, N.J.), the company reported a 7.1 percent increase in
RevPAR to $85.34, with ADR up 7.6 percent to $111.84, partially
offset by a decrease in occupancy of approximately 60 basis points
to 76.3 percent. "We had a disappointing quarter from an FFO growth
standpoint, as FFO remained flat year over year despite a 6.3
percent increase in RevPAR," said Jeffrey H. Fisher, chief
executive officer and president. "Industry RevPAR growth was not as
robust and grew at a rate of 6.0 percent in the third quarter
versus 9.7 percent in the first quarter and 8.3 percent in the
second quarter. We were not able to generate positive flowthrough
to FFO on our RevPAR growth due to significant increases in
utilities costs, insurance and taxes. Combined, these items
impacted FFO by $0.03 in the quarter. Although FFO did not meet
both our own and consensus estimates, there were a number of
positive developments in the third quarter: our RevPAR growth and
ADR growth outperformed the industry, we increased our dividend 33
percent and we acquired or are in the process of acquiring nearly
$250 million in high- quality assets, an increase of 25 percent to
our investment in hotels." The 2006 third quarter RevPAR
improvement reflects a 14.7 percent increase in RevPAR at the
company's eight Silicon Valley, Calif. hotel properties, comprising
a 4.7 percentage point rise in occupancy to 84.3 percent and a 9.5
percent advance in ADR to $120.68. Year to date, the Silicon Valley
properties experienced a 20.4 percent increase in RevPAR, with a
10.2 percentage point increase in occupancy to 82.5 percent and a
9.2 percent rise in ADR. Excluding Silicon Valley, RevPAR for the
company's comparable hotels increased 4.7 percent in the 2006 third
quarter and 4.6 percent year to date. Gross operating profit (GOP)
margins (hotel revenue less hotel expenses, before property taxes
and insurance) for the company's comparable hotels declined 70
basis points in the quarter to 43.5 percent. For the quarter, GOP
flowthrough (increase in GOP compared to the increase in revenue)
was 32 percent; however, after adjusting for the increase in
utilities and an insurance claim in 2005, the company generated a
GOP flowthrough of 52 percent. "The significant increase in
utilities, insurance and property taxes hampered our ability to
meet the consensus estimate," Fisher said. "We are, therefore,
revising our fourth quarter and full-year guidance to reflect these
rising costs. We had a tough quarter from a GOP standpoint, but GOP
margins are still strong at 43.5 percent for the quarter and 45.6
percent year to date, and we should see continued margin growth in
2007." Renovations/Development Update As previously announced, the
company expects to open the renovated and converted Montvale, N.J.
Courtyard by Marriott in early 2007 and the Atlantic City Courtyard
by Marriott in May 2007, while the Valencia Embassy Suites
development is expected to open in June 2007. Acquisitions Update
Fisher noted that the company closed in early October on four
previously announced southern California hotel acquisitions, which
includes two Residence Inns, a Hilton and Hilton Suites. The
company expects to close in the fourth quarter on its acquisition
of the new prototype Sheraton in Rockville, Md., which will be
acquired in a directly negotiated transaction with Starwood Hotels.
Innkeepers expects to acquire the hotel concurrent with the
property's opening. Combined, the five properties will add 1,086
total rooms to Innkeepers' portfolio, an increase of 12.3 percent.
"With the acquisition of these five first-class properties in very
strong markets, we are continuing our push to enhance our portfolio
with high-quality assets in 'A' locations with high barriers to new
competition," he said. "We are setting ourselves up for sustainable
FFO growth and executing our strategy of building long-term
shareholder value with our acquisitions, conversions and
developments." Fisher said that the company has an active
acquisition and development pipeline and continues to target
premium-branded, upscale extended-stay and select-service hotels,
the core of the company's portfolio; selected full- service hotels;
and turn-around opportunities for hotels that operate under or can
be converted to the industry's leading brands. All acquisition
candidates are located in major markets with multiple demand
generators and high barriers to new competition. "These activities
are part of our long-term strategy to transform the overall quality
of our portfolio by deploying our capital into newer, more
profitable assets that will position us for strong future growth
and improve the overall operating margins of our portfolio."
Capital Structure Dennis Craven, chief financial officer, pointed
out that the company continues to maintain one of the industry's
strongest capital structures. During the quarter the company
completed two significant capital transactions: * Amended its
unsecured line of credit to increase the capacity available to $205
million and extended the maturity by more than one year to
September 2008; and * Issued $75 million in 10-year fixed-rate debt
at approximately 6 percent annual interest. The proceeds were used
to reduce borrowings outstanding under the line of credit. "The
execution of these two transactions creates substantial flexibility
under our line of credit to continue to execute on our growth
strategy, while locking in very attractive long-term financing
secured by three quality assets," he said. Additionally, in October
the company borrowed approximately $215 million to finance the
acquisition of the southern California portfolio. "With the
completion of this financing, our weighted average interest rate on
fixed-rate debt dropped 100 basis points from 7.8 percent at June
30th to 6.8 percent, and our average maturity increased
approximately 3 years to 6.6 years. Our debt to investment in
hotels at cost ratio is approximately 39 percent." Dividend In the
third quarter, the company increased its common stock dividend 33
percent to $0.20. "We have raised our dividend three times since
May 2005 based on our confidence in the economy, the hotel industry
and the quality of our portfolio," Fisher said. The company and its
Board of Trustees will continue to evaluate the dividend on a
quarterly basis based on its projections for continued sustainable
growth. Revised Fourth Quarter and Annual 2006 Earnings Guidance
The company's revised fourth quarter and full-year guidance is
based on the recent substantial increased costs for utilities,
insurance and taxes across its portfolio. Based on assumed RevPAR
growth of 6 percent to 8 percent for the quarter at its comparable
hotels and the results from its non- comparable hotels, the company
provides the following range of estimates: * Net income applicable
to common shareholders of $1.0 million to $2.5 million for the
quarter and $19.5 million to $21 million for the full year; *
Diluted income per share of $0.02 to $0.05 for the quarter and
$0.45 to $0.48 for the year; * Adjusted FFO per share of $0.22 to
$0.25 for the quarter and $1.24 to $1.27 for the year; * Adjusted
EBITDA of $23 million to $24.5 million for the quarter and $99.5
million to $101 million for the year. See reconciliations of net
income applicable to common shareholders to FFO per share, Adjusted
FFO per share and Adjusted EBITDA included in the tables of this
press release. FFO per share, Adjusted FFO per share, and Adjusted
EBITDA are not GAAP financial measures and are discussed in further
detail in this press release. The forecasted financial results do
not include any assumptions for future acquisitions, developments,
dispositions or capital markets transactions. 2007 Outlook "Looking
forward to 2007, with forecasted growth in the U.S. economy and
moderate supply growth, it is setting up to be a good year for the
industry," Fisher said. "Although the company is in the midst of
its 2007 planning and budgeting process, based on preliminary
discussions with our operators, we believe that comparable RevPAR
will increase by approximately 6 percent to 8 percent." The company
will hold a web cast of its third quarter 2006 conference call
today, November 7, 2006, at 10 a.m. Eastern time. Interested
parties may go to the company's Web site and click on Conference
Calls. They also may listen to an archived web cast of the
conference call on the Web site, or may dial (800) 405-2236, pass
code 11073372, to hear a telephone replay. The archived web cast
and telephone replay will be available through December 7, 2006.
Innkeepers USA Trust owns 74 hotels with a total of 9,749 suites or
rooms in 20 states and Washington, D.C., and focuses on acquiring
or developing premium-branded upscale extended-stay and
select-service hotels, the core of the company's portfolio;
selected full-service hotels; and turn-around opportunities for
hotels that operate under or can be converted to the industry's
leading brands. For more information about Innkeepers USA Trust,
visit the company's web site at http://www.innkeepersusa.com/.
Included in this press release are certain "non-GAAP financial
measures," within the meaning of Securities and Exchange Commission
(SEC) rules and regulations, that are different from measures
calculated and presented in accordance with GAAP (generally
accepted accounting principles). These non- GAAP financial measures
are (i) funds from operations (FFO), (ii) FFO per share, (iii)
Adjusted FFO, (iv) Adjusted FFO per share, (v) net income (loss)
(computed in accordance with GAAP) before interest, taxes,
depreciation and amortization, common and preferred minority
interests and preferred dividends (EBITDA), and (vi) Adjusted
EBITDA. The following explains why we believe these measures, when
considered along with earnings per share, calculated in accordance
with GAAP, help provide investors with a more complete
understanding of our financial and operating performance. FFO As
Defined by NAREIT and Adjusted FFO The National Association of Real
Estate Investment Trusts (NAREIT) adopted the definition of FFO in
order to promote an industry standard measure of REIT financial and
operating performance. Management believes that the presentation of
FFO, FFO per share, Adjusted FFO (defined below) and Adjusted FFO
per share provide useful supplemental information to investors
regarding the company's financial condition and results of
operations, particularly in reference to the company's ability to
service debt, fund capital expenditures and pay cash dividends.
Many other real estate investment trusts use FFO as a measure of
their financial and operating performance, and therefore provides
another basis of comparison for management. FFO, as defined, adds
back historical cost depreciation. Historical cost depreciation
assumes the value of real estate assets diminishes predictably over
a certain period of time. In fact, real estate asset values
historically have increased or decreased with market conditions.
Consequently, FFO and Adjusted FFO may be useful supplemental
measures in evaluating financial and operating performance by
disregarding, or adding back, historical cost depreciation in the
calculation of FFO and Adjusted FFO. Additionally, FFO per share
and Adjusted FFO per share targets have historically been used to
determine a significant portion of the incentive compensation of
the company's senior management. NAREIT defines FFO as net income
(loss) (computed in accordance with GAAP), excluding gains (losses)
from sales of property, plus real estate depreciation and
amortization and after adjustments for unconsolidated partnerships
and joint ventures. The company calculates FFO in compliance with
the NAREIT definition. The company defines Adjusted FFO as FFO (as
defined by NAREIT), adjusted for non-recurring and/or non-cash
items, including discontinued operations and impairment losses.
FFO, Adjusted FFO, FFO per share, Adjusted FFO per share are
reconciled to net income (loss) applicable to common shareholders
determined in accordance with GAAP in the accompanying schedules.
EBITDA and Adjusted EBITDA EBITDA is defined as net income (loss)
(computed in accordance with GAAP) before interest, taxes,
depreciation and amortization, common and preferred minority
interests and preferred dividends. The company defines Adjusted
EBITDA as EBITDA adjusted for non-recurring and/or non-cash items,
including gains (losses) from sales of property, discontinued
operations and impairment losses. Management believes that the
presentation of EBITDA and Adjusted EBITDA provides useful
supplemental information to investors regarding the company's
financial condition and results of operations, particularly in
reference to the company's ability to service debt, fund capital
expenditures and pay cash dividends. Many other businesses measure
their performance, in part, by their EBITDA results, which provide
another basis for comparison between companies. EBITDA and Adjusted
EBITDA are also factors in management's evaluation of the financial
and operating performance of the company, hotel level performance,
investment opportunities, dispositions and financing transactions.
EBITDA and Adjusted EBITDA are reconciled to net income (loss)
applicable to common shareholders determined in accordance with
GAAP in the accompanying schedules. FFO, FFO per share, Adjusted
FFO, Adjusted FFO per share, EBITDA and Adjusted EBITDA, as
presented, may not be comparable to FFO, FFO per share, Adjusted
FFO, Adjusted FFO per share, EBITDA and Adjusted EBITDA as
calculated by other real estate companies. These measures do not
reflect certain expenses that the company incurred and will incur,
such as depreciation and interest (although we show such expenses
in the reconciliation of these measures to their most directly
comparable GAAP measures). None of these measures should be
considered as an alternative to net income, net cash provided by
operating activities, or any other financial and operating
performance measure prescribed by GAAP. These measures should only
be used in conjunction with GAAP measures. Forward-Looking
Statement Safe Harbor This press release, and other publicly
available information on the Company, includes forward-looking
statements within the meaning of federal securities law. These
statements include terms such as "should," "may," "believe" and
"estimate," or assumptions, estimates or forecasts about future
hotel and Company performance and results, and the Company's future
need for capital. Such statements should not be relied on because
they involve risks that could cause actual results to differ
materially from the Company's expectations when such statements are
made. Some of these risks are set forth in reports filed from time
to time with the SEC and include, without limitation, (i) the
operational risks of the hotel business (including decreasing hotel
revenues and increasing hotel expenses), (ii) risks that war,
terrorism or similar activities, widespread health alerts,
disruption in oil imports or higher oil prices, or changes in
domestic or international political environments negatively affect
the travel industry and the company, (iii) risk of declines in the
performance and prospects of businesses and industries (e.g.,
technology, automotive, aerospace, pharmaceuticals) that are
important hotel demand generators in the company's key markets
(e.g. the Silicon Valley, CA, Northern NJ, Washington, DC, etc.),
(iv) risk that poor, declining and/or uncertain international,
national, regional and/or local economic conditions will, among
other things, negatively affect demand for the company's hotel
rooms and the availability and terms of financing, (v) risk that
the company's ability to maintain its properties in competitive
condition becomes prohibitively expensive, (vi) risk that pricing
in the hotel acquisition market becomes prohibitively expensive or
non-financeable and that potential acquisitions or developments do
not perform in accordance with expectations, (vii) risk that the
Company may invest in hotels of a size or nature (e.g., upscale
full service or resort) different than those it has focused on
historically (e.g., upscale extended-stay, and mid-scale limited
service); (viii) risks that the company may be uninsured or
underinsured against property, casualty or other risks that may
negatively affect its properties, or business, including but not
limited to earthquakes or hurricanes; (ix) risks related to an
increasing focus on development, including permitting risks,
increasing the proportion of Company assets not producing revenue
at a given time and risks that projects cost more, take longer to
complete or do not perform as anticipated; (x) changes in travel
patterns or the prevailing means of commerce (i.e., e-commerce) may
reduce demand for hotels in general or the Company's hotels in
particular, (xi) the complex tax rules that the company must
satisfy to qualify as a REIT and the potentially severe
consequences of failing to satisfy such requirements, and (xii)
governmental regulation that may increase the company's cost of
doing business or otherwise negatively effect its business or its
attractiveness as an investment and create risk of liability for
non-compliance (e.g., changes in laws affecting wages, taxes or
dividends, compliance with building codes, compliance with the
Americans with Disabilities Act, workers compensation law changes,
the Sarbanes-Oxley law, etc.). The Company undertakes no obligation
to update any forward-looking statement to reflect actual results,
changes in the Company's expectation, or for any other reason.
Contact: Dennis Craven (Company) Jerry Daly or Carol McCune Chief
Financial Officer Daly Gray (Media) (561) 227-1302 (703) 435-6293
INNKEEPERS USA TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except share and per share data) Three Months Ended Nine
Months Ended September 30, September 30, 2006 2005 2006 2005
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Revenue: Hotel operating Rooms $68,469 $62,819 $197,375 $176,192
Food and beverage 2,344 1,984 7,017 3,900 Telephone 345 507 1,065
1,366 Other 1,752 1,643 4,975 4,410 Corporate Other 141 142 411 396
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Total revenue 73,051 67,095 210,843 186,264
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Expenses: Hotel operating Rooms 13,509 12,890 39,612 36,668 Food
and beverage 1,874 1,611 5,383 2,950 Telephone 728 739 2,267 2,144
Other 817 732 2,285 1,980 General and administrative 6,944 5,740
20,370 17,432 Franchise and marketing fees 4,921 4,313 13,683
12,263 Amortization of deferred franchise conversion 292 292 877
948 Advertising and promotions 2,210 2,239 6,861 5,952 Utilities
3,662 3,001 10,036 8,572 Repairs and maintenance 3,563 3,368 9,681
9,232 Management fees 2,186 2,007 6,330 5,569 Amortization of
deferred lease acquisition 131 130 392 392 Insurance 464 356 1,302
1,136 Corporate Depreciation 9,425 8,957 28,002 26,226 Amortization
of franchise fees 20 16 66 51 Ground rent 141 132 419 391 Interest
5,214 4,687 15,431 13,836 Amortization of loan origination fees 218
216 649 651 Property taxes and insurance 3,444 2,561 9,629 8,566 G
& A 2,688 2,198 8,325 6,344 Other charges (income) -- -- -446
3,053
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Total expenses 62,451 56,185 181,148 164,356
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Income before minority interest 10,600 10,910 29,695 21,908
Minority interest, common -98 -119 -248 -195 Minority interest,
preferred -502 -1,068 -2,049 -3,205
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Income from continuing operations 10,000 9,723 27,398 18,508 Income
(loss) from discontinued operations -- 3 -- -124 Gain on sale of
assets from discontinued operations -- 11 76 1,501
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Net income 10,000 9,737 27,474 19,885 Preferred share dividends
-2,900 -2,900 -8,700 -8,700
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Net income applicable to common shareholders $7,100 $6,837 $18,774
$11,185
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Earnings per share data: Basic - continuing operations $0.16 $0.16
$0.43 $0.24
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Basic $0.16 $0.16 $0.43 $0.27
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Basic - weighted average shares 45,055,286 42,730,549 43,890,717
41,726,975
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Diluted - continuing operations $0.16 $0.16 $0.42 $0.23
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Diluted $0.16 $0.16 $0.42 $0.27
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Diluted - weighted average shares 46,007,813 43,051,919 44,852,577
41,964,476
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Per share dividends to common shareholders $0.20 $0.15 $0.50 $0.31
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INNKEEPERS USA TRUST CALCULATION OF FFO, EBITDA AND RECONCILIATION
TO NET INCOME APPLICABLE TO COMMON SHAREHOLDERS (UNAUDITED) (in
thousands, except share and per share data) Three Months Ended Nine
Months Ended September 30, September 30, 2006 2005 2006 2005
---------------------- ---------------------- CALCULATION OF FFO
Net income (loss) applicable to common shareholders $7,100 $6,837
$18,774 $11,185 Depreciation 9,425 8,957 28,002 26,226 Gain on sale
of hotels included in discontinued operations -- (11) (76) (1,501)
Minority interest, preferred 502 1,068 2,049 3,205 Minority
interest, common 98 119 248 195 ----------------------
---------------------- Diluted FFO $17,125 $16,970 $48,997 $39,310
---------------------- ---------------------- Weighted average
number of common shares and common share equivalents 47,833,357
47,629,045 47,755,942 46,640,482 ----------------------
---------------------- FFO per share $0.36 $0.36 $1.03 $0.84
---------------------- ---------------------- FFO 17,125 16,970
48,997 39,310 Other charges -- -- (446) 3,053 Discontinued
operations -- (3) -- 124 ----------------------
---------------------- Adjusted FFO $17,125 $16,967 $48,551 $42,487
---------------------- ---------------------- Adjusted FFO per
share $0.36 $0.36 $1.02 $0.91 ----------------------
---------------------- Three Months Ended Nine Months Ended
September 30, September 30, 2006 2005 2006 2005
---------------------- ---------------------- CALCULATION OF EBITDA
Net income applicable to common shareholders $7,100 $6,837 $18,774
$11,185 Interest 5,214 4,687 15,431 13,836 Depreciation and
amortization 10,552 9,793 31,553 28,705 Minority interest, common
98 119 248 195 Minority interest, preferred 502 1,068 2,049 3,205
Preferred share dividends 2,900 2,900 8,700 8,700
---------------------- ---------------------- EBITDA $26,366
$25,404 $76,755 $65,826 ----------------------
---------------------- Other charges -- -- (446) 3,053 Discontinued
operations -- (3) -- 124 Gain on sale of hotels included in
discontinued operations -- (11) (76) (1,501) ----------------------
---------------------- Adjusted EBITDA $26,366 $25,390 $76,233
$67,502 ---------------------- ---------------------- INNKEEPERS
USA TRUST CONSOLIDATED BALANCE SHEETS (in thousands, except share
and per share data) September 30, December 31, 2006 2005
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ASSETS Investment in hotels: Land and improvements $150,254
$150,375 Buildings and improvements 757,545 754,131 Furniture and
equipment 111,259 106,944 Renovations in process 21,529 4,534
Hotels under development 10,221 4,413
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1,050,808 1,020,397 Accumulated depreciation -258,081 -230,139
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Net investment in hotels 792,727 790,258 Cash and cash equivalents
10,276 11,897 Restricted cash and cash equivalents 6,970 6,675
Accounts receivable, net 5,168 6,124 Receivable from manager 455 --
Prepaid and other 2,416 2,478 Deferred and other 32,779 19,546
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Total assets $850,791 $836,978
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LIABILITIES AND SHAREHOLDERS' EQUITY Debt $278,647 $269,426
Accounts payable and accrued expenses 19,999 15,956 Payable to
manager -- 236 Franchise conversion fee obligations 10,287 10,714
Distributions payable 11,711 9,645
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Total liabilities 320,644 305,977 Minority interest in Partnership
5,663 47,982 Shareholders' equity: Preferred shares, $0.01 par
value, 20,000,000 shares authorized, 5,800,000 shares issued and
outstanding 145,000 145,000 Common shares, $0.01 par value,
100,000,000 shares authorized, 45,196,011 and 42,939,086 issued and
outstanding, respectively 452 429 Additional paid-in capital
505,562 460,873 Unearned compensation -- -1,939 Distributions in
excess of earnings -126,530 -121,344
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Total shareholders' equity 524,484 483,019
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $850,791 $836,978
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INNKEEPERS USA TRUST DEBT COMPOSITION As of September 30, 2006
(outstanding balance in thousands) Stated Outstanding Interest
Maturity Encumbered DEBT Balance Rate Date Properties
-------------------------------------------------------------------------
Unsecured Line of Credit(1) $2,574 6.73% September 2008 --
--------------------------------------------- Industrial Revenue
Bonds(1) 10,000 3.70% December 2014 --
--------------------------------------------- Term Loan #1 22,273
8.17% October 2007 8 ---------------------------------------------
Term Loan #2 33,855 8.15% March 2009 8
--------------------------------------------- Term Loan #3 27,635
7.02% April 2010 7 ---------------------------------------------
Term Loan #4 44,694 7.16% October 2009 6
--------------------------------------------- Term Loan #5 48,925
7.75% January 2011 6 ---------------------------------------------
Mortgage Loans 12,413 10.35% June 2010 1
--------------------------------------------- Mortgage Loans 75,000
6.03% September 2016 3
--------------------------------------------- Adjustments (4) 1,278
-- -- -- --------------------------------------------- TOTAL
$278,647 7.33%(2) 5.2 years(3) 39
--------------------------------------------- (1) Variable rated
debt. The stated interest rate of the industrial revenue bonds
includes an annual letter of credit fee of 1.25% (2) Weighted
average calculated using the stated interest rate (3) Weighted
average maturity (4) Adjustment to record $13 million mortgage at a
fair market interest rate of 7% (the stated interest rate is
10.35%) INNKEEPERS USA TRUST OTHER DATA (in thousands, except
shares data) September 30, September 30, 2006 2005
---------------------------- CAPITALIZATION
---------------------------- Common share market capitalization
$747,000 $673,000 ---------------------------- Total market
capitalization $940,000 $1,072,000 ----------------------------
Common share closing price $16.29 $15.45
---------------------------- Common share dividend(1) $0.80 $0.60
---------------------------- Common share dividend yield(1) 4.9%
3.8% ---------------------------- Preferred share closing price
$25.32 $26.15 ---------------------------- Preferred share
dividend(2) $2.00 $2.00 ---------------------------- Preferred
share dividend yield(2) 7.9% 7.6% ---------------------------- DEBT
COVERAGE Debt weighted average interest rate 7.2% 7.1%
---------------------------- Debt to investment in hotel
properties, at cost 27% 25% ---------------------------- Debt and
preferred shares to investment in hotel properties 40% 39%
---------------------------- Debt to market capitalization 30% 23%
---------------------------- Debt and preferred shares to market
capitalization 45% 37% ----------------------------
LIQUIDITY/FLEXIBILITY Debt due 2005 -- $1,865
---------------------------- Debt due 2006 $1,483 $6,399
---------------------------- Debt due 2007 $29,449 $68,140
---------------------------- Debt due 2008 $5,267 $6,006
---------------------------- Debt due 2009 and thereafter $242,448
$164,889 ---------------------------- Unencumbered hotel assets(3)
44% 48% ---------------------------- Unsecured Line of Credit
outstanding balance $2,574 $40,574 ----------------------------
Unsecured Line of Credit available balance(4) $190,926 $82,839
---------------------------- SHARES AND UNITS OUTSTANDING Common
Shares 45,196,011 42,914,086 ---------------------------- Common
Partnership Units 666,891 666,891 ----------------------------
Preferred Partnership Units 1,825,544 3,884,469
---------------------------- Preferred Shares 5,800,000 5,800,000
---------------------------- (1) Annualized based on the quarterly
dividend paid for the three months ended September 30, 2006 and
2005. (2) Regular annual preferred share dividends. (3) Based upon
the number of hotels. (4) The actual amount that may be borrowed is
contingent upon many factors, such as compliance with unsecured
line of credit covenants and the use of proceeds from borrowings.
The $205 million revolving unsecured line of credit available
balance has been reduced by $11.5 million in letters of credit at
September 30, 2006. INNKEEPERS USA TRUST HOTEL OPERATING RESULTS
(UNAUDITED) Three Months Ended September 30, % 2006 2005 Inc (dec)
----------------------------------- PORTFOLIO(1)
------------------------------ Average Daily Rate $114.80 $106.13
8.17% ------------------------- Occupancy 76.97% 78.36% -1.77%
------------------------- RevPAR $88.36 $83.16 6.25%
------------------------- Number of hotel properties 65 ------
Percent of total rooms 100.0% ------ Percent of room revenue(2)
100.0% ------ BY SEGMENT ------------------------------ Upscale
Extended Stay Average Daily Rate $115.51 $105.87 9.11%
------------------------- Occupancy 80.07% 82.42% -2.85%
------------------------- RevPAR $92.49 $87.25 5.99%
------------------------- Number of hotel properties 49 ------
Percent of total rooms 74.7% ------ Percent of room revenue(2)
77.7% ------ Upscale(1) Average Daily Rate $147.18 $132.45 11.12%
------------------------- Occupancy 66.96% 66.95% 0.02%
------------------------- RevPAR $98.56 $88.67 11.15%
------------------------- Number of hotel properties 3 ------
Percent of total rooms 5.8% ------ Percent of room revenue(2) 6.7%
------ Mid Priced(1) Average Daily Rate $98.01 $95.94 2.15%
------------------------- Occupancy 69.53% 67.87% 2.44%
------------------------- RevPAR $68.14 $65.11 4.65%
------------------------- Number of hotel properties 13 ------
Percent of total rooms 19.6% ------ Percent of room revenue(2)
15.5% ------ BY FRANCHISE AFFILIATION
------------------------------ Residence Inn Average Daily Rate
$116.31 $106.13 9.59% ------------------------- Occupancy 79.89%
82.05% -2.63% ------------------------- RevPAR $92.92 $87.07 6.71%
------------------------- Number of hotel properties 42 ------
Percent of total rooms 63.5% ------ Percent of room revenue(2)
66.2% ------ Summerfield Suites Average Daily Rate $106.34 $101.12
5.16% ------------------------- Occupancy 81.77% 85.77% -4.67%
------------------------- RevPAR $86.96 $86.73 0.26%
------------------------- Number of hotel properties 6 ------
Percent of total rooms 9.4% ------ Percent of room revenue(2) 9.2%
------ Hampton Inn(1) Average Daily Rate $101.26 $98.19 3.13%
------------------------- Occupancy 70.43% 67.63% 4.13%
------------------------- RevPAR $71.31 $66.41 7.39%
------------------------- Number of hotel properties 11 ------
Percent of total rooms 16.7% ------ Percent of room revenue(2)
13.4% ------ BY MANAGEMENT COMPANY ------------------------------
Innkeepers Hospitality Management(1)(3)(4) Average Daily Rate
$114.03 $105.78 7.80% ------------------------- Occupancy 77.34%
78.68% -1.70% ------------------------- RevPAR $88.19 $83.23 5.96%
------------------------- Number of hotel properties 64 ------
Percent of total rooms 97.3% ------ Percent of room revenue(2)
97.1% ------ Third Party Managed Average Daily Rate $149.26 $121.03
23.32% ------------------------- Occupancy 63.43% 66.66% -4.85%
------------------------- RevPAR $94.67 $80.68 17.34%
------------------------- Number of hotel properties 1 ------
Percent of total rooms 2.7% ------ Percent of room revenue(2) 2.9%
------ BY GEOGRAPHIC REGION ------------------------------ New
England [ME, NH, VT, MA, CT, RI] Average Daily Rate $117.30 $112.92
3.88% ------------------------- Occupancy 78.71% 76.59% 2.76%
------------------------- RevPAR $92.32 $86.48 6.75%
------------------------- Number of hotel properties 4 ------
Percent of total rooms 4.6% ------ Percent of room revenue(2) 4.4%
------ Middle Atlantic(1) [NY, NJ, PA] Average Daily Rate $121.10
$119.21 1.58% ------------------------- Occupancy 79.13% 75.35%
5.02% ------------------------- RevPAR $95.82 $89.82 6.68%
------------------------- Number of hotel properties 10 ------
Percent of total rooms 14.2% ------ Percent of room revenue(2)
13.9% ------ South Atlantic(1) [DE, MD, WV, DC, VA, NC, SC, GA, FL]
Average Daily Rate $114.45 $107.05 6.91% -------------------------
Occupancy 69.31% 72.92% -4.96% ------------------------- RevPAR
$79.32 $78.07 1.61% ------------------------- Number of hotel
properties 15 ------ Percent of total rooms 23.9% ------ Percent of
room revenue(2) 24.1% ------ East North Central [OH, MI, IN, IL,
WI] Average Daily Rate $98.55 $92.98 5.98%
------------------------- Occupancy 76.69% 76.77% -0.10%
------------------------- RevPAR $75.58 $71.38 5.88%
------------------------- Number of hotel properties 12 ------
Percent of total rooms 16.7% ------ Percent of room revenue(2)
13.9% ------ East South Central(1) [KY, TN, AL, MS] Average Daily
Rate $94.90 $91.76 3.43% ------------------------- Occupancy 82.80%
85.80% -3.50% ------------------------- RevPAR $78.58 $78.73 -0.19%
------------------------- Number of hotel properties 2 ------
Percent of total rooms 2.2% ------ Percent of room revenue(2) 1.9%
------ West North Central [MN, IA, MO, KS, NE, SD, ND] Average
Daily Rate $84.83 $82.58 2.72% ------------------------- Occupancy
92.29% 88.47% 4.32% ------------------------- RevPAR $78.29 $73.06
7.16% ------------------------- Number of hotel properties 1 ------
Percent of total rooms 0.8% ------ Percent of room revenue(2) 0.7%
------ West South Central [AR, LA, OK, TX] Average Daily Rate
$113.61 $91.78 23.79% ------------------------- Occupancy 71.96%
84.07% -14.40% ------------------------- RevPAR $81.76 $77.15 5.97%
------------------------- Number of hotel properties 5 ------
Percent of total rooms 8.7% ------ Percent of room revenue(2) 8.4%
------ Mountain [MT, ID, WY, CO, UT, NM, AZ, NV] Average Daily Rate
$109.52 $97.50 12.33% ------------------------- Occupancy 79.14%
83.56% -5.28% ------------------------- RevPAR $86.68 $81.47 6.40%
------------------------- Number of hotel properties 2 ------
Percent of total rooms 3.6% ------ Percent of room revenue(2) 3.3%
------ Pacific [WA, OR, CA, AK, HI] Average Daily Rate $124.33
$112.52 10.49% ------------------------- Occupancy 83.02% 83.21%
-0.23% ------------------------- RevPAR $103.21 $93.62 10.24%
------------------------- Number of hotel properties 14 ------
Percent of total rooms 25.4% ------ Percent of room revenue(2)
29.4% ------ BY SELECTED MSA ------------------------------ Atlanta
Average Daily Rate $105.38 $96.82 8.84% -------------------------
Occupancy 75.86% 76.86% -1.30% ------------------------- RevPAR
$79.94 $74.41 7.43% ------------------------- Number of hotel
properties 2 ------ Percent of total rooms 3.5% ------ Percent of
room revenue(2) 3.4% ------ Boston Average Daily Rate $105.07
$94.22 11.51% ------------------------- Occupancy 68.77% 68.40%
0.55% ------------------------- RevPAR $72.26 $64.45 12.12%
------------------------- Number of hotel properties 1 ------
Percent of total rooms 1.3% ------ Percent of room revenue(2) 0.9%
------ Chicago Average Daily Rate $103.42 $93.41 10.72%
------------------------- Occupancy 78.01% 74.71% 4.43%
------------------------- RevPAR $80.68 $69.78 15.62%
------------------------- Number of hotel properties 4 ------
Percent of total rooms 7.1% ------ Percent of room revenue(2) 6.1%
------ Dallas/Ft. Worth Average Daily Rate $106.89 $84.12 27.07%
------------------------- Occupancy 70.44% 85.66% -17.77%
------------------------- RevPAR $75.29 $72.06 4.49%
------------------------- Number of hotel properties 4 ------
Percent of total rooms 6.8% ------ Percent of room revenue(2) 6.0%
------ Denver Average Daily Rate $109.52 $97.50 12.33%
------------------------- Occupancy 79.14% 83.56% -5.28%
------------------------- RevPAR $86.68 $81.47 6.40%
------------------------- Number of hotel properties 2 ------
Percent of total rooms 3.6% ------ Percent of room revenue(2) 3.3%
------ Detroit Average Daily Rate $97.67 $95.59 2.17%
------------------------- Occupancy 71.53% 80.92% -11.60%
------------------------- RevPAR $69.86 $77.35 -9.68%
------------------------- Number of hotel properties 3 ------
Percent of total rooms 4.5% ------ Percent of room revenue(2) 3.7%
------ Hartford Average Daily Rate $117.17 $114.28 2.53%
------------------------- Occupancy 80.31% 78.14% 2.77%
------------------------- RevPAR $94.10 $89.30 5.37%
------------------------- Number of hotel properties 2 ------
Percent of total rooms 2.4% ------ Percent of room revenue(2) 2.5%
------ Philadelphia Average Daily Rate $103.12 $104.00 -0.84%
------------------------- Occupancy 81.74% 78.64% 3.93%
------------------------- RevPAR $84.29 $81.79 3.06%
------------------------- Number of hotel properties 4 ------
Percent of total rooms 5.8% ------ Percent of room revenue(2) 5.5%
------ Richmond Average Daily Rate $104.88 $97.72 7.33%
------------------------- Occupancy 84.58% 80.67% 4.86%
------------------------- RevPAR $88.71 $78.83 12.54%
------------------------- Number of hotel properties 2 ------
Percent of total rooms 2.3% ------ Percent of room revenue(2) 2.3%
------ San Francisco/San Jose/Oakland (Silicon valley) Average
Daily Rate $120.68 $110.17 9.54% -------------------------
Occupancy 84.27% 80.47% 4.72% ------------------------- RevPAR
$101.70 $88.66 14.71% ------------------------- Number of hotel
properties 8 ------ Percent of total rooms 15.0% ------ Percent of
room revenue(2) 17.4% ------ Seattle/Portland Average Daily Rate
$133.61 $115.92 15.26% ------------------------- Occupancy 84.30%
87.31% -3.45% ------------------------- RevPAR $112.63 $101.21
11.28% ------------------------- Number of hotel properties 4
------ Percent of total rooms 6.3% ------ Percent of room
revenue(2) 7.5% ------ Washington, D.C.(1) Average Daily Rate
$139.11 $134.42 3.49% ------------------------- Occupancy 72.05%
73.24% -1.62% ------------------------- RevPAR $100.23 $98.45 1.81%
------------------------- Number of hotel properties 4 ------
Percent of total rooms 6.7% ------ Percent of room revenue(2) 8.3%
------ Nine Months Ended September 30, % 2006 2005 Inc (dec)
------------------------------- PORTFOLIO(1)
------------------------------ Average Daily Rate $111.84 $103.95
7.59% ------------------------------- Occupancy 76.31% 76.67%
-0.47% ------------------------------- RevPAR $85.34 $79.69 7.09%
------------------------------- BY SEGMENT
------------------------------ Upscale Extended Stay Average Daily
Rate $112.36 $103.82 8.23% -------------------------------
Occupancy 79.05% 79.67% -0.78% -------------------------------
RevPAR $88.82 $82.72 7.38% -------------------------------
Upscale(1) Average Daily Rate $138.20 $126.70 9.08%
------------------------------- Occupancy 72.42% 69.88% 3.64%
------------------------------- RevPAR $100.09 $88.54 13.05%
------------------------------- Mid Priced(1) Average Daily Rate
$101.10 $97.56 3.63% ------------------------------- Occupancy
66.97% 67.17% -0.31% ------------------------------- RevPAR $67.70
$65.53 3.31% ------------------------------- BY FRANCHISE
AFFILIATION ------------------------------ Residence Inn Average
Daily Rate $112.75 $103.96 8.45% -------------------------------
Occupancy 78.88% 79.09% -0.26% -------------------------------
RevPAR $88.94 $82.22 8.17% -------------------------------
Summerfield Suites Average Daily Rate $104.70 $98.26 6.56%
------------------------------- Occupancy 79.85% 83.37% -4.22%
------------------------------- RevPAR $83.60 $81.91 2.06%
------------------------------- Hampton Inn(1) Average Daily Rate
$102.87 $97.79 5.20% ------------------------------- Occupancy
66.60% 66.01% 0.91% ------------------------------- RevPAR $68.52
$64.54 6.15% ------------------------------- BY MANAGEMENT COMPANY
------------------------------ Innkeepers Hospitality
Management(1)(3)(4) Average Daily Rate $111.25 $103.61 7.37%
------------------------------- Occupancy 76.57% 77.09% -0.67%
------------------------------- RevPAR $85.18 $79.87 6.65%
------------------------------- Third Party Managed Average Daily
Rate $136.00 $118.90 14.38% -------------------------------
Occupancy 67.03% 61.65% 8.72% -------------------------------
RevPAR $91.16 $73.30 24.36% ------------------------------- BY
GEOGRAPHIC REGION ------------------------------ New England [ME,
NH, VT, MA, CT, RI] Average Daily Rate $111.28 $106.47 4.52%
------------------------------- Occupancy 72.12% 72.16% -0.05%
------------------------------- RevPAR $80.26 $76.83 4.46%
------------------------------- Middle Atlantic(1) [NY, NJ, PA]
Average Daily Rate $111.66 $108.95 2.49%
------------------------------- Occupancy 74.89% 76.15% -1.65%
------------------------------- RevPAR $83.63 $82.97 0.80%
------------------------------- South Atlantic(1) [DE, MD, WV, DC,
VA, NC, SC, GA, FL] Average Daily Rate $119.34 $109.74 8.75%
------------------------------- Occupancy 72.31% 74.57% -3.02%
------------------------------- RevPAR $86.30 $81.83 5.46%
------------------------------- East North Central [OH, MI, IN, IL,
WI] Average Daily Rate $96.55 $92.12 4.81%
------------------------------- Occupancy 73.69% 72.77% 1.26%
------------------------------- RevPAR $71.15 $67.04 6.13%
------------------------------- East South Central(1) [KY, TN, AL,
MS] Average Daily Rate $93.14 $87.85 6.03%
------------------------------- Occupancy 79.16% 83.01% -4.63%
------------------------------- RevPAR $73.74 $72.92 1.12%
------------------------------- West North Central [MN, IA, MO, KS,
NE, SD, ND] Average Daily Rate $84.01 $81.85 2.63%
------------------------------- Occupancy 89.57% 86.15% 3.96%
------------------------------- RevPAR $75.24 $70.52 6.70%
------------------------------- West South Central [AR, LA, OK, TX]
Average Daily Rate $106.16 $92.63 14.61%
------------------------------- Occupancy 77.68% 83.23% -6.67%
------------------------------- RevPAR $82.47 $77.10 6.96%
------------------------------- Mountain [MT, ID, WY, CO, UT, NM,
AZ, NV] Average Daily Rate $100.17 $93.72 6.88%
------------------------------- Occupancy 77.86% 76.82% 1.36%
------------------------------- RevPAR $78.00 $72.00 8.33%
------------------------------- Pacific [WA, OR, CA, AK, HI]
Average Daily Rate $120.75 $110.54 9.24%
------------------------------- Occupancy 81.98% 79.18% 3.52%
------------------------------- RevPAR $98.98 $87.53 13.09%
------------------------------- BY SELECTED MSA
------------------------------ Atlanta Average Daily Rate $108.03
$97.30 11.03% ------------------------------- Occupancy 76.36%
74.61% 2.35% ------------------------------- RevPAR $82.49 $72.60
13.63% ------------------------------- Boston Average Daily Rate
$102.81 $94.48 8.82% ------------------------------- Occupancy
60.63% 58.62% 3.44% ------------------------------- RevPAR $62.34
$55.38 12.57% ------------------------------- Chicago Average Daily
Rate $100.44 $93.43 7.50% ------------------------------- Occupancy
73.13% 70.06% 4.39% ------------------------------- RevPAR $73.45
$65.46 12.22% ------------------------------- Dallas/Ft. Worth
Average Daily Rate $97.21 $83.38 16.59%
------------------------------- Occupancy 76.82% 83.82% -8.36%
------------------------------- RevPAR $74.67 $69.89 6.84%
------------------------------- Denver Average Daily Rate $100.17
$93.72 6.88% ------------------------------- Occupancy 77.86%
76.82% 1.36% ------------------------------- RevPAR $78.00 $72.00
8.33% ------------------------------- Detroit Average Daily Rate
$98.73 $94.66 4.30% ------------------------------- Occupancy
70.43% 75.22% -6.37% ------------------------------- RevPAR $69.53
$71.20 -2.35% ------------------------------- Hartford Average
Daily Rate $114.84 $112.64 1.96% -------------------------------
Occupancy 75.63% 74.11% 2.04% -------------------------------
RevPAR $86.85 $83.48 4.04% -------------------------------
Philadelphia Average Daily Rate $103.78 $101.54 2.21%
------------------------------- Occupancy 78.45% 79.44% -1.25%
------------------------------- RevPAR $81.41 $80.67 0.93%
------------------------------- Richmond Average Daily Rate $104.66
$95.57 9.51% ------------------------------- Occupancy 80.39%
82.66% -2.75% ------------------------------- RevPAR $84.13 $79.00
6.50% ------------------------------- San Francisco/San
Jose/Oakland (Silicon valley) Average Daily Rate $120.33 $110.19
9.20% ------------------------------- Occupancy 82.47% 74.82%
10.23% ------------------------------- RevPAR $99.24 $82.44 20.37%
------------------------------- Seattle/Portland Average Daily Rate
$123.21 $109.09 12.95% ------------------------------- Occupancy
82.38% 85.12% -3.22% ------------------------------- RevPAR $101.50
$92.85 9.31% ------------------------------- Washington, D.C.(1)
Average Daily Rate $144.92 $133.48 8.57%
------------------------------- Occupancy 72.70% 73.31% -0.83%
------------------------------- RevPAR $105.36 $97.85 7.67%
------------------------------- (1) Comparable hotels for the
quarter exclude two hotels which are being converted to Courtyard
by Marriott, a Hampton Inn which reopened in August 2005 and the
Bullfinch hotel acquired in November 2005. Year to date statistics
also exclude the Westin which was acquired in May 2005. (2) Room
revenue for January 1, 2006 to September 30, 2006. DATASOURCE:
Innkeepers USA Trust CONTACT: Dennis Craven, Chief Financial
Officer of Innkeepers USA Trust, +1-561-227-1302; or Media: Jerry
Daly or Carol McCune of Daly Gray, +1-703-435-6293, for Innkeepers
USA Trust Web site: http://www.innkeepersusa.com/
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