PALM BEACH, Fla., May 9 /PRNewswire-FirstCall/ -- Innkeepers USA
Trust (NYSE:KPA), a hotel real estate investment trust (REIT) and a
leading owner of upscale extended-stay hotel properties throughout
the United States, today announced results for the three months
ended March 31, 2006.
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% Q1 2006 Q1 2005 Change*
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Total revenue $64,602 $55,099 17 %
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Net income (loss) applicable to common shareholders $3,200 $(828)
486 %
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Diluted income (loss) per share $0.07 $(0.02) 450 %
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Funds from operations (FFO) $13,442 $6,164 118 %
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Adjusted FFO $12,947 $8,916 45 %
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FFO per share $0.28 $0.15 87 %
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Adjusted FFO per share $0.27 $0.22 23 %
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Earnings before interest, taxes, depreciation and amortization
(EBITDA) $22,483 $17,348 30 %
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Adjusted EBITDA $21,913 $18,610 18 %
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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)
for 65 of the company's hotel properties (excluding three hotels
closed for conversion and two hotels acquired in 2005) rose 7.9
percent to $80.09 for the first quarter 2006, compared to the same
period in 2005. Average daily rate (ADR) improved 6.8 percent to
$109.59, and occupancy was up 1.1 percent to 73.1 percent. The 2006
first quarter RevPAR improvement reflects a 26.5 percent increase
in RevPAR at the company's eight Silicon Valley, Calif. hotel
properties, driven by a 16.9 percent rise in occupancy to 78.5
percent and a 8.2 percent advance in ADR. Excluding Silicon Valley,
RevPAR for the company's comparable hotels increased 4.6 percent
due to three of the company's 13 Hampton Inns, which were
negatively impacted in the quarter. "Two properties were undergoing
significant renovations, and a third exterior-corridor property was
in the process of transitioning to another brand at the end of its
Hampton Inn franchise agreement," said Jeffrey H. Fisher, chief
executive officer and president. "Excluding these three hotels, our
Hampton Inn properties performed in line with the brand for the
quarter, reporting 11.3 percent RevPAR growth versus 11.5 percent
for the brand. Our 42 Residence Inn properties reported RevPAR
growth of 9.9 percent, compared to 10.0 percent for the brand
systemwide. As these figures indicate, the company's two flagship
brands, Residence Inn and Hampton Inn, performed well during the
first quarter." Gross operating profit margins for the company's 65
comparable hotels increased 80 basis points to 44.3 percent,
compared to the 2005 first quarter. Margins were impacted
approximately 60 basis points due to substantial renovations at two
properties and a large deductible in conjunction with a worker's
compensation claim. These three items reduced Adjusted FFO by
$0.01. "We enjoyed a strong first quarter, as our hotels reported
very positive operating results and our earnings came in at the
upper end of our Adjusted FFO and EBITDA guidance," Fisher added.
"We continued to benefit from solid uptrends in the industry and
the economy, and the strong demand patterns among both leisure and
business travelers. With new supply growth still at historically
low rates, we agree with industry experts who predict that there
remains significant upside potential to be realized."
"Operationally, we reported strong 7.9 percent RevPAR growth, which
was at the upper end of our 6 percent to 8 percent guidance. We
continued to experience very solid bounce-back at our Silicon
Valley properties, with RevPAR gains in excess of 26 percent. Other
markets that performed well include Denver, up 16 percent; Atlanta,
up 14 percent; and Chicago, Dallas and Washington D.C., up 11
percent each. Overall, our operators have been very focused on
rate, which increased nearly 7 percent and was the primary driver
of our RevPAR growth. Occupancy also continues to grow, and we see
room for further gains as the year progresses."
Acquisitions/Development/Renovations Update In terms of the
company's external growth strategy, two hotels acquired in 2005
that currently are closed for renovation and repositioning, have
experienced delays versus the original projections. Permitting
delays for the properties in Atlantic City and Montvale, N.J.
presented scheduling challenges, and those properties now are
expected to open in the first quarter of 2007. Construction is
expected to start this month, and estimated total contruction costs
for these two properties is approximately $28 million, up from
previous guidance of $21 million. In California, the company broke
ground in March on a 150-suite Embassy Suites hotel in Valencia, in
the Santa Clarita Valley north of L.A., and projects an early 2007
opening. The company expects to spend approximately $17 million in
2006 on this development. These properties represent a substantial
source of embedded growth in 2007, with their locations in strong
markets with high barriers to new competition. Fisher said that
along with internal growth, the company is very focused on external
growth through acquisitions and developments. "We continue to
target premium brands in the upscale extended-stay sectors,
select-service and full-service hotels that have the potential to
be rebranded and repositioned, and opportunistic acquisitions, with
all targets located in major urban markets with multiple demand
generators and high barriers to new competition. We also will
selectively consider development opportunities where it makes
economic sense or in markets where the cost of building a new hotel
is comparable to or lower than prices for existing hotels."
Regarding acquisitions made in 2005, Fisher noted that the newly
renovated 224-room Westin Governor Morris hotel in Morristown, N.J.
is exceeding the company's RevPAR projections after experiencing
some ramp-up constraints immediately following the acquisition.
"Additionally, the food and beverage operation is doing
particularly well due to an increase in the number of group events
booked throughout the week and special events on the weekend. The
80- room Bulfinch hotel in Boston, Mass., is gaining momentum in
the marketplace and has been featured on national television shows
and recognized as one of the world's best hotels by Travel and
Leisure." Capital Structure Dennis Craven, chief financial officer,
pointed out that the company continues to maintain one of the
industry's strongest capital structures and lowest-levered balance
sheets. "There were no significant changes to our balance sheet
during the quarter. Our debt to investment in hotels at cost ratio
is a low 27 percent as of March 31, 2006. Our weighted average
interest rate on our total debt is 7.2 percent, and 69 percent of
our total debt is at fixed rates. We have approximately $77 million
outstanding on our line of credit and expect to issue debt in the
second quarter, with proceeds to be used to pay down a portion of
our credit line and free up capital for our conversions,
acquisitions and development." Dividend The dividend for the first
quarter was maintained at a rate of $0.15, which represents a 150
percent increase over the $0.06 first quarter dividend last year.
The company expects to increase the dividend in the third quarter
based on its projections for continued sustainable growth. Earnings
Guidance The company reaffirmed the following range of estimates
for 2006, based on assumed RevPAR growth of 6 percent to 8 percent
for the year (forecasted financial results do not include any
assumptions for future acquisitions, developments, dispositions or
capital markets transactions): * Net income applicable to common
shareholders of $20.5 million to $24.5 million for the year; *
Diluted income per share of $0.48 to $0.57 for the year; * Adjusted
FFO per share of $1.30 to $1.38 for the year; * Adjusted EBITDA of
$98 million to $102 million for the year; * Gross operating profit
margin increase of approximately 60 basis points for 2006 (includes
effect of a 70 basis point increase in 2006 for incentive
management fees which have not historically been paid); and *
Capital expenditures of approximately $19 million remain in 2006
(excludes $45 million of capital expenditures related to the two
hotels closed for conversion and one hotel under development). 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 company
will hold a webcast of its first quarter 2006 conference call
today, May 9, 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 11058786, to
hear a telephone replay. The archived web cast and telephone replay
will be available through Tuesday, May 16, 2006. Innkeepers USA
Trust owns 70 hotels with a total of 8,816 suites or rooms in 20
states and Washington, D.C., and focuses on acquiring and/or
developing premium branded upscale extended-stay, select-service
and full-service hotels and the rebranding and repositioning of
other hotel properties. 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 provides 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 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; (ix) 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, (x) 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 (xi) 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.
INNKEEPERS USA TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except share and per share data) Three Months Ended
March 31, -------------------------- 2006 2005
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Revenue: Hotel operating Rooms $60,545 $53,031 Food and beverage
2,078 299 Telephone 361 392 Other 1,509 1,271 Corporate Other 109
106
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Total revenue 64,602 55,099
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Expenses: Hotel operating Rooms 12,648 11,200 Food and beverage
1,584 236 Telephone 747 683 Other 730 595 General and
administrative 6,400 5,690 Franchise and marketing fees 4,124 3,773
Amortization of deferred franchise conversion 292 363 Advertising
and promotions 2,250 1,688 Utilities 3,449 2,961 Repairs and
maintenance 2,761 2,424 Management fees 1,956 1,792 Amortization of
deferred lease acquisition 131 131 Insurance 414 387 Corporate
Depreciation 9,217 8,502 Amortization of franchise fees 18 17
Ground rent 138 129 Interest 5,049 4,908 Amortization of loan
origination fees 218 210 Property taxes and insurance 3,026 2,893
General and administrative 2,462 2,038 Amortization of unearned
compensation 358 97 Other charges (495) 2,698
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Total expenses 57,477 53,415
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Income before minority interest 7,125 1,684 Minority interest,
common (55) 20 Minority interest, preferred (1,045) (1,068)
------------------------------------------------------------------------
Income from continuing operations 6,025 636 Income from
discontinued operations -- (54) Gain on sale of assets from
discontinued operations 75 1490
------------------------------------------------------------------------
Net income 6,100 2,072
------------------------------------------------------------------------
Preferred share dividends (2,900) (2,900)
------------------------------------------------------------------------
Net income (loss) applicable to common shareholders $3,200 ($828)
------------------------------------------------------------------------
Earnings (loss) per share data:
------------------------------------------------------------------------
Basic - continuing operations $0.07 ($0.06)
------------------------------------------------------------------------
Basic $0.07 ($0.02)
------------------------------------------------------------------------
Basic - weighted average shares 42,876,076 39,902,804
------------------------------------------------------------------------
Diluted - continuing operations $0.07 ($0.06)
------------------------------------------------------------------------
Diluted $0.07 ($0.02)
------------------------------------------------------------------------
Diluted - weighted average shares 43,352,908 39,902,804
------------------------------------------------------------------------
INNKEEPERS USA TRUST CALCULATION OF FFO, ADJUSTED FFO, EBITDA,
ADJUSTED EBITDA AND RECONCILIATION TO NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS (in thousands, except share and per share data)
Three Months Ended March 31, 2006 2005 ---------------------------
CALCULATION OF FFO Net income (loss) applicable to common
shareholders $3,200 ($828) Depreciation 9,217 8,502 Gain on sale of
assets (75) (1,490) Minority interest, preferred 1,045 0 Minority
interest, common 55 (20) --------------------------- Diluted FFO
$13,442 $6,164 --------------------------- Weighted average number
of common shares and common share equivalents 47,821,208 41,033,267
--------------------------- FFO per diluted share $0.28 $0.15
--------------------------- FFO $13,442 $6,164 Other charges (495)
2,698 Discontinued operations -- 54 ---------------------------
Adjusted FFO $12,947 $8,916 --------------------------- Adjusted
FFO per diluted share $0.27 $0.22 --------------------------- Three
Months Ended March 31, 2006 2005 ---------------------------
CALCULATION OF EBITDA Net income applicable to common shareholders
$3,200 ($828) Interest 5,049 4,908 Depreciation and amortization
10,234 9,320 Minority interest, common 55 (20) Minority interest,
preferred 1,045 1,068 Preferred share dividends 2,900 2,900
--------------------------- EBITDA $22,483 $17,348
--------------------------- Other charges (1) (495) 2,698
Discontinued operations -- 54 Gain on sale of assets (75) (1,490)
--------------------------- Adjusted EBITDA $21,913 $18,610
--------------------------- (1) Other charges in 2006 includes $745
related to business interruption proceeds, offset by $250 in costs
associated with the Company's exploration of a possible sale of the
Company. Other charges in 2005 includes extinguishment of debt
costs related to the partial defeasance of outstanding debt of
$16,500 encumbering three hotels that were sold during the first
quarter of 2005. INNKEEPERS USA TRUST CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data) March 31, December
31, 2006 2005
------------------------------------------------------------------------
ASSETS Investment in hotels: Land and improvements $150,079
$150,375 Buildings and improvements 754,178 754,131 Furniture and
equipment 107,005 106,944 Renovations in process 12,537 4,534
Hotels under development 4,749 4,413
------------------------------------------------------------------------
1,028,548 1,020,397 Accumulated depreciation (239,297) (230,139)
------------------------------------------------------------------------
Net investment in hotels 789,251 790,258 Cash and cash equivalents
23,190 11,897 Restricted cash and cash equivalents 7,288 6,675
Accounts receivable, net 5,763 6,124 Prepaid and other 2,141 2,478
Deferred and other 19,142 19,546
------------------------------------------------------------------------
Total assets $846,775 $836,978
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY Debt $280,475 $269,426
Accounts payable and accrued expenses 17,688 15,956 Payable to
manager 510 236 Franchise conversion fee obligations 10,593 10,714
Distributions payable 9,636 9,645
------------------------------------------------------------------------
Total liabilities 318,902 305,977 Minority interest in Partnership
47,147 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, 43,027,146 and 37,966,756 issued and
outstanding, respectively 430 429 Additional paid-in capital
461,884 460,873 Unearned compensation (1,990) (1,939) Distributions
in excess of earnings (124,598) (121,344)
------------------------------------------------------------------------
Total shareholders' equity 480,726 483,019
------------------------------------------------------------------------
Total liabilities and shareholders' equity $846,775 $836,978
------------------------------------------------------------------------
INNKEEPERS USA TRUST DEBT COMPOSITION As of March 31, 2006
(outstanding balance in thousands) Stated Outstanding Interest
Maturity Encumbered DEBT Balance Rate Date Properties
--------------------------------------------------------------------------
------------------------------------------ Unsecured Line of
Credit(1) $76,574 6.06% July 2007 --
------------------------------------------ Industrial Revenue
Bonds(1) $10,000 3.12% December 2014 --
------------------------------------------ Term Loan #1 $22,866
8.17% October 2007 8 ------------------------------------------
Term Loan #2 $34,559 8.15% March 2009 8
------------------------------------------ Term Loan #3 $27,936
7.02% April 2010 7 ------------------------------------------ Term
Loan #4 $45,242 7.16% October 2009 6
------------------------------------------ Term Loan #5 $49,245
7.75% January 2011 6 ------------------------------------------
Mortgage $12,613 10.35% June 2010 1
------------------------------------------ Adjustments (4) $1,440
-- -- -- ------------------------------------------ TOTAL $280,475
7.2%(2) 3.9 years(3) 36 ------------------------------------------
(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) March 31, March 31, 2006 2005
------------------------------ CAPITALIZATION
------------------------------ Common share market capitalization
$741,000 $552,000 ------------------------------ Total market
capitalization $950,000 $996,000 ------------------------------
Common share closing price $16.95 $12.91
------------------------------ Common share dividend(1) $0.55 $0.21
------------------------------ Common share dividend yield(1) 3.2%
1.6% ------------------------------ Preferred share closing price
$24.79 $25.10 ------------------------------ Preferred share
dividend(2) $2.00 $2.00 ------------------------------ Preferred
share dividend yield(2) 8.1% 8.0% ------------------------------
DEBT COVERAGE ------------------------------ Debt weighted average
interest rate 7.2% 7.3% ------------------------------ Debt to
investment in hotel properties, at cost 27% 25%
------------------------------ Debt and preferred shares to
investment in hotel properties 41% 40%
------------------------------ Debt to market capitalization 30%
24% ------------------------------ Debt and preferred shares to
market capitalization 38% 39% ------------------------------
LIQUIDITY/FLEXIBILITY ------------------------------ Debt due 2005
-- $4,000 ------------------------------ Debt due 2006 $4,000
$5,000 ------------------------------ Debt due 2007 $103,000
$58,000 ------------------------------ Debt due 2008 $5,000 $5,000
------------------------------ Debt due 2009 and thereafter
$168,000 $168,000 ------------------------------
------------------------------ Unencumbered hotel assets(3) 48% 47%
------------------------------ Unsecured Line of Credit outstanding
balance $76,574 $30,000 ------------------------------ Unsecured
Line of Credit available balance(4) $46,926 $95,000
------------------------------ SHARES AND UNITS OUTSTANDING
------------------------------ Common Shares 43,023,202 42,774,412
------------------------------ Common Partnership Units 666,891
709,400 ------------------------------ Preferred Partnership Units
3,801,409 3,884,469 ------------------------------ Preferred Shares
5,800,000 5,800,000 ------------------------------ (1) Regular
common share dividends declared for the trailing twelve months
ended March 31, 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 $135 million revolving unsecured
line of credit available balance has been reduced by $11.5 million
in letters of credit at March 31, 2006. INNKEEPERS USA TRUST HOTEL
OPERATING RESULTS (UNAUDITED) Three Months Ended March 31, % March
31, 2006 2006 2005 Inc (dec) ------------------------------------
PORTFOLIO(1) --------------------------------------
--------------------------- Average Daily Rate $109.59 $102.58
6.83% --------------------------- Occupancy 73.09% 72.33% 1.05%
--------------------------- RevPAR $80.09 $74.20 7.94%
--------------------------- ------- 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 $109.35 $101.81
7.41% --------------------------- Occupancy 76.21% 75.14% 1.42%
--------------------------- RevPAR $83.34 $76.50 8.94%
--------------------------- ------- Number of hotel properties 49
------- Percent of total rooms 74.7% ------- Percent of room
revenue(2) 77.7% ------- Upscale(1) ---------------------------
Average Daily Rate $127.79 $119.35 7.07%
--------------------------- Occupancy 70.16% 68.96% 1.74%
--------------------------- RevPAR $89.66 $82.31 8.93%
--------------------------- ------- Number of hotel properties 3
------- Percent of total rooms 5.8% ------- Percent of room
revenue(2) 6.4% ------- Mid Priced(1) ---------------------------
Average Daily Rate $104.65 $100.70 3.92%
--------------------------- Occupancy 61.99% 62.54% -0.88%
--------------------------- RevPAR $64.87 $62.97 3.02%
--------------------------- ------- Number of hotel properties 13
------- Percent of total rooms 19.5% ------- Percent of room
revenue(2) 15.9% ------- BY FRANCHISE AFFILIATION
-------------------------------------- Residence Inn
--------------------------- Average Daily Rate $109.53 $102.20
7.17% --------------------------- Occupancy 76.09% 74.23% 2.51%
--------------------------- RevPAR $83.34 $75.86 9.86%
--------------------------- ------- Number of hotel properties 42
------- Percent of total rooms 63.5% ------- Percent of room
revenue(2) 66.1% ------- Summerfield Suites
--------------------------- Average Daily Rate $102.62 $94.73 8.33%
--------------------------- Occupancy 75.25% 80.43% -6.44%
--------------------------- RevPAR $77.22 $76.19 1.35%
--------------------------- ------- Number of hotel properties 6
------- Percent of total rooms 9.4% ------- Percent of room
revenue(2) 9.1% ------- Hampton Inn(1) ---------------------------
Average Daily Rate $106.43 $101.57 4.78%
--------------------------- Occupancy 61.12% 62.47% -2.16%
--------------------------- RevPAR $65.04 $63.45 2.51%
--------------------------- ------- Number of hotel properties 12
------- Percent of total rooms 18.3% ------- Percent of room
revenue(2) 14.9% ------- BY MANAGEMENT COMPANY
-------------------------------------- Innkeepers Hospitality
Management(1)(3) --------------------------- Average Daily Rate
$109.75 $102.76 6.80% --------------------------- Occupancy 73.46%
72.83% 0.87% --------------------------- RevPAR $80.63 $74.85 7.72%
--------------------------- ------- Number of hotel properties 64
------- Percent of total rooms 97.3% ------- Percent of room
revenue(2) 97.9% ------- Third Party Managed
--------------------------- Average Daily Rate $102.51 $94.08 8.96%
--------------------------- Occupancy 59.52% 54.28% 9.65%
--------------------------- RevPAR $61.01 $51.07 19.46%
--------------------------- ------- Number of hotel properties 1
------- Percent of total rooms 2.7% ------- Percent of room
revenue(2) 2.1% ------- BY GEOGRAPHIC REGION
-------------------------------------- New England [ME, NH, VT, MA,
CT, RI] --------------------------- Average Daily Rate $105.03
$99.18 5.90% --------------------------- Occupancy 63.76% 66.23%
-3.73% --------------------------- RevPAR $66.97 $65.68 1.96%
--------------------------- ------- Number of hotel properties 4
------- Percent of total rooms 4.6% ------- Percent of room
revenue(2) 3.9% ------- Middle Atlantic(1) [NY, NJ, PA]
--------------------------- Average Daily Rate $109.73 $102.96
6.58% --------------------------- Occupancy 66.03% 70.53% -6.38%
--------------------------- RevPAR $72.45 $72.61 -0.22%
--------------------------- ------- Number of hotel properties 10
------- Percent of total rooms 14.1% ------- Percent of room
revenue(2) 12.8% ------- South Atlantic(1) [DE, MD, WV, DC, VA, NC,
SC, GA, FL] --------------------------- Average Daily Rate $119.93
$111.60 7.46% --------------------------- Occupancy 72.24% 74.90%
-3.55% --------------------------- RevPAR $86.63 $83.59 3.64%
--------------------------- ------- Number of hotel properties 15
------- Percent of total rooms 23.9% ------- Percent of room
revenue(2) 25.8% ------- East North Central [OH, MI, IN, IL, WI]
--------------------------- Average Daily Rate $94.04 $90.16 4.30%
--------------------------- Occupancy 68.73% 66.22% 3.79%
--------------------------- RevPAR $64.63 $59.71 8.24%
--------------------------- ------- Number of hotel properties 12
------- Percent of total rooms 16.7% ------- Percent of room
revenue(2) 13.4% ------- East South Central(1) [KY, TN, AL, MS]
--------------------------- Average Daily Rate $86.79 $78.82 10.11%
--------------------------- Occupancy 71.85% 78.09% -7.99%
--------------------------- RevPAR $62.36 $61.55 1.32%
--------------------------- ------- Number of hotel properties 2
------- Percent of total rooms 2.2% ------- Percent of room
revenue(2) 1.7% ------- West North Central [MN, IA, MO, KS, NE, SD,
ND] --------------------------- Average Daily Rate $83.54 $79.02
5.72% --------------------------- Occupancy 84.69% 83.73% 1.15%
--------------------------- RevPAR $70.75 $66.17 6.92%
--------------------------- ------- 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 $100.00 $92.10 8.58%
--------------------------- Occupancy 81.43% 79.03% 3.04%
--------------------------- RevPAR $81.43 $72.78 11.89%
--------------------------- ------- Number of hotel properties 5
------- Percent of total rooms 8.7% ------- Percent of room
revenue(2) 8.9% ------- Mountain [MT, ID, WY, CO, UT, NM, AZ, NV]
--------------------------- Average Daily Rate $92.60 $90.54 2.28%
--------------------------- Occupancy 74.60% 65.65% 13.63%
--------------------------- RevPAR $69.08 $59.44 16.22%
--------------------------- ------- Number of hotel properties 2
------- Percent of total rooms 3.6% ------- Percent of room
revenue(2) 3.1% ------- Pacific [WA, OR, CA, AK, HI]
--------------------------- Average Daily Rate $118.52 $110.07
7.68% --------------------------- Occupancy 79.06% 73.83% 7.08%
--------------------------- RevPAR $93.70 $81.26 15.31%
--------------------------- ------- Number of hotel properties 14
------- Percent of total rooms 25.4% ------- Percent of room
revenue(2) 29.7% ------- BY SELECTED MSA
-------------------------------------- Atlanta
--------------------------- Average Daily Rate $109.82 $99.31
10.58% --------------------------- Occupancy 76.13% 74.09% 2.75%
--------------------------- RevPAR $83.60 $73.57 13.63%
--------------------------- ------- Number of hotel properties 2
------- Percent of total rooms 3.5% ------- Percent of room
revenue(2) 3.7% ------- Boston --------------------------- Average
Daily Rate $99.33 $90.69 9.53% ---------------------------
Occupancy 45.96% 47.01% -2.23% --------------------------- RevPAR
$45.65 $42.64 7.06% --------------------------- ------- Number of
hotel properties 1 ------- Percent of total rooms 1.2% -------
Percent of room revenue(2) 0.7% ------- Chicago
--------------------------- Average Daily Rate $95.93 $91.36 5.00%
--------------------------- Occupancy 65.22% 61.78% 5.57%
--------------------------- RevPAR $62.56 $56.45 10.82%
--------------------------- ------- Number of hotel properties 4
------- Percent of total rooms 7.0% ------- Percent of room
revenue(2) 5.5% ------- Dallas/Ft. Worth
--------------------------- Average Daily Rate $90.26 $82.93 8.84%
--------------------------- Occupancy 80.36% 78.86% 1.90%
--------------------------- RevPAR $72.53 $65.39 10.92%
--------------------------- ------- Number of hotel properties 4
------- Percent of total rooms 6.8% ------- Percent of room
revenue(2) 6.2% ------- Denver --------------------------- Average
Daily Rate $92.60 $90.54 2.28% ---------------------------
Occupancy 74.60% 65.65% 13.63% --------------------------- RevPAR
$69.08 $59.44 16.22% --------------------------- ------- Number of
hotel properties 2 ------- Percent of total rooms 3.6% -------
Percent of room revenue(2) 3.1% ------- Detroit
--------------------------- Average Daily Rate $100.55 $95.57 5.21%
--------------------------- Occupancy 70.78% 67.83% 4.35%
--------------------------- RevPAR $71.17 $64.82 9.80%
--------------------------- ------- Number of hotel properties 3
------- Percent of total rooms 4.5% ------- Percent of room
revenue(2) 4.0% ------- Hartford ---------------------------
Average Daily Rate $110.99 $107.58 3.17%
--------------------------- Occupancy 70.51% 69.70% 1.16%
--------------------------- RevPAR $78.26 $74.99 4.36%
--------------------------- ------- Number of hotel properties 2
------- Percent of total rooms 2.4% ------- Percent of room
revenue(2) 2.4% ------- Philadelphia ---------------------------
Average Daily Rate $103.57 $96.69 7.12% ---------------------------
Occupancy 72.08% 77.81% -7.36% --------------------------- RevPAR
$74.65 $75.24 -0.78% --------------------------- ------- Number of
hotel properties 4 ------- Percent of total rooms 5.8% -------
Percent of room revenue(2) 5.4% ------- Richmond
--------------------------- Average Daily Rate $102.51 $92.96
10.27% --------------------------- Occupancy 74.03% 84.00% -11.87%
--------------------------- RevPAR $75.88 $78.09 -2.83%
--------------------------- ------- Number of hotel properties 2
------- Percent of total rooms 2.3% ------- Percent of room
revenue(2) 2.2% ------- San Francisco/San Jose/Oakland (Silicon
valley) --------------------------- Average Daily Rate $120.65
$111.50 8.21% --------------------------- Occupancy 78.50% 67.13%
16.94% --------------------------- RevPAR $94.71 $74.85 26.53%
--------------------------- ------- Number of hotel properties 8
------- Percent of total rooms 15.0% ------- Percent of room
revenue(2) 17.7% ------- Seattle/Portland
--------------------------- Average Daily Rate $114.37 $103.73
10.26% --------------------------- Occupancy 80.36% 82.72% -2.85%
--------------------------- RevPAR $91.91 $85.81 7.11%
--------------------------- ------- Number of hotel properties 4
------- Percent of total rooms 6.3% ------- Percent of room
revenue(2) 7.3% ------- Washington, D.C.(1)
--------------------------- Average Daily Rate $144.08 $131.27
9.76% --------------------------- Occupancy 66.40% 65.99% 0.62%
--------------------------- RevPAR $95.68 $86.62 10.46%
--------------------------- ------- Number of hotel properties 4
------- Percent of total rooms 6.7% ------- Percent of room
revenue(2) 8.0% ------- (1) Hotel operating results exclude one
hotel property acquired in June 2003 which will be converted to a
Courtyard hotel, one hotel property acquired in June 2004 which was
converted and opened as a Hampton Inn hotel in August 2005, one
hotel property acquired in February 2005 which will be converted to
a Courtyard hotel and one Westin hotel acquired in May 2005 and the
Bullfinch hotel acquired in November 2005. (2) Room revenue for
January 1, 2006 to March 31, 2006. (3) Operating statistics for
hotels acquired in 2005 include room revenue for the applicable
periods from the previous owner for those periods prior to our
acquisition of the hotels. Contact: Dennis Craven (Company) Jerry
Daly or Carol McCune Chief Financial Officer Daly Gray (Media)
(561) 227-1302 (703) 435-6293 DATASOURCE: Innkeepers USA Trust
CONTACT: Dennis Craven, Chief Financial Officer of Innkeepers USA
Trust, +1-561-227-1302; or 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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