EX-99.1 2 sppr_q409release.htm sppr_q409release.htm
 
 
 
Exhibit 99.1


For Immediate Release
Contact:
Mr. Kelly A. Walters
 
President and CEO
Jerry Daly, Carol McCune
kwalters@supertelinc.com
Daly Gray
 
(Media Contact)
Ms. Connie Scarpello
703.435.6293
Sr. Vice President & CFO
jerry@dalygray.com
cscarpello@supertelinc.com
 
   
402.371.2520
 

Supertel Hospitality Reports 2009 Fourth Quarter, Full-Year Results


NORFOLK, Neb., March 31, 2010 – Supertel Hospitality, Inc. (NASDAQ: SPPR), a real estate investment trust (REIT) which owns 114 hotels in 23 states, today announced its results for the fourth quarter and year ended December 31, 2009.
Revenues from continuing operations for the 2009 fourth quarter decreased 10.5 percent to $19.6 million, compared to the year-ago period, and decreased 10.4 percent to $89.0 million for the full year.  Net loss attributable to common shareholders was $(25.7) million, or $(1.17) per diluted share, for the 2009 fourth quarter, compared to net earnings available to common shareholders of $3.0 million, or $0.14 per diluted share, in the 2008 same quarter.  For the full year 2009, net loss attributable to common shareholders was $(28.9) million, compared with net earnings available to common shareholders of $5.5 million in 2008.
The 2009 fourth quarter loss included an aggregate $23.3 million non-cash impairment charge, compared to $0.3 million of impairment charges recorded in the 2008 like period.  Of this, $12.4 million was charged against hotels in discontinued operations, and $10.9 million was booked against hotels held for use.  For the full year 2009, impairment charges against discontinued properties totaled $13.2 million.  Total impairment charges for the year were $24.1 million.
Funds from operations (FFO) were $(23.5) million, or $(1.07) per diluted share, for the 2009 fourth quarter, compared to $1.2 million, or $0.06 per diluted share, in the same 2008 period.  Adjusted FFO for the 2009 fourth quarter (excluding the effects of impairment charges) were $(0.2) million, or $(0.01) per diluted share, compared to $1.5 million or $0.07 per diluted share for the same 2008 period.  FFO for the full year 2009 was $(16.9) million or $(0.78) per diluted share, compared to $14.9 million, or $0.70 per diluted share, for the full year 2008.  Adjusted FFO for the full year 2009 (excluding the effects of impairment charges) were $7.3 million, or $0.34 per diluted share, compared to $15.1 million or $0.71 per diluted share for the full year 2008.
Earnings before interest, taxes, depreciation and amortization, noncontrolling interest and preferred stock dividends (Adjusted EBITDA) decreased to $(19.0) million for the 2009 fourth quarter and was $(1.9) million for the full year 2009.
2009 Fourth Quarter and Full Year Highlights
·  
Sold two hotels in the 2009 fourth quarter.  Divested eight properties for the full year for net proceeds of $17.2 million.
 
·  
Classified 18 properties as held for sale in the 2009 fourth quarter, for a total of 19 properties held for sale as of December 31.
 
·  
Refinanced a $9.0 million mortgage loan and extended the term of a second $9.0 million loan.
 
·  
Reduced total liabilities to $199.9 million at the end of fiscal 2009 from $216.5 million at the end of fiscal 2008.
 
·  
Reorganized the senior management team, appointed a new chairman, and expanded an existing executive position to include COO duties.
 

“During the past year, the new management team reviewed all aspects of the company and its growth strategies,” said Kelly A. Walters, Supertel president and CEO.  “A key part of that process was finalized in the fourth quarter when we completed a comprehensive review of our hotel portfolio.  We have updated our strategy to not only reflect today’s changed economic conditions but also how we will evaluate our hotels and their value based on new and more stringent criteria.  The review of each property now includes debt service capability, hold period, estimated return on investment, and local market conditions.
“Implementing this updated strategy has created impairment issues and short-term losses, but we believe it will result in a stronger, more resilient real estate portfolio that will be less susceptible to the value swings that occur in the hotel industry,” he said.
Fourth Quarter Results
The company had a net loss of $(25.4) million for the 2009 fourth quarter, compared to net earnings of $3.6 million for the same 2008 period.  The 2009 fourth quarter loss includes a $23.3 million non-cash impairment charge.  Additionally, the 2008 fourth quarter resulted in net income due to a $5.6 million gain being recognized on the sale of two hotels in the fourth quarter, partially offset by a loss from continuing operations of $(0.7) million and a $(1.3) million loss from discontinued operations.  All income and expenses related to sold hotels are classified as discontinued operations.
After recognition of non-controlling interest and dividends for preferred stock shareholders, the net loss attributable to common shareholders was $(25.7) million, or $(1.17) per diluted share, for the 2009 fourth quarter, compared with net earnings available to common shareholders of $3.0 million, or $0.14 per diluted share, for the like 2008 period.
Fourth quarter 2009 revenues from continuing operations decreased $2.3 million, or 10.5 percent, primarily due to the economic downturn.  The company’s 59 continuing operations economy hotels reported a 12.2 percent decrease in revenue per available room (RevPAR) to $24.34 in the 2009 fourth quarter, caused by a 9.8 percent drop in occupancy to 51.6 percent and a 2.7 percent decrease in average daily rate (ADR) to $47.12.  The company’s eight continuing operations extended-stay hotels reported a 6.5 percent increase in RevPAR to $15.62, as a result of an 11.4 percent increase in occupancy to 63.5 percent, offset by a 4.4 percent decline in ADR to $24.60.
Fourth quarter RevPAR for the company’s 29 continuing operations midscale without food and beverage hotels decreased 11.6 percent to $32.73, the result of a 7.6 percent drop in occupancy to 49.6 percent, and a 4.2 percent decrease in ADR to $66.03.
The portfolio of 96 hotels in continuing operations in the 2009 fourth quarter, compared with the same period a year earlier, reported a 5.9 percent decline in occupancy, and a 4.8 percent decrease in ADR, for a 10.5 percent decline in RevPAR, compared to an 11.7 percent RevPAR decline for the industry, as reported by Smith Travel Research.
“It remains a very difficult operating environment,” Walters said.  “We believe the past two years have been the most challenging from an operations standpoint since the Great Depression.  As the year progressed, the rate of decline slowed, a trend that continues into the 2010 first quarter.”
Hotel and property operations expenses from continuing operations for the 2009 fourth quarter declined $0.5 million, or 3.1 percent.  The decrease primarily results from cost-saving measures implemented to compensate for lower occupancy.
Interest expense from continuing operations remained essentially unchanged at $2.6 million for the quarter.  Depreciation and amortization expense from continuing operations remained flat at $3.1 million.
Property operating income (POI) is calculated as revenue from room rentals and other hotel services less hotel and property operations expenses.  For the 2009 fourth quarter, POI from continuing operations decreased $1.8 million, or 32.9 percent, compared to the year-ago period.  This decrease resulted from the decline in revenue, slightly offset by reduced expenses.
General and administration expense from continuing operations for the 2009 fourth quarter dropped $0.1 million, or 9.5 percent, compared to the year-ago period.  The decrease is related primarily to reduction in professional fees, partially offset by an increase in payroll expense due to severance pay.
Disposition Program
During 2009, the company sold eight hotels for approximately $17.2 million, resulting in a gain on sale of approximately $2.5 million, which was used to strengthen the balance sheet by reducing debt.  The properties sold are:
Ø Super 8
Charles City, IA
43 rooms
Ø Holiday Inn Express
Gettysburg, PA
51 rooms
Ø Masters Inn
Kissimmee, FL
116 rooms
Ø Comfort Inn
Ellsworth, ME
63 rooms
Ø Super 8
Anamosa, IA
35 rooms
Ø Comfort Inn
Dahlgren, VA
59 rooms
Ø Masters Inn
Orlando, FL
120 rooms
Ø Masters Inn
Kissimmee, FL
187 rooms
“The sale of these assets and the 18 properties we have currently classified as held for sale will strategically strengthen our portfolio,” Walters said.  “A key component of our new strategy is to reduce our weighting in the economy sector.  This segment has relatively low barriers to new competition and has small owner/operators whose cost structure often is substantially lower than the large owner/operator cost structure.
“Economy hotels will remain an important part of our portfolio,” he noted.  “However, over time, we intend to balance our portfolio with more properties in the midscale without food and beverage segment, which historically has been less volatile for us, with more moderate declines in the down-part of the economic cycle and greater upside potential during the up-portion of the economic cycle.”
Balance Sheet
The company continued to improve its balance sheet in 2009 through dispositions, debt repayment, debt extensions and refinancings.  In the second quarter, the company refinanced a $9.0 million, 8.4 percent loan scheduled to mature in November 2009.  The loan was refinanced using a $10 million, 5.5 percent facility due in May 2012.  A second $9.0 million loan was extended and currently is due in August 2010.  “We are negotiating with the lender and with other credit sources to refinance this loan, which is our principal debt maturing in 2010.  Sales of hotels in 2010 are also expected to reduce the amount of the loan we ultimately refinance,” Walters said.
The company as of December 31, 2009 has $164.5 million in outstanding debt on hotels in continuing operations with an average term of 4.8 years and weighted average annual interest rate of 5.98 percent.

Dividends
The company did not declare a common stock dividend for the 2009 fourth quarter or full year.  The company will monitor requirements to maintain its REIT status and will regularly evaluate the dividend policy.
Outlook
“The economy is showing signs of stabilizing, and the rate of decline in RevPAR appears to be slowing,” Walters said.  “The pace of declining occupancy is decelerating but getting traction in room rates remains a challenge.  We continue to work closely with our management companies to enhance revenues while stringently controlling costs.  We not only are looking at today, but at how we can continue to hold costs without sacrificing the guest experience when the economy begins to gain momentum.  Our foremost priorities in 2010 are preserving and generating capital sufficient to fund our liquidity needs.
“We are finalizing our strategic plan and intend to provide greater detail in the near future,” he noted.  “Our senior management team is in harmony with a more clarified vision of the future, and we are taking the appropriate steps to optimize our opportunities as the economy rebounds.”
About Supertel Hospitality, Inc.
As of March 31, 2010, Supertel Hospitality, Inc. (NASDAQ: SPPR) owns 114 hotels comprised of 9,929 rooms in 23 states. The company’s hotel portfolio includes Super 8, Comfort Inn/Comfort Suites, Hampton Inn, Holiday Inn Express, Supertel Inn, Days Inn, Ramada Limited, Guest House Inn, Sleep Inn, Savannah Suites, Masters Inn, Key West Inns and Baymont Inn.  This diversity enables the company to participate in the best practices of each of these respected hospitality partners.  The company specializes in limited service hotels, which do not normally offer food and beverage service. For more information or to make a hotel reservation, visit www.supertelinc.com.
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company’s filings with the Securities and Exchange Commission.

 
 

 

SELECTED FINANCIAL DATA:

The following table sets forth the Company’s balance sheet for the years ended December 31, 2009 and 2008.  The Company owned 115 and 123 hotels, respectively.
(in thousands, except share and per share data).
   
As of
 
   
December 31,
   
December 31,
 
   
2009
   
2008
 
             
             
ASSETS
           
Investments in hotel properties
  $ 319,770     $ 330,271  
Less accumulated depreciation
    86,069       77,028  
      233,701       253,243  
                 
Cash and cash equivalents
    428       712  
Accounts receivable, net of allowance for doubtful accounts of $95 and $107
    2,043       2,401  
Prepaid expenses and other assets
    4,779       2,903  
Deferred financing costs, net
    1,414       1,580  
Investment in hotel properties held for sale
    32,030       60,638  
                 
    $ 274,395     $ 321,477  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
LIABILITIES
               
Accounts payable, accrued expenses and other liabilities
  $ 10,340     $ 13,697  
Debt related to hotel properties held for sale
    24,975       37,022  
Long-term debt
    164,538       165,784  
      199,853       216,503  
                 
Redeemable noncontrolling interest in consolidated
               
partnership, at redemption value
    511       1,778  
                 
Redeemable preferred stock
               
Series B, 800,000 shares authorized; $.01 par value,
               
332,500 shares outstanding, liquidation preference of $8,312
    7,662       7,662  
                 
SHAREHOLDERS' EQUITY
               
Preferred stock, 40,000,000 shares authorized;
               
Series A, 2,500,000 shares authorized, $.01 par value, 803,270
               
shares outstanding, liquidation preference of $8,033
    8       8  
Common stock, $.01 par value, 100,000,000 shares authorized;
               
22,002,322 and 20,924,677 shares outstanding
    220       209  
Additional paid-in capital
    120,153       112,804  
Distributions in excess of retained earnings
    (54,420 )     (25,551 )
Total shareholder equity
    65,961       87,470  
                 
Noncontrolling interest in consolidated partnership,
               
redemption value $237 and $2,101
    408       8,064  
                 
Total Equity
    66,369       95,534  
                 
    $ 274,395     $ 321,477  
                 


 
 

 

The following table sets forth the Company’s results of operations for the three and twelve
months ended December 31, 2009 and 2008, respectively.
(in thousands, except per share data)
   
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
Unaudited
   
Unaudited
             
   
2009
   
2008
   
2009
   
2008
 
REVENUES
                       
Room rentals and other hotel services
  $ 19,622     $ 21,933     $ 88,970     $ 99,256  
                                 
EXPENSES
                               
Hotel and property operations
    15,963       16,479       67,360       71,132  
Depreciation and amortization
    3,105       3,115       12,457       12,067  
General and administrative
    675       746       3,813       3,696  
      19,743       20,340       83,630       86,895  
                                 
EARNINGS BEFORE NET GAINS (LOSSES)
                               
ON DISPOSITIONS OF ASSETS, OTHER INCOME,
                               
INTEREST EXPENSE, IMPAIRMENT LOSSES, NONCONTROLLING
                               
INTEREST AND INCOME TAX BENEFIT
    (121 )     1,593       5,340       12,361  
                                 
Net gains (losses) on dispositions of assets
    (67 )     -       (146 )     1  
Other income
    34       38       134       129  
Interest expense
    (2,620 )     (2,684 )     (10,414 )     (10,738 )
Impairment losses
    (10,872 )     -       (10,872 )     -  
                                 
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE
                               
INCOME TAXES AND NONCONTROLLING INTEREST
    (13,646 )     (1,053 )     (15,958 )     1,753  
                                 
Income tax benefit
    12       373       1,047       507  
                                 
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
    (13,634 )     (680 )     (14,911 )     2,260  
                                 
Earnings (loss) from discontinued operations
    (11,800 )     4,265       (12,614 )     4,999  
                                 
NET EARNINGS (LOSS)
    (25,434 )     3,585       (27,525 )     7,259  
                                 
Noncontrolling interest income (expense)
    150       (247 )     130       (603 )
                                 
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTERESTS
    (25,284 )     3,338       (27,395 )     6,656  
                                 
Preferred stock dividends
    (368 )     (369 )     (1,474 )     (1,160 )
                                 
NET EARNINGS (LOSS) ATTRIBUTABLE
                               
 TO COMMON SHAREHOLDERS
  $ (25,652 )   $ 2,969     $ (28,869 )   $ 5,496  
                                 
NET EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED
                               
EPS from continuing operations
  $ (0.63 )   $ (0.05 )   $ (0.75 )   $ 0.04  
EPS from discontinued operations
  $ (0.54 )   $ 0.19     $ (0.58 )   $ 0.22  
EPS basic and diluted
  $ (1.17 )   $ 0.14     $ (1.33 )   $ 0.26  
                                 
AMOUNTS ATTRIBUTABLE TO COMMON SHAREHOLDERS
                               
Income from continuing operations, net of tax
  $ (13,932 )   $ (1,036 )   $ (16,386 )   $ 826  
Discontinued operations, net of tax
    (11,720 )     4,005       (12,483 )     4,670  
Net earnings (loss)
  $ (25,652 )   $ 2,969     $ (28,869 )   $ 5,496  
                                 
 
 
 

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

In thousands, except per share data:
   
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
unaudited
   
unaudited
             
   
2009
   
2008
   
2009
   
2008
 
Weighted average number of shares outstanding for EPS
                       
 basic
    21,956       20,924       21,647       20,840  
 diluted
    21,956       20,924       21,647       20,840  
Weighted average number of shares outstanding for FFO per share
                               
   basic
    21,956       20,924       21,647       20,840  
   diluted
    21,956       20,924       21,647       22,346  
                                 
Reconciliation of Weighted average number of shares for
                               
EPS diluted to FFO per share diluted:
                               
EPS diluted shares
    21,956       20,924       21,647       20,840  
Common stock issuable upon exercise or conversion of:
                               
   Series A Preferred Stock
    -       -       -       1,506  
FFO per share diluted shares
    21,956       20,924       21,647       22,346  
                                 
Reconciliation of net earnings (loss) to FFO-Unaudited
                               
Net earnings (loss) available to common shareholders
  $ (25,652 )   $ 2,969     $ (28,869 )   $ 5,496  
Depreciation and amortization, including disc ops
    3,370       3,837       14,241       14,982  
Net (gains) losses on disposition of assets
    (1,217 )     (5,583 )     (2,264 )     (5,581 )
FFO
  $ (23,499 )   $ 1,223     $ (16,892 )   $ 14,897  
Impairment
    23,305       250       24,148       250  
Adjusted FFO (without impairment expense)
  $ (194 )   $ 1,473     $ 7,256     $ 15,147  
                                 
                                 
FFO per share - basic
  $ (1.07 )   $ 0.06     $ (0.78 )   $ 0.71  
Adjusted FFO per share (without impairment expense) - basic
  $ (0.01 )   $ 0.07     $ 0.34     $ 0.73  
FFO per share - diluted
  $ (1.07 )   $ 0.06     $ (0.78 )   $ 0.70  
Adjusted FFO per share (without impairment expense) - diluted
  $ (0.01 )   $ 0.07     $ 0.34     $ 0.71  
                                 

FFO is a non-GAAP financial measure.  We consider FFO to be a market accepted measure of an equity REIT's operating performance, which is necessary, along with net earnings (loss), for an understanding of our operating results.  FFO, as defined under the National Association of Real Estate Investment Trusts (NAREIT) standards, consists of net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets, plus depreciation and amortization of real estate assets. We believe our method of calculating FFO complies with the NAREIT definition.  FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties.  FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.  All REITs do not calculate FFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO for similar REITs.

We use FFO as a performance measure to facilitate a periodic evaluation of our operating results relative to those of our peers, who, like us, are typically members of NAREIT.  We consider FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a meaningful indication of our performance.

We view the impairment charges as a nonrecurring expense, and we have excluded the impairment charges in calculating Adjusted FFO.
 
   
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
2009
   
2008
   
2009
   
2008
 
   
(Unaudited)
   
(Unaudited)
             
RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA
                       
Net earnings (loss) available to common shareholders
  $ (25,652 )   $ 2,969     $ (28,869 )   $ 5,496  
  Interest expense, including disc ops
    3,232       3,376       13,015       13,848  
  Income tax benefit, including disc ops
    (141 )     (117 )     (1,647 )     (305 )
  Depreciation and amortization, including disc ops
    3,370       3,837       14,241       14,982  
    EBITDA
    (19,191 )     10,065       (3,260 )     34,021  
  Noncontrolling interest
    (150 )     247       (130 )     603  
  Preferred stock dividend
    368       369       1,474       1,160  
    Adjusted EBITDA
  $ (18,973 )   $ 10,681     $ (1,916 )   $ 35,784  
                                 

Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We calculate Adjusted EBITDA by adding back to net earnings (loss) available to common shareholders certain non-operating expenses and non-cash charges which are based on historical cost accounting and we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods, even though Adjusted EBITDA also does not represent an amount that accrues directly to common shareholders. In calculating Adjusted EBITDA, we also add back preferred stock dividends and noncontrolling interests, which are cash charges.

Adjusted EBITDA doesn’t represent cash generated from operating activities determined by GAAP and should not be considered as an alternative to net income, cash flow from operations or any other operating performance measure prescribed by GAAP. Adjusted EBITDA is not a measure of our liquidity, nor is Adjusted EBITDA indicative of funds available to fund our cash needs, including our ability to make cash distributions. Neither does the measurement reflect cash expenditures for long-term assets and other items that have been and will be incurred. Adjusted EBITDA may include funds that may not be available for management’s discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. To compensate for this, management considers the impact of these excluded items to the extent they are material to operating decisions or the evaluation of our operating performance. Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

The following table sets forth the operations of the Company’s same store hotel properties for the three and twelve months ended December 31, 2009 and 2008, respectively.    This presentation includes non-GAAP financial measures.  The Company believes that the presentation of hotel property operating income (POI) is helpful to investors, and represents a more useful description of its core operations, as it better communicates the comparability of its hotels’ operating results.



   
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
2009
   
2008
   
2009
   
2008
 
Same Store: *
 
(Unaudited)
   
(Unaudited)
             
    Revenue per available room (RevPAR):
                       
         Midscale w/o F&B **
  $ 32.73     $ 37.01     $ 38.00     $ 43.49  
         Economy
  $ 24.34     $ 27.71     $ 28.19     $ 31.03  
         Extended Stay
  $ 15.62     $ 14.67     $ 15.58     $ 16.18  
                 Total
  $ 25.31     $ 28.29     $ 28.96     $ 32.20  
                                 
    Average daily room rate (ADR):
                               
         Midscale w/o F&B **
  $ 66.03     $ 68.94     $ 67.78     $ 71.17  
         Economy
  $ 47.12     $ 48.43     $ 48.83     $ 49.48  
         Extended Stay
  $ 24.60     $ 25.73     $ 24.78     $ 25.30  
                 Total
  $ 47.88     $ 50.31     $ 49.90     $ 51.54  
                                 
    Occupancy percentage:
                               
         Midscale w/o F&B **
    49.6 %     53.7 %     56.1 %     61.1 %
         Economy
    51.6 %     57.2 %     57.7 %     62.7 %
         Extended Stay
    63.5 %     57.0 %     62.9 %     63.9 %
                 Total
    52.9 %     56.2 %     58.0 %     62.5 %

 
 

 


   
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
2009
   
2008
   
2009
   
2008
 
   
(Unaudited)
   
(Unaudited)
             
Total Hotels:
                       
    Revenue per available room (RevPAR):
  $ 25.31     $ 28.29     $ 28.96     $ 32.20  
    Average daily room rate (ADR):
  $ 47.88     $ 50.31     $ 49.90     $ 51.54  
    Occupancy percentage:
    52.9 %     56.2 %     58.0 %     62.5 %
                                 
Revenue from room rentals and other hotel services consists of:
                               
    Room rental revenue
  $ 18,995     $ 21,245     $ 86,239     $ 96,258  
    Telephone revenue
    73       67       299       319  
    Other hotel service revenues
    554       621       2,432       2,679  
Total revenue from room rentals and other hotel services
  $ 19,622     $ 21,933     $ 88,970     $ 99,256  
                                 
Room rentals and other hotel services
                               
  Total room rental and other hotel services
  $ 19,622     $ 21,933     $ 88,970     $ 99,256  
                                 
Hotel and property operations expense
                               
  Total hotel and property operations expense
  $ 15,963     $ 16,479     $ 67,360     $ 71,132  
                                 
Property Operating Income ("POI")
                               
  Total property operating income
  $ 3,659     $ 5,454     $ 21,610     $ 28,124  
                                 
POI as a percentage of revenue from room rentals
                               
and other hotel services
                               
  Total POI as a percentage of revenue
    18.6 %     24.9 %     24.3 %     28.3 %
                                 


* Same Store reflects 96 hotels in continuing operations for the three months and year to date ended December 31, 2009 and 2008.

** “w/o F & B” indicates without food and beverage.

 
 

 


RECONCILIATION OF NET EARNINGS (LOSS) TO POI
 
Three months
   
Twelve months
 
   
ended December 31,
   
ended December 31,
 
   
2009
   
2008
   
2009
   
2008
 
   
(Unaudited)
   
(Unaudited)
             
Net earnings (loss)
  $ (25,434 )   $ 3,585     $ (27,525 )   $ 7,259  
Depreciation and amortization, including disc ops
    3,370       3,837       14,241       14,982  
Net (gain) loss on disposition of assets, including disc ops
    (1,217 )     (5,583 )     (2,264 )     (5,581 )
Other income
    (34 )     (38 )     (134 )     (129 )
Interest expense, including disc ops
    3,232       3,376       13,015       13,848  
General and administrative expense
    675       746       3,813       3,696  
Impairment losses
    23,305       250       24,148       250  
Income tax benefit, including disc ops
    (141 )     (117 )     (1,647 )     (305 )
Room rentals and other hotel services - discontinued operations
    (2,893 )     (5,262 )     (16,524 )     (25,729 )
Hotel and property operations expense - discontinued operations
    2,796       4,660       14,487       19,833  
POI
  $ 3,659     $ 5,454     $ 21,610     $ 28,124  

The following table presents our RevPAR, ADR and Occupancy, by region, for the three months ended December 31, 2009 and 2008, respectively.  The comparisons of same store operations are for 96 hotels in continuing operations as of October 1, 2008.
         
Three months ended December 31, 2009
       
Three months ended December 31, 2008
 
Same Store
 
Room
                     
Room
                   
Region
 
Count
   
RevPAR
   
Occupancy
   
ADR
   
Count
   
RevPAR
   
Occupancy
   
ADR
 
Mountain
    214     $ 25.29       53.6 %   $ 47.15       214     $ 30.44       61.1 %   $ 49.81  
West North Central
    2,670       24.48       52.2 %     46.87       2,670       28.84       61.3 %     47.04  
East North Central
    1,081       32.77       52.0 %     63.05       1,081       37.25       58.3 %     63.84  
Middle Atlantic/New England
    142       35.01       54.9 %     63.82       142       38.48       57.4 %     67.01  
South Atlantic
    2,772       22.12       53.6 %     41.23       2,772       23.90       52.4 %     45.59  
East South Central
    822       26.64       46.9 %     56.81       822       28.88       49.6 %     58.22  
West South Central
    456       26.48       63.6 %     41.62       456       25.19       53.8 %     46.82  
Total Same Store
    8,157     $ 25.31       52.9 %   $ 47.88       8,157     $ 28.29       56.2 %   $ 50.31  
                                                                 
                                                                 
States included in the Regions
                                                               
Mountain
 
Idaho and Montana
                                                 
West North Central
 
Iowa, Kansas, Missouri, Nebraska and South Dakota
                               
East North Central
 
Indiana and Wisconsin
                                                 
Middle Atlantic/New England
 
Pennsylvania
                                                 
South Atlantic
 
Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia
         
East South Central
 
Alabama, Kentucky and Tennessee
                                         
West South Central
 
Arkansas and Louisiana
                                                 
                                                                 



 
 

 

The following table presents our RevPAR, ADR and Occupancy, by region, for the twelve months ended December 31, 2009 and 2008, respectively.  The comparisons of same store operations are for 96 hotels owned as of January 1, 2008, including nine of the ten hotels purchased on January 2, 2008.

   
2009
   
2008
 
Same Store
 
Room
                     
Room
                   
Region
 
Count
   
RevPAR
   
Occupancy
   
ADR
   
Count
   
RevPAR
   
Occupancy
   
ADR
 
Mountain
    214     $ 31.96       62.1 %   $ 51.50       214     $ 38.02       73.2 %   $ 51.97  
West North Central
    2,670       28.44       59.4 %     47.86       2,670       31.47       65.2 %     48.25  
East North Central
    1,081       36.25       58.5 %     61.96       1,081       41.85       65.3 %     64.11  
Middle Atlantic/New England
    142       38.90       58.9 %     66.04       142       43.47       64.3 %     67.63  
South Atlantic
    2,772       25.71       57.8 %     44.48       2,772       28.39       60.3 %     47.07  
East South Central
    822       31.29       53.2 %     58.82       822       33.59       55.5 %     60.53  
West South Central
    456       25.84       56.9 %     45.38       456       27.91       59.7 %     46.73  
Total Same Store Hotels
    8,157     $ 28.96       58.0 %   $ 49.90       8,157     $ 32.20       62.5 %   $ 51.54  
                                                                 
                                                                 
States included in the Regions
                                                               
Mountain
 
Idaho and Montana
                                                 
West North Central
 
Iowa, Kansas, Missouri, Nebraska and South Dakota
                               
East North Central
 
Indiana and Wisconsin
                                                 
Middle Atlantic/New England
 
Pennsylvania
                                                 
South Atlantic
 
Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia
         
East South Central
 
Alabama, Kentucky and Tennessee
                                         
West South Central
 
Arkansas and Louisiana