Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Contract/Agreement, Conference Call, Webcast

Service Properties Trust Announces First Quarter 2020 Results


Service Properties Trust (Nasdaq: SVC) today announced its financial results for the quarter ended March 31, 2020:

 

Three Months Ended March 31,

 

2020

 

2019

 

($ in thousands, except per share data)

Net income (loss)

$

 

(33,650

)

 

$

 

225,787

 

Net income (loss) per common share

$

 

(0.20

)

 

$

 

1.37

 

Adjusted EBITDAre (1)

$

 

195,137

 

 

$

 

195,901

 

Normalized FFO (1)

$

 

123,084

 

 

$

 

144,640

 

Normalized FFO per common share (1)

$

 

0.75

 

 

$

 

0.88

 

(1)

Additional information and reconciliations of net income (loss) determined in accordance with U.S. generally accepted accounting principles, or GAAP, to certain non-GAAP measures including EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Normalized FFO, for the three months ended March 31, 2020 and 2019 appear later in this press release.

John Murray, President and Chief Executive Officer of SVC, made the following statement:

"While the travel industry and certain service retail businesses, particularly theaters, fitness centers and casual dining restaurants, are experiencing unprecedented challenges due to the COVID-19 pandemic, we entered this crisis in a solid financial position. We continue to believe SVC has the ability to withstand the current economic downturn because of our strong balance sheet, liquidity and agreements with our hotel operators and net lease tenants.

In response to the COVID-19 pandemic, we have taken significant and difficult steps to preserve capital until economic conditions improve. These included reducing our quarterly dividend and deferring non-essential capital spending. We have no debt maturities until 2021 and $500 million of availability under our revolving credit facility, which we amended in May 2020 to obtain waivers from compliance with certain financial covenants through March 2021.

Our earnings for the first two and a half months of the first quarter met our expectations, but the impact of the COVID-19 pandemic during the last two weeks of the quarter was acute and continues. We remain committed to working closely with our hotel operators to identify ways to optimally reduce operating costs. We are also working with our net lease tenants, especially those whose businesses are temporarily closed due to government mandates or guidelines, by generally considering requests for rent relief and we have agreed to rent deferrals which will be payable beginning in September 2020 in 12 equal monthly installments in order to help them withstand the crisis. As of May 7, 2020 we have agreed to defer an aggregate of $8.6 million of second quarter 2020 rent for tenants representing approximately 6.4% of our annual minimum returns and rents.

We are a large, diverse, well-capitalized REIT and we believe we are well positioned to manage through this crisis."

Results for the Quarter Ended March 31, 2020 and Recent Activities:

Hotel Portfolio Update:

Hotel occupancies have continued to decrease dramatically industry-wide since mid-March 2020. For the 28 days ended May 2, 2020, occupancy for SVC's hotels was 23.3%.

Since March 31, 2020, SVC has closed 19 hotels and most of its other hotels are operating with limited staffing due to significant occupancy declines resulting from various forms of stay-at-home restrictions being enforced throughout the U.S. due to the COVID-19 pandemic. Despite overall weak demand, SVC's suburban extended stay hotels and select service hotels have so far performed better than its urban full-service hotels. SVC also expects its diverse portfolio of suburban extended stay and select service hotels may recover more quickly than its urban full-service hotels when stay-at-home orders are lifted.

As the demand for lodging deteriorates, SVC continues to work with its operators to mitigate the impact on its hotel operations. Efforts to reduce operating expenses include, but are not limited to staffing reductions and furloughs, utility consumption reductions, purchasing reductions and eliminations, service contract reductions and eliminations, food services and exercise facilities closures and the reduction or elimination of certain marketing expenditures. SVC has also agreed to suspend contributions to its FF&E reserves under certain of its operating agreements.

During April 2020, SVC advanced an aggregate of $70.7 million of working capital to certain of its hotel operators to cover projected operating losses. SVC advanced $37.0 million to InterContinental Hotels Group, plc (NYSE: IHG), or IHG, $30.0 million to Marriott International, Inc. (Nasdaq: MAR), or Marriott, $2.4 million to Wyndham Hotels & Resorts, Inc (NYSE: WH). or Wyndham, and $1.3 million to Hyatt Hotels Corporation (NYSE: H), or Hyatt. To date in May 2020, Sonesta has requested $7.4 million and Hyatt has requested an additional $1.3 million of working capital advances. Under certain of SVC's hotel agreements, working capital advances are reimbursable to SVC from a share of future cash flow from the applicable hotel operations in excess of the minimum returns due to SVC and certain fees to the manager, if any.

As of March 31, 2020, SVC had $129.5 million of security deposits and guarantees available to cover shortfalls in hotel cash flows available to pay the minimum returns and rents due to SVC from certain hotel operators. Based on current estimates, SVC projects that it will exhaust all of the security deposits and most of the guarantees its hotel operators have provided by as early as the second quarter of 2020.

Net Lease Portfolio Update:

TravelCenters of America Inc. (Nasdaq: TA), or TA, which as of March 31, 2020 represented 25.5% of SVC's minimum rents and returns, is current on all of its lease payments due to SVC. As an essential business supporting the country's truckers and our nation's supply chain, all of SVC's travel centers are open and operating, although these properties have also experienced negative impacts from the pandemic, including closing most of the full service restaurants at SVC owned travel centers.

SVC has collected 45% of April rents from its other net lease tenants. SVC has entered into rent deferral agreements with 84 net lease retail tenants with leases requiring an aggregate of $62.0 million of annual minimum rents. Generally these rent deferrals are for one to three months of rent and will be payable, in most cases, in 12 equal monthly installments beginning in September 2020. In aggregate, SVC has deferred $8.6 million of rent from its net lease tenants to date.

Financing Activities:

On March 30, 2020, SVC announced a $0.01 per common share dividend to be paid to its shareholders of record on April 21, 2020 and distributed on or about May 21, 2020.

On May 8, 2020, SVC amended the credit agreement governing its $1 billion unsecured revolving credit facility and $400 million unsecured term loan. The amendment provides for a waiver of certain of the financial covenants under its credit agreement through March 31, 2021, during which, subject to certain conditions, SVC will continue to have access to undrawn amounts under the credit facility. In return for temporary covenant relief and continued access to undrawn amounts under its credit facility, SVC agreed to the following temporary changes to its credit facility through March 31, 2020:

Recent Investment Activities:

During the quarter ended March 31, 2020, SVC sold six net lease properties with an aggregate of 292,276 square feet in five states for an aggregate sales price of $8.0 million, excluding closing costs.

During the quarter ended March 31, 2020, SVC acquired a portfolio of three net lease properties with approximately 6,696 square feet in two states with leases requiring an aggregate of $0.4 million of annual minimum rent for an aggregate purchase price of $7.0 million, excluding acquisition related costs.

SVC has entered agreements to sell seven net lease properties with an aggregate of 821,068 square feet in six states with leases requiring an aggregate of $5.4 million of annual minimum rents for an aggregate sales price of $59.5 million, excluding closing costs. SVC expects these sales to be completed by the third quarter of 2020.

SVC was previously marketing for sale 20 Wyndham branded hotels with an aggregate net carrying value of $110.5 million and 33 Marriott hotels with an aggregate net carrying value of $221.1 million and was in the process of launching a marketing effort related to its 39 Sonesta ES Suites hotels with an aggregate net carrying value of $461.3 million. SVC currently expects transactions related to any of these hotels will be delayed until later in 2020 or 2021 as a result of current market conditions due to the COVID-19 pandemic and these transactions may be delayed beyond 2021 or may not occur.

During the quarter ended March 31, 2020, SVC funded $38.4 million of capital improvements to certain of its properties. Pursuant to the terms of its management and lease agreements with its managers and tenants, some of these capital improvements resulted in increases in SVC's contractual annual minimum returns and rents of $2.5 million.

Sonesta Agreements:

On February 27, 2020, SVC entered into a transaction agreement with Sonesta Holdco Corporation and its subsidiaries, or Sonesta, pursuant to which SVC and Sonesta modified their existing business arrangements, as follows:

Except as described above, the economic terms of SVC's agreements with Sonesta are consistent with their historical agreements.

Hotel Portfolio:

As of March 31, 2020, SVC had six operating agreements with six hotel operating companies for 329 hotels with 51,358 rooms, which represented 61% of SVC's total annual minimum returns and rents.

Hotel Managers and Tenants:

Net Lease Portfolio:

As of March 31, 2020, SVC owned 813 net lease service-oriented retail properties with an aggregate of 14.5 million square feet requiring aggregate annual minimum rent of $379.5 million which represented 39% of SVC's total annual minimum returns and rents. The portfolio was 98% leased by 187 tenants operating under 128 brands in 22 distinct industries with a weighted (by annual minimum rent) average lease term of 11.1 years. As of the quarter ended March 31, 2020, the aggregate coverage of SVC's net lease portfolio's minimum rent was 2.28x. TA is SVC's largest tenant. As of March 31, 2020, SVC leased to TA a total of 179 travel centers under five leases that expire between 2029 and 2035 and require aggregate annual minimum rents of $246.1 million.

Leasing and Occupancy:

During the quarter ended March 31, 2020, SVC entered lease renewals for an aggregate of 59,694 rentable square feet at weighted (by rentable square feet) average rents that were 14.8% below prior rents for the same space. The weighted (by rentable square feet) average lease term for these leases was 5.1 years. There were no leasing concessions or capital commitments for these leases.

Conference Call:

At 10:00 a.m. Eastern Time this morning, John Murray, Chief Executive Officer, Brian Donley, Chief Financial Officer, and Todd Hargreaves, Vice President, will host a conference call to discuss SVC's first quarter 2020 financial results. The conference call telephone number is (877) 329-3720. Participants calling from outside the United States and Canada should dial (412) 317-5434. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through Sunday, May 17, 2020. To access the replay, dial (412) 317-0088. The replay pass code is 10141397.

A live audio webcast of the conference call will also be available in a listen-only mode on SVC's website, www.svcreit.com. Participants wanting to access the webcast should visit SVC's website about five minutes before the call. The archived webcast will be available for replay on SVC's website for about one week after the call. The transcription, recording and retransmission in any way of SVC's first quarter conference call is strictly prohibited without the prior written consent of SVC.

Supplemental Data:

A copy of SVC's First Quarter 2020 Supplemental Operating and Financial Data is available for download at SVC's website, www.svcreit.com. SVC's website is not incorporated as part of this press release.

Service Properties Trust is a REIT which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada with 148 distinct brands across 23 industries. SVC's properties are primarily operated under long-term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, Massachusetts.

Non-GAAP Financial Measures and Certain Definitions:

SVC presents certain "non-GAAP financial measures" within the meaning of applicable Securities and Exchange Commission, or SEC, rules, including earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA for real estate, or EBITDAre, Adjusted EBITDAre, funds from operations, or FFO, and Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income as indicators of SVC's operating performance or as measures of SVC's liquidity. These measures should be considered in conjunction with net income as presented in SVC's condensed consolidated statements of income. SVC considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income. SVC believes these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of SVC's operating performance between periods and with other REITs.

Please see the pages attached hereto for a more detailed statement of SVC's operating results and financial condition and for an explanation of SVC's calculation of FFO and Normalized FFO, EBITDA, EBITDAre and Adjusted EBITDAre and a reconciliation of those amounts to amounts determined in accordance with GAAP.

Comparable Hotels Data:

SVC presents RevPAR, ADR and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods. SVC generally defines comparable hotels as those that were owned by it and were open and operating for the entire periods being compared. For the three months ended March 31, 2020 and 2019, SVC excluded eight hotels from its comparable results. Three of these hotels were not owned for the entire periods, four were closed for major renovations and one suspended operations during part of the periods presented.

Minimum Rent and Return Coverage:

Hotel coverage is calculated as total hotel revenues minus all hotel expenses and FF&E reserve escrows that are not subordinated to minimum returns due to SVC divided by the minimum returns or rents due to SVC.

SVC defines net lease coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to SVC weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period reported based on the most recent operating information, if any, furnished by the tenant. Tenants that do not report operating information are excluded from the coverage calculations.

SERVICE PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended
March 31,

 

 

2020

 

2019

Revenues:

 

 

 

 

Hotel operating revenues (1)

 

$

 

383,503

 

 

$

 

454,863

 

Rental income (2)

 

 

100,072

 

 

 

68,673

 

FF&E reserve income (3)

 

 

201

 

 

 

1,372

 

Total revenues

 

 

483,776

 

 

 

524,908

 

 

 

 

 

 

Expenses:

 

 

 

 

Hotel operating expenses (1)

 

 

271,148

 

 

 

317,685

 

Other operating expenses

 

 

3,759

 

 

 

1,440

 

Depreciation and amortization

 

 

127,926

 

 

 

99,365

 

General and administrative (4)

 

 

14,024

 

 

 

12,235

 

Loss on asset impairment (5)

 

 

16,740

 

 

?

 

Total expenses

 

 

433,597

 

 

 

430,725

 

 

 

 

 

 

Gain (loss) on sale of real estate (6)

 

 

(6,911

)

 

 

159,535

 

Dividend income

 

?

 

 

 

876

 

Unrealized gains (losses) on equity securities, net (7)

 

 

(5,045

)

 

 

20,977

 

Interest income

 

 

262

 

 

 

637

 

Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $3,288 and $2,570 respectively)

 

 

(71,075

)

 

 

(49,766

)

Income (loss) before income taxes and equity in earnings (losses) of an investee

 

 

(32,590

)

 

 

226,442

 

Income tax expense

 

 

(342

)

 

 

(1,059

)

Equity in earnings (losses) of an investee (8)

 

 

(718

)

 

 

404

 

Net income (loss)

 

$

 

(33,650

)

 

$

 

225,787

 

 

 

 

 

 

Weighted average common shares outstanding (basic)

 

 

164,370

 

 

 

164,278

 

Weighted average common shares outstanding (diluted)

 

 

164,370

 

 

 

164,322

 

 

 

 

 

 

Net income (loss) per common share (basic and diluted)

 

$

 

(0.20

)

 

$

 

1.37

 

See Notes on pages 11 and 12

SERVICE PROPERTIES TRUST

RECONCILIATIONS OF FUNDS FROM OPERATIONS,

NORMALIZED FUNDS FROM OPERATIONS, EBITDA, EBITDAre AND ADJUSTED EBITDAre

(amounts in thousands, except per share data)

(Unaudited)

   

 

 

Three Months Ended
March 31,

 

 

2020

 

2019

Calculation of FFO and Normalized FFO: (9)

 

 

 

 

Net income (loss)

 

$

 

(33,650

)

 

$

 

225,787

 

Add (Less): Depreciation and amortization

 

 

127,926

 

 

 

99,365

 

(Gain) loss on sale of real estate (6)

 

 

6,911

 

 

 

(159,535

)

Loss on asset impairment (5)

 

 

16,740

 

 

?

 

Unrealized (gains) losses on equity securities, net (7)

 

 

5,045

 

 

 

(20,977

)

Adjustments to reflect the entity's share of FFO attributable to an investee (8)

 

 

112

 

 

?

 

FFO and Normalized FFO

 

 

123,084

 

 

 

144,640

 

 

 

 

 

 

Weighted average common shares outstanding (basic)

 

 

164,370

 

 

 

164,278

 

Weighted average common shares outstanding (diluted)

 

 

164,370

 

 

 

164,322

 

 

 

 

 

 

Basic and diluted per common share amounts:

 

 

 

 

FFO and Normalized FFO

 

$

 

0.75

 

 

$

 

0.88

 

Distributions declared per share

 

$

 

0.54

 

 

$

 

0.53

 

 

 

Three Months Ended
March 31,

 

 

2020

 

2019

Calculation of EBITDA, EBITDAre and Adjusted EBITDAre: (10)

 

 

 

 

Net income (loss)

 

$

 

(33,650

)

 

$

 

225,787

 

Add (Less): Interest expense

 

 

71,075

 

 

 

49,766

 

Income tax expense

 

 

342

 

 

 

1,059

 

Depreciation and amortization

 

 

127,926

 

 

 

99,365

 

EBITDA

 

 

165,693

 

 

 

375,977

 

Add (Less): (Gain) loss on sale of real estate (6)

 

 

6,911

 

 

 

(159,535

)

Loss on asset impairment (5)

 

 

16,740

 

 

?

 

EBITDAre

 

 

189,344

 

 

 

216,442

 

Add (Less): General and administrative expense paid in common shares (11)

 

 

590

 

 

 

436

 

Adjustments to reflect the entity's share of EBITDA attributable to an investee (8)

 

 

158

 

 

?

 

Unrealized (gains) losses on equity securities, net (7)

 

 

5,045

 

 

 

(20,977

)

Adjusted EBITDAre

 

$

 

195,137

 

 

$

 

195,901

 

See Notes on pages 11 and 12

(1)  

As of March 31, 2020, SVC owned 329 hotels; 328 of these hotels were managed by hotel operating companies and one hotel was leased to a hotel operating company. As of March 31, 2020, SVC also owned 813 net lease properties. SVC's condensed consolidated statements of income include hotel operating revenues and expenses of managed hotels and rental income and other operating expenses from its leased hotel and net lease properties. Certain of SVC's managed hotels had net operating results that were, in the aggregate, $118,064 and $42,839 less than the minimum returns due to SVC for the three months ended March 31, 2020 and 2019, respectively. When managers of these hotels are required to fund the shortfalls under the terms of SVC's management agreements or their guarantees, SVC reflects such fundings (including security deposit applications) in its condensed consolidated statements of income as a reduction of hotel operating expenses. The reduction to hotel operating expenses was $75,927 and $22,465 for the three months ended March 31, 2020 and 2019, respectively. When SVC reduces the amounts of the security deposit it holds for any of its operating agreements for payment deficiencies, it does not result in additional cash flows to SVC of the deficiency amounts, but reduces the refunds due to the respective tenants or managers who have provided SVC with these deposits upon expiration of the applicable operating agreement. The security deposits are non-interest bearing and are not held in escrow. SVC had shortfalls at certain of its managed hotel portfolios not funded by the managers of these hotels under the terms of its management agreements of $47,755 and $20,676 for the three months ended March 31, 2020 and 2019, respectively, which represent the unguaranteed portions of SVC's minimum returns from its Sonesta and Wyndham agreements. The net operating results of SVC's managed hotel portfolios did not exceed the minimum returns due to SVC for either of the three months ended March 31, 2020 or 2019. Certain of SVC's guarantees and its security deposits may be replenished by a share of future cash flows from the applicable hotel operations in excess of the minimum returns due to SVC, certain fees to the manager, or working capital advances, if any, pursuant to the terms of the applicable agreements. When SVC's guarantees and security deposits are replenished by cash flows from hotel operations, SVC reflects such replenishments in its condensed consolidated statements of income as an increase to hotel operating expenses. There were no such replenishments for the either of the three months ended March 31, 2020 or 2019.

 

(2)   

SVC reduced rental income by $3,543 and $1,132 in the three months ended March 31, 2020 and 2019 respectively, to record scheduled rent changes under certain of SVC's leases, the deferred rent obligations under SVC's leases with TA and the estimated future payments to SVC under its leases with TA for the cost of removing underground storage tanks on a straight-line basis.

 

(3)

 

Various percentages of total sales at certain of SVC's hotels are escrowed as reserves for future renovations or refurbishments, or FF&E reserve escrows. SVC owns all the FF&E reserve escrows for its hotels. SVC reports deposits by its tenants into the escrow accounts under its hotel leases as FF&E reserve income. SVC does not report the amounts which are escrowed as FF&E reserves for its managed hotels as FF&E reserve income.

(4) 

 

Incentive fees under SVC's business management agreement with The RMR Group LLC are payable after the end of each calendar year, are calculated based on common share total return, as defined, and are included in general and administrative expense in SVC's condensed consolidated statements of income. In calculating net income (loss) in accordance with GAAP, SVC recognizes estimated business management incentive fee expense, if any, in the first, second and third quarters. Although SVC recognizes this expense, if any, in the first, second and third quarters for purposes of calculating net income (loss), SVC does not include these amounts in the calculation of Normalized FFO or Adjusted EBITDAre until the fourth quarter, which is when the business management incentive fee expense amount for the year, if any, is determined. No business management incentive fee expense was recorded for the three months ended March 31, 2020 or 2019.

(5)

 

SVC recorded a $16,740 loss on asset impairment during the three months ended March 31, 2020 to reduce the carrying value of two net lease properties to their estimated fair value.

(6)

 

SVC recorded a $6,911 net loss on sale of real estate during the three months ended March 31, 2020 in connection with the sales of six net lease properties and a $159,535 gain on sale of real estate during the three months ended March 31, 2019 in connection with the sales of 20 travel centers.

(7)

 

Unrealized gains (losses) on equity securities, net represents the adjustment required to adjust the carrying value of SVC's former investment in RMR Inc. common stock and its investment in TA common shares to their fair value. SVC sold its RMR Inc. shares on July 1, 2019.

(8)

 

Represents SVC's proportionate share of its equity investment in Sonesta during the three months ended March 31, 2020 and Affiliates Insurance Company during the three months ended March 31, 2019.

(9) 

 

SVC calculates FFO and Normalized FFO as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of properties and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, less any unrealized gains and losses on equity securities, as well as certain other adjustments currently not applicable to SVC. In calculating Normalized FFO, SVC adjusts for the item shown above and includes business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of SVC's core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. FFO and Normalized FFO are among the factors considered by SVC's Board of Trustees when determining the amount of distributions to its shareholders. Other factors include, but are not limited to, requirements to maintain SVC's qualification for taxation as a REIT, limitations in its credit agreement and public debt covenants, the availability to SVC of debt and equity capital, SVC's distribution rate as a percentage of the trading price of its common shares, or dividend yield, and to the dividend yield of other REITs, SVC's expectation of its future capital requirements and operating performance, and SVC's expected needs for and availability of cash to pay its obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than SVC does.

(10) 

 

SVC calculates EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown above. EBITDAre is calculated on the basis defined by Nareit which is EBITDA, excluding gains and losses on the sale of real estate, loss on impairment of real estate assets, if any, as well as certain other adjustments currently not applicable to SVC. In calculating Adjusted EBITDAre, SVC adjusts for the items shown above and includes business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of SVC's core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than SVC does.

(11)

 

Amounts represent the equity compensation for SVC's Trustees, its officers and certain other employees of SVC's manager.

SERVICE PROPERTIES TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(Unaudited)

 

 

 

March 31, 2020

 

December 31, 2019

ASSETS

 

 

 

 

Real estate properties:

 

 

 

 

Land

 

$

 

2,068,645

 

 

$

 

2,066,602

 

Buildings, improvements and equipment

 

 

9,376,243

 

 

 

9,318,434

 

Total real estate properties, gross

 

 

11,444,888

 

 

 

11,385,036

 

Accumulated depreciation

 

 

(3,210,219

)

 

 

(3,120,761

)

Total real estate properties, net

 

 

8,234,669

 

 

 

8,264,275

 

Acquired real estate leases and other intangibles

 

 

364,397

 

 

 

378,218

 

Assets held for sale

 

 

56,688

 

 

 

87,493

 

Cash and cash equivalents

 

 

55,218

 

 

 

27,633

 

Restricted cash

 

 

44,537

 

 

 

53,626

 

Due from related persons

 

 

65,109

 

 

 

68,653

 

Other assets, net

 

 

176,005

 

 

 

154,069

 

Total assets

 

$

 

8,996,623

 

 

$

 

9,033,967

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

Unsecured revolving credit facility

 

$

 

457,000

 

 

$

 

377,000

 

Unsecured term loan, net

 

 

398,038

 

 

 

397,889

 

Senior unsecured notes, net

 

 

5,290,396

 

 

 

5,287,658

 

Security deposits

 

 

47,094

 

 

 

109,403

 

Accounts payable and other liabilities

 

 

402,736

 

 

 

335,696

 

Due to related persons

 

 

17,447

 

 

 

20,443

 

Dividend payable

 

 

1,646

 

 

?

 

Total liabilities

 

 

6,614,357

 

 

 

6,528,089

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 164,566,397 and 164,563,034 shares issued and outstanding, respectively

 

 

1,646

 

 

 

1,646

 

Additional paid in capital

 

 

4,548,076

 

 

 

4,547,529

 

Cumulative net income available for common shareholders

 

 

3,457,995

 

 

 

3,491,645

 

Cumulative common distributions

 

 

(5,625,451

)

 

 

(5,534,942

)

Total shareholders' equity

 

 

2,382,266

 

 

 

2,505,878

 

Total liabilities and shareholders' equity

 

$

 

8,996,623

 

 

$

 

9,033,967

 

Warning Concerning Forward-Looking Statements

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever SVC uses words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "will," "may" and negatives or derivatives of these or similar expressions, SVC is making forward-looking statements. These forward-looking statements are based upon SVC's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by SVC's forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond SVC's control. For example:

The information contained in SVC's filings with the SEC, including under the caption "Risk Factors" in SVC's periodic reports, or incorporated therein, identifies other important factors that could cause differences from SVC's forward-looking statements. SVC's filings with the SEC are available on the SEC's website at www.sec.gov.

You should not place undue reliance upon forward-looking statements.

Except as required by law, SVC does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.


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