2022 Q1 Form 10-Q Financial Statement

#000094539422000029 Filed on May 04, 2022

View on sec.gov

Income Statement

Concept 2022 Q1 2021 Q1
Revenue $393.8M $261.2M
YoY Change 50.77% -46.01%
Cost Of Revenue $290.3M $215.0M
YoY Change 35.04% -20.71%
Gross Profit $103.4M $46.20M
YoY Change 123.85% -78.27%
Gross Profit Margin 26.26% 17.69%
Selling, General & Admin $11.99M $12.70M
YoY Change -5.6% -9.29%
% of Gross Profit 11.59% 27.49%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $104.1M $124.4M
YoY Change -16.29% -2.78%
% of Gross Profit 100.67% 269.19%
Operating Expenses $118.4M $140.4M
YoY Change -15.69% -3.7%
Operating Profit -$14.95M -$94.20M
YoY Change -84.13% -240.96%
Interest Expense $92.34M $89.39M
YoY Change 3.3% 25.77%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$118.4M -$191.3M
YoY Change -38.1% 486.97%
Income Tax $695.0K $853.0K
% Of Pretax Income
Net Earnings -$119.8M -$195.0M
YoY Change -38.55% 479.47%
Net Earnings / Revenue -30.43% -74.66%
Basic Earnings Per Share -$0.73 -$1.19
Diluted Earnings Per Share -$0.73 -$1.19
COMMON SHARES
Basic Shares Outstanding 164.7M shares 164.5M shares
Diluted Shares Outstanding 164.7M shares 164.5M shares

Balance Sheet

Concept 2022 Q1 2021 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $969.6M $874.5M
YoY Change 10.88% 1484.24%
Cash & Equivalents $969.6M $874.5M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables $44.43M $52.60M
Other Receivables $28.25M $17.70M
Total Short-Term Assets $1.042B $944.8M
YoY Change 10.32% 685.37%
LONG-TERM ASSETS
Property, Plant & Equipment $6.878B $7.813B
YoY Change -11.97% -5.12%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $61.97M
YoY Change
Other Assets $455.1M $18.90M
YoY Change 2307.74% -81.32%
Total Long-Term Assets $7.975B $8.570B
YoY Change -6.94% -3.45%
TOTAL ASSETS
Total Short-Term Assets $1.042B $944.8M
Total Long-Term Assets $7.975B $8.570B
Total Assets $9.017B $9.515B
YoY Change -5.23% 5.76%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $436.5M $474.6M
YoY Change -8.02% 12.95%
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $436.5M $474.6M
YoY Change -8.02% 1.22%
LONG-TERM LIABILITIES
Long-Term Debt $7.146B $7.133B
YoY Change 0.18% 16.08%
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $7.146B $7.133B
YoY Change 0.18% 16.08%
TOTAL LIABILITIES
Total Short-Term Liabilities $436.5M $474.6M
Total Long-Term Liabilities $7.146B $7.133B
Total Liabilities $7.583B $7.608B
YoY Change -0.33% 15.02%
SHAREHOLDERS EQUITY
Retained Earnings $2.516B $2.985B
YoY Change -15.73% -13.67%
Common Stock $1.651M $1.648M
YoY Change 0.18% 0.12%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.434B $1.907B
YoY Change
Total Liabilities & Shareholders Equity $9.017B $9.515B
YoY Change -5.23% 5.76%

Cashflow Statement

Concept 2022 Q1 2021 Q1
OPERATING ACTIVITIES
Net Income -$119.8M -$195.0M
YoY Change -38.55% 479.47%
Depreciation, Depletion And Amortization $104.1M $124.4M
YoY Change -16.29% -2.78%
Cash From Operating Activities -$11.98M -$62.72M
YoY Change -80.9% -164.65%
INVESTING ACTIVITIES
Capital Expenditures -$26.56M -$29.50M
YoY Change -9.96% -23.38%
Acquisitions
YoY Change
Other Investing Activities $65.43M -$39.30M
YoY Change -266.49% 25.96%
Cash From Investing Activities $38.87M -$68.81M
YoY Change -156.49% -1.16%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00
YoY Change -100.0%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$1.733M $919.6M
YoY Change -100.19% -10425.9%
NET CHANGE
Cash From Operating Activities -$11.98M -$62.72M
Cash From Investing Activities $38.87M -$68.81M
Cash From Financing Activities -$1.733M $919.6M
Net Change In Cash $25.15M $788.1M
YoY Change -96.81% 4160.89%
FREE CASH FLOW
Cash From Operating Activities -$11.98M -$62.72M
Capital Expenditures -$26.56M -$29.50M
Free Cash Flow $14.58M -$33.22M
YoY Change -143.88% -124.52%

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CY2022Q1 us-gaap Use Of Estimates
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The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets, impairment of real estate and related intangibles.
CY2022Q1 us-gaap Straight Line Rent Adjustments
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CY2021Q1 us-gaap Straight Line Rent Adjustments
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<div style="margin-bottom:10pt;margin-top:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%;text-decoration:underline">Note 9. Business and Property Management Agreements with RMR</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%;text-decoration:underline"> </span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, excluding properties leased to TA, the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR to manage from time to time.</span></div><div style="text-indent:18pt"><span><br/></span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We recognized net business management fees payable to RMR of $9,878 and $10,299 for the three months ended March 31, 2022 and 2021, respectively. Based on our common share total return, as defined in our business management agreement, as of each of March 31, 2022 and 2021, no incentive fees are included in the net business management fees we recognized for the three months ended March 31, 2022 or 2021. The actual amount of annual incentive fees for 2022, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2022, and will be payable in January 2023. We did not incur an incentive fee payable to RMR for the year ended December 31, 2021. We include business management fee amounts in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). </span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We and RMR amended our business management agreement effective August 1, 2021 to provide that (i) for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Hotel &amp; Resort REIT Index will be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR, and (ii) for periods prior to August 1, 2021, the SNL U.S. REIT Hotel Index will continue to be used. This change of index was due to S&amp;P Global, Inc. ceasing to publish the SNL U.S. REIT Hotel Index.</span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We recognized property management and construction supervision fees payable to RMR of $1,663 and $804 for the three months ended March 31, 2022 and 2021, respectively. Of those amounts, for the three months ended March 31, 2022 and 2021, $1,018 and $802, respectively, of property management fees were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $645 and $2, respectively, of construction and supervision fees were capitalized for the three months ended March 31, 2022 and 2021. The amounts capitalized are included in building, improvements and equipment in our condensed consolidated balance sheets and are being depreciated over the estimated useful lives of the related capital assets. </span></div><div style="text-indent:18pt"><span><br/></span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR employees assigned to work exclusively or partly at our net lease properties, our share of the wages, benefits and other related costs of RMR's centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, and as otherwise agreed. We reimbursed RMR $764 and $744 for these expenses and costs for the three months ended March 31, 2022 and 2021, respectively. We included these amounts in other operating expenses and selling, general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).</span></div><div style="text-indent:18pt"><span><br/></span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 22, 2021, we and RMR amended our property management agreement to, among other things, provide for RMR's oversight of any major capital projects and repositioning activities at our hotels, including our hotels that are managed by Sonesta, as we may request from time to time. RMR will receive the same fee previously paid to Sonesta for these services, which is equal to 3% of the cost of any such major capital project or repositioning activity.</span></div>
CY2022Q1 dei Entity Number Of Employees
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CurrentForeignTaxExpenseBenefit
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2 segment
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297406000 USD
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96358000 USD
CY2022Q1 us-gaap Revenues
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393764000 USD
CY2022Q1 us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
CostOfGoodsAndServiceExcludingDepreciationDepletionAndAmortization
290343000 USD
CY2022Q1 us-gaap Other Cost And Expense Operating
OtherCostAndExpenseOperating
2269000 USD
CY2022Q1 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
104113000 USD
CY2022Q1 us-gaap General And Administrative Expense
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11989000 USD
CY2022Q1 us-gaap Business Combination Acquisition Related Costs
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1177000 USD
CY2022Q1 us-gaap Asset Impairment Charges
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5500000 USD
CY2022Q1 us-gaap Costs And Expenses
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415391000 USD
CY2022Q1 us-gaap Gain Loss On Sale Of Properties
GainLossOnSaleOfProperties
5548000 USD
CY2022Q1 us-gaap Equity Securities Fv Ni Unrealized Gain Loss
EquitySecuritiesFvNiUnrealizedGainLoss
-10260000 USD
CY2022Q1 us-gaap Interest And Other Income
InterestAndOtherIncome
273000 USD
CY2022Q1 us-gaap Interest Expense
InterestExpense
92344000 USD
CY2022Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-118410000 USD
CY2022Q1 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
695000 USD
CY2022Q1 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
-717000 USD
CY2022Q1 us-gaap Net Income Loss
NetIncomeLoss
-119822000 USD
CY2022Q1 us-gaap Assets
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9017072000 USD
CY2021Q1 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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168953000 USD
CY2021Q1 us-gaap Operating Lease Lease Income Lease Payments
OperatingLeaseLeaseIncomeLeasePayments
92217000 USD
CY2021Q1 us-gaap Revenues
Revenues
261170000 USD
CY2021Q1 us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
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195352000 USD
CY2021Q1 us-gaap Other Cost And Expense Operating
OtherCostAndExpenseOperating
3417000 USD
CY2021Q1 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
124368000 USD
CY2021Q1 us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
12657000 USD
CY2021Q1 us-gaap Business Combination Acquisition Related Costs
BusinessCombinationAcquisitionRelatedCosts
19635000 USD
CY2021Q1 us-gaap Asset Impairment Charges
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1211000 USD
CY2021Q1 us-gaap Costs And Expenses
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356640000 USD
CY2021Q1 us-gaap Gain Loss On Sale Of Properties
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CY2021Q1 us-gaap Equity Securities Fv Ni Unrealized Gain Loss
EquitySecuritiesFvNiUnrealizedGainLoss
-6481000 USD
CY2021Q1 us-gaap Interest And Other Income
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57000 USD
CY2021Q1 us-gaap Interest Expense
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89391000 USD
CY2021Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-191294000 USD
CY2021Q1 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
853000 USD
CY2021Q1 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
-2843000 USD
CY2021Q1 us-gaap Net Income Loss
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-194990000 USD
CY2021Q4 us-gaap Assets
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9153315000 USD

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