UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
Commission File Number 0-24568
INNKEEPERS USA TRUST
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 65-0503831
------------------------------ ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
306 ROYAL POINCIANA WAY, TELEPHONE (561) 835-1800
---------------------------------------- -----------------------------
Palm Beach, Florida 33480 (Registrant's telephone number
(Address of principal executive offices) including area code)
N/A
------------
(former name)
Indicate by check mark whether the Registrant (i) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such short period that the Registrant was
required to file such report), and (ii) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
The number of common shares of beneficial interest, $.01 par value, outstanding
on August 1, 2000, was 34,676,586.
<PAGE>
INNKEEPERS USA TRUST
INDEX
PAGE NUMBER
-----------
PART I Financial Information
Item 1. Financial Statements
INNKEEPERS USA TRUST
Consolidated Balance Sheets at June 30, 2000
(unaudited) and December 31, 1999 1
Consolidated Statements of Income for the three
and six months ended June 30, 2000 and
1999 (unaudited) 2
Consolidated Statements of Cash Flows for the six
months ended June 30, 2000 and 1999 (unaudited) 3
Notes to Consolidated Financial Statements 4
INNKEEPERS HOSPITALITY
Combined Balance Sheets at June 30, 2000
(unaudited) and December 31, 1999 6
Combined Statements of Income for the three
and six months ended June 30, 2000 and
1999 (unaudited) 7
Combined Statements of Cash Flows for the six
months ended June 30, 2000 and 1999 (unaudited) 8
Notes to Combined Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 19
Signature 20
i
<PAGE>
INNKEEPERS USA TRUST
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
--------- -----------
<S> <C> <C>
ASSETS
Investment in hotel properties:
Land and improvements $ 95,937 $ 95,891
Buildings and improvements 628,563 628,266
Furniture and equipment 103,149 102,392
Renovations in process 5,771 456
Hotels under development 7,235 4,366
--------- ---------
840,655 831,371
Accumulated depreciation (118,682) (99,487)
--------- ---------
Net investment in hotel properties 721,973 731,884
Cash and cash equivalents 7,488 4,404
Restricted cash and cash equivalents 15,339 12,272
Due from Lessees 15,417 12,484
Deferred expenses, net 4,402 3,965
Other assets 1,464 1,691
--------- ---------
Total assets $ 766,083 $ 766,700
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt $ 246,614 $ 243,875
Accounts payable and accrued expenses 7,003 6,844
Distributions payable 13,066 13,067
Deferred rent revenue 26,096 --
Minority interest in Partnership 58,111 59,457
--------- ---------
Total liabilities 350,890 323,243
--------- ---------
Shareholders' equity:
Preferred shares, $0.01 par value, 20,000,000 shares
authorized, 4,630,000 shares issued and outstanding 115,750 115,750
Common shares, $0.01 par value, 100,000,000 shares
authorized, 34,676,586 issued and outstanding 347 347
Additional paid-in capital 367,182 367,191
Unearned compensation (4,566) (5,144)
Distributions in excess of net earnings (63,520) (34,687)
--------- ---------
Total shareholders' equity 415,193 443,457
--------- ---------
Total liabilities and shareholders' equity $ 766,083 $ 766,700
--------- ---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
1
<PAGE>
INNKEEPERS USA TRUST
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- -----------------------
2000 1999 2000 1999
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Percentage Lease revenue $ 19,410 $ 29,404 $ 34,904 $ 55,210
Other revenue 386 306 763 515
-------- -------- -------- --------
Total revenue 19,796 29,710 35,667 55,725
-------- -------- -------- --------
Expenses:
Depreciation 9,587 9,380 19,195 18,092
Amortization of franchise costs 17 19 34 37
Ground rent 117 114 232 228
Interest expense 4,445 4,314 9,133 8,274
Amortization of loan origination fees 228 231 495 469
Real estate and personal property taxes and
property insurance 2,918 2,955 5,946 5,932
General and administrative 1,120 767 2,312 1,922
Amortization of unearned compensation 251 338 579 695
-------- -------- -------- --------
Total expenses 18,683 18,118 37,926 35,649
-------- -------- -------- --------
Income (loss) before minority interest 1,113 11,592 (2,259) 20,076
Minority interest, common 120 (341) 423 (546)
Minority interest, preferred (1,174) (1,174) (2,347) (2,347)
Extraordinary loss (240) -- (240) --
------- -------- -------- --------
Net income (loss) (181) 10,077 (4,423) 17,183
Preferred share dividends (2,496) (2,496) (4,992) (4,992)
-------- -------- -------- --------
Net income (loss) applicable to common shareholders $ (2,677) $ 7,581 ($ 9,415) $ 12,191
-------- -------- -------- --------
Earnings (loss) per share data:
Basic - before extraordinary loss $ (0.07) $ 0.22 $ (0.27) $ 0.36
Extraordinary loss (0.01) -- (0.01) --
-------- -------- -------- --------
Basic $ (0.08) $ 0.22 $ (0.28) $ 0.36
-------- -------- -------- --------
Diluted - before extraordinary loss $ (0.07) $ 0.22 $ (0.27) $ 0.36
Extraordinary loss (0.01) -- (0.01) --
-------- -------- -------- --------
Diluted $ (0.08) $ 0.22 $ (0.28) $ 0.36
-------- -------- -------- --------
Supplemental financial information (See Note 2): ACTUAL PROFORMA ACTUAL PROFORMA
-------- -------- -------- --------
Percentage Lease revenue $ 19,410 $ 16,402 $ 34,904 $ 30,722
Net loss $ (181) $ (2,364) $ (4,423) $ (6,255)
Net loss applicable to common shareholders $ (2,677) $ (4,860) $ (9,415) $(11,247)
Net loss per share - basic $ (0.08) $ (0.14) $ (0.28) $ (0.33)
Net loss per share - diluted $ (0.08) $ (0.14) $ (0.28) $ (0.33)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
2
<PAGE>
INNKEEPERS USA TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------
2000 1999
(UNAUDITED) (UNAUDITED)
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (4,423) $ 17,183
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 20,303 19,293
Minority interests 1,924 2,893
Deferred rent revenue 26,096 --
Extraordinary loss 240 --
Changes in operating assets and liabilities:
Due from Lessees (2,933) (3,375)
Other assets 227 (32)
Accounts payable and accrued expenses 159 1,666
-------- --------
Net cash provided by operating activities 41,593 37,628
-------- --------
Cash flows from investing activities:
Investment in hotel properties (9,284) (57,957)
Net deposits into restricted cash accounts (3,067) (535)
-------- --------
Net cash used in investing activities (12,351) (58,492)
-------- --------
Cash flows from financing activities:
Proceeds from debt issuance 11,000 55,500
Payments on debt (8,261) (5,303)
Dividend reinvestment plan and shelf registration costs paid (10) (135)
Distributions paid to unit holders (3,220) (3,210)
Distributions paid to shareholders (24,410) (24,373)
Redemption of units (51) (27)
Loan origination fees and costs paid (1,206) (228)
-------- --------
Net cash provided (used) by financing activities (26,158) 22,224
-------- --------
Net increase in cash and cash equivalents 3,084 1,360
Cash and cash equivalents at beginning of period 4,404 2,642
-------- --------
Cash and cash equivalents at end of period $ 7,488 $ 4,002
-------- --------
Supplemental cash flow information:
Interest paid $ 9,245 $ 7,601
-------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
3
<PAGE>
INNKEEPERS USA TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Innkeepers USA Trust ("Innkeepers") is a self-administered real estate
investment trust ("REIT"), which at June 30, 2000 owned interests in 67 hotels
with an aggregate of 8,137 rooms/suites (the "Hotels") through its interests in
Innkeepers USA Limited Partnership (with its subsidiary partnerships, the
"Partnership" and collectively with Innkeepers, the "Company"). The Hotels are
comprised of 44 Residence Inn by Marriott hotels, 12 Hampton Inn hotels, six
Summerfield Suites hotels, one TownePlace Suites by Marriott hotel, one Comfort
Inn hotel, one Courtyard by Marriott hotel, one Holiday Inn Express hotel and
one Sunrise Suites hotel. The Hotels are located in 23 states, with 11 hotels
located in California, 5 each in Florida, Washington and Michigan, and 4 each in
Texas, Illinois and Pennsylvania.
The Company leases 60 of the Hotels to Innkeepers Hospitality, Inc. (or
other entities under common ownership, collectively the "IH Lessee") and seven
of the Hotels to affiliates of Wyndham International, Inc. (the "Summerfield
Lessee" and collectively with the IH Lessee, the "Lessees") pursuant to leases
which provide for rent based on the room revenues of the Hotels ("Percentage
Leases"). An officer of the Company is the majority shareholder of the IH Lessee
and a trustee of the Company is a director of the Summerfield Lessee.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC") and
should be read in conjunction with the financial statements and notes thereto of
the Company and the IH Lessee included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 (the "10-K"). The notes to the
financial statements included herein highlight significant changes to the notes
included in the 10-K and present interim disclosures required by the SEC. In the
opinion of management, all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation have been included. The results of
any interim period are not necessarily indicative of results for the full year.
2. CHANGE IN ACCOUNTING PRINCIPLE
On December 3, 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides that a lessor shall defer recognition of
contingent rental income in interim periods until specified annual targets that
trigger the contingent income are met. The Company has reviewed the terms of its
Percentage Leases and has determined that the provisions of SAB 101 impact the
Company's revenue recognition on an interim basis, but have no impact on the
Company's annual Percentage Lease revenue recognition or interim cash flow from
its Lessees. The Company adopted the provisions of SAB 101 as a change in
accounting principle and recorded the results of the 2000 first and second
quarters in accordance with the new pronouncement. The effect of this change on
the three months ended June 30, 2000 consolidated statement of income was to
decrease total revenue by approximately $13,131,000 and net income applicable to
common shareholders by approximately $12,566,000, or $0.37 per basic and diluted
share. The proforma effect of this change on the three months ended June 30,
1999 consolidated statement of income was to decrease total revenue by
approximately $13,002,000 and net income applicable to common shareholders by
approximately $12,441,000, or $0.36 per basic and diluted share. The effect of
this change on the six months ended June 30, 2000 consolidated statement of
income was to decrease total revenue by approximately $26,096,000 and net income
applicable to common shareholders by approximately $24,974,000, or $0.73 per
basic and diluted share. The proforma effect of this change on the six months
ended June 30, 1999 consolidated statement of income was to decrease total
revenue by approximately $24,488,000
4
<PAGE>
and net income applicable to common shareholders by approximately $23,438,000,
or $0.69 per basic and diluted share.
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings (loss) per share for the three and six months ended June 30, 2000 and
1999 (in thousands, except share and per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NUMERATOR:
Net income (loss) $ (181) $ 10,077 $ (4,423) $ 17,183
Preferred share dividends (2,496) (2,496) (4,992) (4,992)
------------ ------------ ------------ ------------
Net income (loss) applicable to common
shareholders (2,677) 7,581 (9,415) 12,191
Extraordinary loss 240 -- 240 --
------------ ------------ ------------ ------------
Net income (loss) applicable to common
shareholders before extraordinary loss $ (2,437) $ 7,581 $ (9,175) $ 12,191
------------ ------------ ------------ ------------
DENOMINATOR:
Denominator for basic earnings per share -
weighted average shares 34,193,485 34,070,133 34,192,968 34,067,114
Effect of dilutive securities:
Stock options 379 19,199 190 24,672
Restricted shares 31,158 78,104 15,657 76,502
------------ ------------ ------------ ------------
Denominator for diluted earnings per share -
adjusted weighted average shares and
assumed conversions 34,225,022 34,167,436 34,208,815 34,168,288
------------ ------------ ------------ ------------
EARNINGS PER SHARE DATA:
Basic - before extraordinary loss $ (0.07) $ 0.22 $ (0.27) $ 0.36
Extraordinary loss (0.01) -- $ (0.01) --
------------ ------------ ------------ ------------
Basic $ (0.08) $ 0.22 $ (0.28) $ 0.36
------------ ------------ ------------ ------------
Diluted - before extraordinary loss $ (0.07) $ 0.22 $ (0.27) $ 0.36
Extraordinary loss (0.01) -- $ (0.01) --
------------ ------------ ------------ ------------
Diluted $ (0.08) $ 0.22 $ (0.28) $ 0.36
------------ ------------ ------------ ------------
</TABLE>
The Series A Preferred Shares and most of the options granted are
anti-dilutive and not included in the calculation of diluted earnings (loss) per
share.
4. UNCERTAINTIES
In May 2000, Frederic M. Shaw, the Company's former Executive Vice
President and Chief Operating Officer, filed suit against the Company and
certain officers of the Company. The suit alleges that he was wrongfully
terminated and also alleges various other related claims against the Company.
The Company believes that the disposition of these claims will not have a
material adverse effect on the Company's results of operations or financial
position.
5
<PAGE>
INNKEEPERS HOSPITALITY
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
--------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,412 $ 17,849
Marketable securities 2,941 2,690
Accounts receivable, net 10,494 4,848
Prepaid expenses 445 538
-------- --------
Total current assets 32,292 25,925
Other assets 76 104
-------- --------
Total assets $ 32,368 $ 26,029
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,116 $ 3,734
Accrued expenses 4,647 3,879
Payable to Manager 5,625 5,159
Due to Partnership 14,708 11,735
-------- --------
Total current liabilities 30,096 24,507
Other long-term liabilities 937 937
-------- --------
Total liabilities 31,033 25,444
-------- --------
Shareholders' equity:
Common shares, $1 par value, 8,000 shares authorized,
issued and outstanding 8 8
Additional paid-in capital 290 290
Unrealized loss on marketable securities (502) (753)
Retained earnings 1,539 1,040
-------- --------
Total shareholders' equity 1,335 585
-------- --------
Total liabilities and shareholders' equity $ 32,368 $ 26,029
-------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE COMBINED FINANCIAL
STATEMENTS.
6
<PAGE>
INNKEEPERS HOSPITALITY
COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Gross operating revenue:
Rooms $ 57,644 $ 54,141 $ 109,823 $ 100,391
Food and beverage 76 41 167 54
Telephone 1,603 1,539 3,168 2,912
Other 1,037 1,035 2,015 1,926
--------- --------- --------- ---------
Gross operating revenue 60,360 56,756 115,173 105,283
Departmental expenses:
Rooms 11,639 11,548 22,372 20,708
Food and beverage 65 51 136 52
Telephone 581 529 1,036 976
Other 467 430 930 855
--------- --------- --------- ---------
Total departmental profit 47,608 44,198 90,699 82,692
--------- --------- --------- ---------
Unallocated operating expenses:
General and administrative 4,286 4,018 8,122 7,699
Franchise and marketing fees 3,484 3,232 6,656 6,167
Advertising and promotions 2,654 2,494 5,144 4,742
Utilities 1,816 1,770 3,942 3,926
Repairs and maintenance 2,481 2,086 4,721 4,268
Management fees 1,367 1,178 2,630 2,261
--------- --------- --------- ---------
Total unallocated operating expenses 16,088 14,778 31,215 29,063
--------- --------- --------- ---------
Gross profit 31,520 29,420 59,484 53,629
Insurance (324) (249) (499) (468)
Lessee overhead (856) (729) (1,950) (1,505)
Percentage lease expense (28,813) (26,459) (53,987) (48,456)
--------- --------- --------- ---------
Net income 1,527 1,983 3,048 3,200
Other comprehensive income -
unrealized gains (losses) on
marketable securities 268 154 251 (215)
--------- --------- --------- ---------
Comprehensive income $ 1,795 $ 2,137 $ 3,299 $ 2,985
--------- --------- --------- ---------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE COMBINED FINANCIAL
STATEMENTS.
7
<PAGE>
INNKEEPERS HOSPITALITY
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
SIX MONTHS ENDED
JUNE 30
-----------------------
2000 1999
(UNAUDITED) (UNAUDITED)
--------- ---------
Cash flows from operating activities:
Net income $ 3,048 $ 3,200
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 28 41
Changes in operating assets and liabilities:
Accounts receivable (5,646) (4,376)
Prepaid expenses 93 233
Accounts payable 1,382 479
Accrued expenses 768 990
Payable to Manager 466 2,022
Due to Partnership 2,973 2,996
-------- --------
Net cash provided by operating activities 3,112 5,585
-------- --------
Cash flows from investing activities:
Advances from Partnership -- 165
Purchase of marketable securities, net -- (1,103)
-------- --------
Net cash used in investing activities -- (938)
Cash flows from financing activities:
Distributions paid (2,549) (1,033)
-------- --------
Net cash used in financing activities (2,549) (1,033)
-------- --------
Net increase in cash and cash equivalents 563 3,614
Cash and cash equivalents at beginning of period 17,849 13,562
-------- --------
Cash and cash equivalents at end of period $ 18,412 $ 17,176
-------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
8
<PAGE>
INNKEEPERS HOSPITALITY
NOTES TO COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION
Innkeepers Hospitality, Inc. and other entities with identical
ownership (collectively "IH" or the "IH Lessee"), are under common control and
were formed primarily to lease and operate hotels owned by Innkeepers USA Trust
("Innkeepers") through Innkeepers USA Limited Partnership and its subsidiaries
(collectively the "Partnership," and together with Innkeepers, the "Company").
The principal shareholder of the IH Lessee is Jeffrey H. Fisher, who is the
Chairman, Chief Executive Officer and President of the Company. The IH Lessee
leased 60 hotels (the "IH Leased Hotels") from the Company at June 30, 2000.
The IH Lessee operates 31 of the Hotels, wholly-owned subsidiaries of
Marriott International, Inc. ("Marriott") operate 27 of the Hotels, and an
unaffiliated party operates two of the Hotels.
These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC") and
should be read in conjunction with the financial statements and notes thereto of
the Company and the IH Lessee included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 (the "10-K"). The notes to the
financial statements included herein highlight significant changes to the notes
included in the 10-K and present interim disclosures required by the SEC. In the
opinion of management, all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation have been included. The results of
any interim period are not necessarily indicative of results for the full year.
2. UNCERTAINTIES
In May 2000, Frederic M. Shaw, the minority shareholder of the IH
Lessee and the IH Lessee's former President, filed suit against the IH Lessee,
Mr. Fisher and another employee of the IH Lessee. The suit alleges that he was
wrongfully terminated and also alleges various other related claims against the
IH Lessee. The IH Lessee believes that the disposition of the claims will not
have a material adverse effect on the IH Lessee's results of operations or
financial position.
9
<PAGE>
INNKEEPERS USA TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the consolidated financial statements and related notes thereto
of Innkeepers USA Trust included in its Annual Report on Form 10-K for the year
ending December 31, 1999.
GENERAL
For background information relating to the Company and the IH Lessee and the
definitions of certain capitalized terms used herein, reference is made to the
notes to the Consolidated Financial Statements of Innkeepers USA Trust and the
Combined Financial Statements of Innkeepers Hospitality included in the
Company's Annual Report on Form 10-K for the year ending December 31, 1999.
THE HOTELS
The following chart sets forth certain information with respect to the Hotels at
June 30, 2000:
NUMBER OF NUMBER OF
FRANCHISE AFFILIATION HOTELS ROOMS/SUITES
----------------------------------- --------- ------------
UPSCALE EXTENDED-STAY
Residence Inn by Marriott 44 5,194
Summerfield Suites 6 759
Sunrise Suites 1 96
----- -----
51 6,049
----- -----
UPSCALE
Courtyard by Marriott 1 136
----- -----
LIMITED SERVICE
Hampton Inn 12 1,526
TownePlace Suites by Marriott 1 95
Comfort Inn 1 127
Holiday Inn Express 1 204
----- -----
15 1,952
----- -----
67 8,137
----- -----
Average daily rate ("ADR"), occupancy and revenue per available room ("RevPAR")
for the Hotels are presented in the following table. No assurance can be given
that the trends reflected in the following table will continue or that
occupancy, ADR and RevPAR will not decrease due to changes in national or local
economic, hospitality or other industry conditions.
10
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, PERCENTAGE JUNE 30, PERCENTAGE
---------------------- INCREASE ---------------------- INCREASE
2000 1999 (DECREASE) 2000 1999 (DECREASE)
---------- --------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PORTFOLIO (1)
---------------------------------
ADR $ 106.37 $ 100.79 5.5% $ 105.87 $ 100.29 5.6%
Occupancy 83.6% 81.3% 2.8 80.1% 79.6% 0.6
RevPAR $ 88.91 $ 81.95 8.5 $ 84.75 $ 79.84 6.2
BY TYPE
--------------------------------
Upscale Extended Stay Hotels (2)
ADR $ 112.32 $ 106.61 5.4 $ 111.02 $ 105.55 5.2
Occupancy 86.3% 84.0% 2.8 83.4% 82.7% 0.7
RevPAR $ 96.91 $ 89.50 8.3 $ 92.54 $ 87.33 6.0
Limited Service Hotels (3)
ADR $ 86.12 $ 80.83 6.6 $ 86.96 $ 81.06 7.3
Occupancy 75.4% 73.9% 2.1 69.7% 70.2% (0.6)
RevPAR $ 64.93 $ 59.70 8.8 $ 60.64 $ 56.88 6.6
</TABLE>
(1) 67 hotels
(2) 51 hotels
(3) 15 hotels
RESULTS OF OPERATIONS
ADOPTION OF SAB 101
On December 3, 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides that a lessor shall defer recognition of
contingent rental income in interim periods until specified annual targets that
trigger the contingent income are met. The Company has reviewed the terms of its
Percentage Leases and has determined that the provisions of SAB 101 will impact
the Company's revenue recognition on an interim basis, but has no impact on the
Company's annual Percentage Lease revenue recognition or interim cash flow from
its Lessees.
The Company's Percentage Leases provide for rent equal to the greater of (i)
fixed annual base rent or (ii) rent based on percentages of annual room revenues
at each of the hotels ("Percentage Rent"). The Company's Percentage Leases are
structured to provide Percentage Rent equal to a certain percentage (generally
30%) of a specified level of room revenues which is expressed on an annual basis
(the "Threshold"), and a certain higher percentage (generally 68%) of room
revenues in excess of the Threshold. Prior to SAB 101 the Company, in accordance
with industry practice, recognized Percentage Lease revenue in interim periods
equal to Percentage Rent payments due under the Percentage Leases. Under the
terms of the Percentage Leases, Percentage Rent payments are calculated by
applying the percentage rent formula to year-to-date room revenue using a
prorated portion of the Threshold (i.e., 25% for the first quarter, 50% for the
second quarter, etc.). Thus, "higher tier" percentage rent was recognized as
income, and collected from the Company's Lessees, in interim periods before room
revenues exceeded the Threshold. SAB 101 clarifies that meeting the Threshold is
a contingency that must be met before higher tier percentage rent can be
recognized as current income. This will generally result in base rent being
recognized as revenue in the first and second quarters and Percentage Rents
already collected or due from the Lessees being deferred and recognized as
revenue in the
11
<PAGE>
third and/or fourth quarters. The adoption of SAB 101 has no effect on the
amount or timing of the Percentage Rent payments due under the Percentage
Leases.
The Company adopted the provisions of SAB 101 as a change in accounting
principle and recorded the results of the 2000 first and second quarters in
accordance with the new pronouncement. The effect of the change (as reflected in
Note 2 to the financial statements) on the three months ending June 30, 2000 and
1999 was to decrease: Percentage Lease revenue by $13,131,000 and $13,002,000,
respectively; net income applicable to common shareholders by $12,566,000 and
$12,441,000, respectively; and net income applicable to common shareholders by
$0.37 and $0.36 per basic and diluted share, respectively.
At June 30, 2000, the Company has recorded a liability for "deferred rent
revenue" of $26,096,000, representing Percentage Rent collected or due from the
Lessees under the terms of the Percentage Leases that the Company expects to
recognize as Percentage Lease revenue in the third and/or fourth quarters of
2000. The Company's quarterly distributions are based on Percentage Rent
collected or due from the Lessees as opposed to Percentage Lease revenue
recognized.
For comparability purposes only, assuming that the amount included in deferred
rent revenue at June 30, 2000 was earned at June 30, 2000, the Company would
have had Percentage Lease revenue of $61,000,000 from the Lessees in 2000
compared with $55,210,000 for 1999. This increase is due primarily to the RevPAR
growth of approximately 8.5% at the Hotels.
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2000 ("2000") TO THE THREE MONTHS
ENDED JUNE 30, 1999 ("1999")
The decrease in Percentage Lease revenue for 2000 from 1999 is attributable to
the adoption of SAB 101 as of January 1, 2000. Included in deferred rent revenue
at June 30, 2000 is $13,131,000 of second quarter Percentage Rent and
$12,965,000 of first quarter Percentage Rent collected or due from the Lessees,
which management expects the Company to recognize as Percentage Lease revenue in
the third and/or fourth quarters of 2000.
Depreciation, amortization of franchise costs, amortization of loan origination
fees, and amortization of unearned compensation ("Depreciation and
Amortization") were $10,083,000 in the aggregate for 2000 compared with
$9,968,000 for 1999. The increase in Depreciation and Amortization was primarily
due to the depreciation of renovations completed at the Hotels during 1999.
Real estate and personal property taxes and property insurance remained
relatively constant in 2000 compared with 1999, $2,918,000 and $2,955,000,
respectively.
Interest expense for 2000 was $4,445,000 compared with $4,314,000 for 1999. This
increase is due primarily to increases in the interest rates on the Company's
variable rate debt.
General and administrative expenses increased from $767,000 in 1999 to
$1,120,000 in 2000. This increase is due primarily to the accrual of legal costs
related to the litigation with the Company's former Chief Operating Officer.
Net income (loss) applicable to common shareholders for 2000 was $(2,677,000),
or $(0.08) per diluted share, compared with $7,581,000, or $0.22 per diluted
share, for 1999. This change is due primarily to the factors discussed
previously.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2000 ("2000") TO THE SIX MONTHS
ENDED JUNE 30, 1999 ("1999")
12
<PAGE>
The decrease in Percentage Lease revenue for 2000 from 1999 is attributable to
the adoption of SAB 101 as of January 1, 2000. Included in deferred rent revenue
at June 30, 2000 is $26,096,000 of first and second quarter Percentage Rent
collected or due from the Lessees, which management expects the Company to
recognize as Percentage Lease revenue in the third and/or fourth quarters of
2000.
Depreciation and Amortization were $20,303,000 in the aggregate for 2000
compared with $19,293,000 for 1999. The increase in Depreciation and
Amortization was primarily due to the depreciation of renovations completed at
the Hotels during 1999.
Real estate and personal property taxes and property insurance remained
relatively constant in 2000 compared with 1999, $5,946,000 and $5,932,000,
respectively.
Interest expense for 2000 was $9,133,000 compared with $8,274,000 for 1999. This
increase is due primarily to increased borrowings for hotels purchased during
1999 and increases in the interest rates on the Company's variable rate debt.
General and administrative expenses increased from $1,922,000 in 1999 to
$2,312,000 in 2000. This increase is due primarily to the accrual of legal costs
related to the litigation with the Company's former Chief Operating Officer.
Net income (loss) applicable to common shareholders for 2000 was $(9,415,000),
or $(0.28) per diluted share, compared with $12,191,000, or $0.36 per diluted
share, for 1999. This change is due primarily to the factors discussed
previously.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of liquidity is rent payments from the
Lessees under the Percentage Leases, and the Company is dependent on the Lessees
to make such payments to provide cash for debt service, distributions, capital
expenditures at its Hotels, and working capital. The Company believes that its
cash provided by operating activities will be adequate to meet most of its
liquidity needs. The Company currently expects to fund any external growth
objectives, and other additional liquidity needs, primarily by borrowing on its
Line of Credit or other facilities, exchanging equity for hotel properties and
accessing the capital markets if market conditions permit.
CASH FLOW ANALYSIS
Cash and cash equivalents (including restricted cash and cash
equivalents) at June 30, 2000 and 1999 were $22,827,000 and $11,430,000,
including approximately $7,093,000 and $3,716,000, respectively, which the
Company is required, under the Percentage Leases, to make available to the
Lessees for the replacement and refurbishment of furniture and equipment and
certain other capital expenditures. Additionally, cash and cash equivalents
included approximately $8,246,000 and $3,712,000 at June 30, 2000 and 1999,
respectively, that is held in escrow to pay for insurance, taxes, and capital
expenditures for certain Hotels.
Net cash provided by operating activities for the six months ended June
30, 2000 and 1999 was $41,593,000 and $37,628,000, respectively.
Net cash used in investing activities was $12,351,000 for the six
months ended June 30, 2000. This was comprised primarily of (a) renovations at
certain hotels of approximately $6,415,000, (b) net deposits into restricted
cash accounts of approximately $3,067,000 and (c) development costs on the
Company's project in Tyson's Corner, Virginia of approximately $2,869,000.
13
<PAGE>
Net cash used in investing activities was $58,492,000 for the six
months ended June 30, 1999. This was comprised primarily of the Company (a)
acquiring three Residence Inn by Marriott hotels located in Richmond
(Northwest), Virginia, Chicago (Rosemont), Illinois and Detroit (Livonia),
Michigan for an aggregate of approximately $41,468,000, (b) acquiring a
TownePlace Suites by Marriott hotel in Horsham, Pennsylvania for approximately
$8,000,000 and (c) renovations at certain hotels of approximately $8,950,000.
Net cash used by financing activities was $26,158,000 for the six
months ended June 30, 2000, consisting primarily of borrowings under the Line of
Credit of approximately $11,000,000, which was offset by distributions paid of
approximately $27,630,000, payments on debt of approximately $8,261,000 and loan
origination fees and costs paid of $1,206,000.
Net cash provided by financing activities was $22,224,000 for the six
months ended June 30, 1999, consisting primarily of borrowings under the Line of
Credit of $55,500,000 offset by distributions paid of $27,583,000 and payments
on debt of approximately $5,303,000.
DISTRIBUTIONS/DIVIDENDS
The Company pays regular distributions on its common shares and Common
Units and the current quarterly distribution is $0.28 per share or unit.
Quarterly preferred distributions of $0.28875 are payable on each Class B
Preferred Unit. Each Series A Preferred Share is entitled to annual dividends
equal to the greater of (i) $2.15624 per share ($0.53906 per share payable
quarterly) or (ii) the cash dividend paid or payable on the number of common
shares into which a Series A Preferred Share is then convertible. The holders of
the Common Units and Class B Preferred Units may redeem their units for cash or,
at the election of Innkeepers, common shares on a one-for-one basis. Under
federal income tax law provisions applicable to REITs, the Company is required
to distribute at least 95% of its taxable income to maintain its REIT status.
DEBT
In making future investments in hotel properties, the Company may incur
additional indebtedness. The Company may also incur indebtedness to meet
distribution requirements imposed on a REIT under the Internal Revenue Code to
the extent that working capital and cash flow from the Company's investments are
insufficient to make such distributions. The Company's Declaration of Trust
limits aggregate indebtedness to 50% of the Company's investment in hotel
properties, at cost, after giving effect to the Company's use of proceeds from
any indebtedness.
On May 8, 2000 the Company closed on an amended $130,000,000 line of
credit (the "Amended Line of Credit"). The Amended Line of Credit has terms,
conditions and covenants substantially similar to those of the Line of Credit,
except that the size of the facility has been reduced to $130,000,000 and the
maturity date has been extended to May 2003.
The following table summarizes certain information concerning the
Company's debt at June 30, 2000:
<TABLE>
<CAPTION>
<S> <C>
Investment in hotels, at cost $840,655,000
Debt 246,614,000
Percentage of debt to investment in hotels, at cost 29.3%
Percentage of fixed rate debt to total debt 76.1%
Weighted average implied interest rates on:
Fixed rate debt 7.45%
Variable rate debt 7.61%
Total debt 7.49%
14
<PAGE>
Number of hotel properties:
Collateralized 34
Unencumbered 33
</TABLE>
Certain debt coverage ratios for the Company are as follows for the
twelve months ended June 30, 2000: (a) interest coverage ratio (EBITDA divided
by interest expense) of 5.9x, (b) fixed charge coverage ratio (EBITDA divided by
fixed charges) of 2.6x, and (c) total debt to EBITDA of 2.4x. The Company
includes the following in fixed charges for purposes of calculating the fixed
charge coverage ratio: interest expense, dividends on the Series A Preferred
Shares, principal amortization and a furniture and equipment replacement reserve
calculated at 4% of room revenue at the Hotels. The Company includes rent
deferred under SAB 101 in its calculation of EBITDA.
The Company's Amended Line of Credit bears interest based on the LIBOR
rate and increases or decreases in the LIBOR rate will increase or decrease the
Company's cost of borrowings outstanding under the Amended Line of Credit. Based
on the borrowings outstanding under the Amended Line of Credit at June 30, 2000,
a 100 basis point increase in the LIBOR rate would increase annual interest
charges $490,000.
In the future, the Company may seek to increase or decrease the amount
of its credit facilities, negotiate additional credit facilities, or issue
corporate debt instruments, all in compliance with the Company's debt
limitation. Any debt incurred or issued by the Company may be secured or
unsecured, short-term or long-term, bear a fixed or variable interest rate and
may be subject to such other terms as management or the Board of Trustees of the
Company deems prudent. The Company has no interest rate hedging instrument
exposure or forward equity commitments.
OTHER
The Company has a shelf registration statement for $250,000,000 of
common shares, preferred shares or warrants to purchase shares of the Company.
The shelf registration statement was declared effective by the Securities and
Exchange Commission on April 11, 1997. The terms and conditions of the
securities issued thereunder are determined by the Company based on market
conditions at the time of issuance. Approximately $106,000,000 remains available
for issuance under the shelf registration statement.
The Percentage Leases require the Company to make available to the
Lessees an amount equal to 4.0% of room revenues from the Hotels, on a monthly
basis, for the periodic replacement or refurbishment of furniture and equipment
and certain other capital expenditures at the Hotels. The Second and Third Term
Loans require that the Company make available for such purposes, at the Hotels
collateralizing those loans, a total of 5.0% of gross revenues from such Hotels.
The Fourth Term Loan requires that the Company make available for such purposes,
at the Hotels collateralizing that loan, a total of 4.5% of room revenues from
such Hotels, subject to adjustment as defined in the loan agreement. The Company
intends to cause the expenditure of amounts in excess of such obligated amounts
if necessary to comply with the reasonable requirements of any franchise
agreement and otherwise to the extent that the Company deems such expenditures
to be in the best interests of the Company.
Management believes that the amounts required to be made available by
the Company under the Percentage Lease agreements will not be sufficient to meet
all of the planned expenditures for furniture, equipment and other capital items
at the Hotels. It is currently estimated that the Company will spend between
$25,000,000 and $28,000,000 in capital expenditures at the Hotels in the
combined periods of the year ended December 31, 2000 and the first quarter of
2001. The Company currently intends to pay for the cost of its planned capital
15
<PAGE>
improvements from undistributed cash or, to the extent that undistributed cash
is insufficient to pay such costs, from borrowings under the Amended Line of
Credit.
The Company is developing a 121-room Residence Inn by Marriott Hotel
located in Tysons Corner, Virginia. The total cost of this project is
anticipated to be approximately $14 million and completion of the project is
anticipated in the fourth quarter of 2000. This hotel is expected to be leased
by a subsidiary of the Company. The development costs are expected to be funded
through the Amended Line of Credit and available cash.
SEASONALITY OF HOTEL BUSINESS
The hotel industry is seasonal in nature. Historically, the operations
of the Hotels have generally reflected higher occupancy rates and ADR during the
second and third quarters. To the extent that cash flow from the Percentage
Leases for a quarter is insufficient to fund all of the distributions for such
quarter due to seasonal and other factors, the Company may maintain the annual
distribution rate by funding quarterly distributions with available cash or
borrowings under the Amended Line of Credit.
INFLATION
Operators of hotels, including the Lessees and any third-party managers
retained by the Lessees, generally possess the ability to adjust room rates
quickly. However, competitive pressures have limited and may in the future limit
the ability of the Lessee and any third-party managers retained by the Lessee to
raise room rates in response to inflation.
FUND FROM OPERATIONS
Funds From Operations ("FFO") is a widely used performance measure for
an equity REIT. FFO, as defined by the National Association of the Real Estate
Investment Trusts ("NAREIT"), is net income (loss) before minority interest
(determined in accordance with generally accepted accounting principals),
excluding gains (or losses) from sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. The NAREIT FFO definition allows the exclusion of extraordinary items
under generally accepted accounting principles. The Company has also made an
adjustment for rent revenue deferred under SAB 101. FFO is presented to assist
investors in analyzing the performance of the Company. The Company's method of
calculating FFO may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO (i) does not
represent cash flows from operating activities as defined by generally accepted
accounting principles, (ii) is not indicative of cash available to fund all cash
flow and liquidity needs, including its ability to make distributions, and (iii)
should not be considered as an alternative to net income (as determined in
accordance with generally accepted accounting principles) for purposes of
evaluating the Company's operating performance.
The following table presents the Company's calculations of FFO and the
denominator for FFO per share for the three and six months ended June 30, 2000
and 1999 (in thousands, except share data):
16
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income (loss) applicable to
common shareholders $ (2,677) $ 7,581 $ (9,415) $ 12,191
Minority interest, common (120) 341 (423) 546
Minority interest, preferred 1,174 1,174 2,347 2,347
Extraordinary loss 240 -- 240 --
Depreciation 9,587 9,380 19,195 18,092
Preferred share dividends 2,496 2,496 4,992 4,992
Deferred rent revenue 13,131 -- 26,096 --
------------ ------------ ------------ ------------
FFO $ 23,831 $ 20,972 $ 43,032 $ 38,168
------------ ------------ ------------ ------------
Denominator for diluted
earnings per share 34,225,022 34,167,436 34,208,815 34,168,288
Weighted average
Common Units 1,556,639 1,564,714 1,558,077 1,552,473
Preferred Units 4,063,329 4,063,329 4,063,329 4,063,329
Convertible
preferred shares 6,857,493 6,857,493 6,857,493 6,857,493
------------ ------------ ------------ ------------
Denominator for FFO
Per share 46,702,483 46,652,972 46,687,714 46,641,583
------------ ------------ ------------ ------------
</TABLE>
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, without limitation,
statements containing the words "believes," "anticipates," "expects" and words
of similar import. Such forward-looking statements relate to future events and
the future financial performance of the Company, and involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from the
results or achievements expressed or implied by such forward-looking statements.
The Company is not obligated to update any such factors or to reflect the impact
of actual future events or developments or such forward-looking statements.
17
<PAGE>
INNKEEPERS USA TRUST
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure is to changes in interest rates on
its Amended Line of Credit and debt. At June 30, 2000, the Company had total
outstanding indebtedness of approximately $246,614,000. The Company's interest
rate risk objectives are to limit the impact of interest rate fluctuations on
earnings and cash flows and to lower its overall borrowing costs. To achieve
these objectives, the Company manages its exposure to fluctuations in market
interest rates for its borrowings through the use of fixed rate debt instruments
to the extent that reasonably favorable rates are obtainable with such
arrangements. The Company may enter into derivative financial instruments such
as interest rate swaps, caps and treasury locks to mitigate its interest rate
risk on a related financial instrument or to effectively lock the interest rate
on a portion of its variable debt. The Company does not enter into derivative or
interest rate transactions for speculative purposes. At June 30, 2000, the
Company has no derivative or interest rate hedging instrument exposure.
Approximately 76.1% of the Company's outstanding debt was subject to fixed rates
with a weighted average implied interest rate of 7.45% at June 30, 2000. The
Company regularly reviews interest rate exposure on its outstanding borrowings
in an effort to minimize the risk of interest rate fluctuations.
The following table provides information about the Company's financial
instruments that are sensitive to changes in interest rates. For debt
obligations outstanding at June 30, 2000, the table presents the required
principal repayments and related weighted average interest rates by expected
maturity dates (in thousands):
<TABLE>
<CAPTION>
FAIR
2000 2001 2002 2003 2004 THEREAFTER TOTAL VALUE
------ ------ ------ ------ ------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES
Debt
Fixed rate $1,441 $6,081 $3,480 $4,577 $4,905 $167,131 $187,614 $187,614
Average interest rate 7.58% 6.32% 7.65% 7.57% 7.57% 7.48% 7.45%
Variable rate -- -- -- 49,000 -- 10,000 59,000 59,000
Average interest rate -- -- -- 8.15% -- 5.00% 7.61%
</TABLE>
The table incorporates only those exposures that exist as of June 30, 2000 and
does not consider exposures or positions which could arise after that date. As a
result, the Company's ultimate realized gain or loss with respect to interest
rate fluctuations will depend on the exposures that arise during the future
period, prevailing interest rates, and the Company's hedging strategies at that
time. There is inherent rollover risk for borrowings as they mature and are
renewed at current market rates. The extent of this risk is not quantifiable or
predictable because of the variability of future interest rates and the
Company's financing requirements.
18
<PAGE>
INNKEEPERS USA TRUST
PART II - OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders was held on May 4, 2000 for the
following purposes:
o To elect three Class III trustees to serve on the Board of Trustees
until the Annual Meeting of Shareholders in 2003 or until their
successors have been duly elected and qualified ("Proposal One"); and
o To approve an amendment to the Company's 1994 Share Incentive Plan (the
"1994 Plan") to increase the number of shares authorized for issuance
under the 1994 Plan ("Proposal Two").
Under Proposal One, shareholders voted to elect three Class III
trustees, Mr. Jeffrey H. Fisher, with 30,936,232 shares voted for Mr. Fisher
(1,525,649 votes withheld authority), Mr. Thomas J. Crocker, with 32,085,913
shares voted for Mr. Crocker (375,959 votes withheld authority), and Mr. Rolf E.
Ruhfus, with 32,084,439 shares voted for Mr. Ruhfus (377,433 votes withheld
authority).
Under Proposal Two, the shareholders approved the proposed amendment to
the 1994 Plan with 30,516,531 shares voted for, 1,712,805 voted against and
232,535 shares abstaining from voting.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit - 27.1 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K - No reports on Form 8-K were filed by the
Registrant in the three months ending June 30, 2000
19
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INNKEEPERS USA TRUST
/s/ GREGORY M. FAY
--------------------
AUGUST 3, 2000 Gregory M. Fay
Chief Accounting Officer
(Principal Accounting Officer)
20
<PAGE>
INNKEEPERS USA TRUST
Form 10-Q for the quarter ending June 30, 2000
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- ----------------------
27.1 Financial Data Schedule (for SEC use only)
21
