Hersha Hospitality Announces First Quarter 2006 Earnings; Acquires Interests in 8 Hotels Totaling 1,402 Rooms; Owned Hotels RevPAR Increases 20.5%; Owned Hotel EBITDA Margin Improves 709 Basis Points.PHILADELPHIA Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. -- Hersha Hospitality Trust (AMEX AMEX See: American Stock Exchange :HT), a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) that owns interests in 58 nationally franchised, upscale and midscale hotels, today announced earnings for the first quarter 2006. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Adjusted FFO FFO See: Funds from operations for the first quarter 2006 declined to $0.03 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share from $0.06 per diluted in the same quarter of 2005. Net loss applicable to common shareholders was ($5.1) million, or ($0.25) per diluted share compared to a net loss of ($1.0) million, or ($0.05) per diluted share in first quarter 2005. The increase in net loss on a year-over-year basis is primarily due to higher depreciation and amortization charges from growth in the Company's portfolio, dividends on the Company's Series A Preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. issued in 2005, write-offs of deferred financing costs related to the Company's new $60 million credit facility and increased interest expense. Mr. Jay H. Shah Shah is a Persian term for a monarch (ruler) that has been adopted in many other languages. This term is a Post Islamic Revolution term for monarchs in Iran which is replaced by valie faghih or Supreme Leader. , Chief Executive Officer, commented, "We followed up the success we had in 2005 with a strong start to 2006. For the first quarter, which is our seasonally weakest quarter, given our concentration of hotels in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , we grew hotel revenues by 117% and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become by 165%. Our acquisition activity during the quarter of six wholly-owned hotels and two joint-venture investments is emblematic em·blem·at·ic or em·blem·at·i·cal adj. Of, relating to, or serving as an emblem; symbolic. [French emblématique, from Medieval Latin embl of our overall strategy of placing an emphasis on buying wholly-owned core hotels and from time-to-time entering into joint-ventures that we believe will add value for shareholders." Financial Highlights for the First Quarter 2006 Consolidated hotel revenues, including revenues of hotels held for sale, increased 86% to $25.9 million for the first quarter 2006 from $13.9 million in the first quarter 2005 driven primarily by growth in room revenues and acquisitions of hotels. RevPAR RevPAR A performance metric in the hotel industry which stands for "revenue per available room." RevPAR is typically calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate. for the Company's consolidated hotels (41 hotels) increased 20.5% on a year-over-year basis to $62.73 driven by a 12.0% increase in ADR ADR - Astra Digital Radio to $97.89 and a 7.6% improvement in occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy to 64.1%. Gross operating profit margins Operating profit margin The ratio of operating profit to net sales. increased to 36.7% from 30.3% from the year ago quarter. Total EBITDA for consolidated hotels increased 155.3% to $6.7 million for the first quarter 2006. EBITDA margins for the quarter increased 709 basis points to 26.1% for consolidated hotels. On a same-store basis (27 hotels), RevPAR for the first quarter 2006 increased 10.2% on a year-over-year basis to $63.30 driven by a 4.4% increase in ADR to $97.27 and a 5.6% improvement in occupancy to 65.1%. Same-store EBITDA increased 11.8% to $4.0 million due to the increase in revenue, offset somewhat by higher utility costs, repairs and maintenance, accounting fees and payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and benefits costs. Other First Quarter 2006 Highlights --In January January: see month. , the Company closed the acquisition of the 118-room Courtyard For alternative meanings of the word "court", see: Court (disambiguation). A court or courtyard is an enclosed area, often a space enclosed by a building that is open to the sky. - Langhorne Langhorne may refer to:
1 City (1990 pop. 12,200), Jefferson co., N central Ala., an industrial suburb of Birmingham; inc. 1919. Founded (1910) by the United States Steel Corp., its steel industry has greatly declined, negatively affecting the city's economy. Inn & Suites - Bethlehem Bethlehem, city, United States Bethlehem, city (1990 pop. 71,428), Northampton and Lehigh counties, E Pa., on the Lehigh R. near Allentown and Easton; inc. as a city 1917. Local manufacturing, once dominated by the giant Bethlehem Steel Corp. , PA and the 118-room Fairfield Inn & Suites - Mt. Laurel Laurel, cities, United States Laurel. 1 Town (1990 pop. 19,438), Prince Georges co., central Md., about halfway between Washington, D.C., and Baltimore; patented in the late 1600s, inc. 1870. , NJ for total consideration of $40.5 million. --In January, Hersha Hospitality Trust received $19.5 million in development loan repayments. --In February February: see month. , the Company completed the purchase of the 120-room Courtyard - Scranton Scranton, city (1990 pop. 81,805), seat of Lackawanna co., NE Pa., in a mountain region, on the Lackawanna River; settled in the 1700s, inc. 1866. Named for George W. , PA, the 96-room Residence Inn - Tyson's Corner, VA and the 188-room Hilton Garden Inn Hilton Garden Inn is the name of a chain of hotels operated by Hilton Hotels Corporation. Hilton Garden Inns are considered to be upscale, mid-priced hotels that are designed for both business and leisure travelers. The hotel brand is similar to that of the Courtyard by Marriott brand. - JFK Airport, NY. --In February, Hersha Hospitality Trust also finalized See finalization. two joint-venture agreements. The first was for a 15% interest with an 8.5% participating preferred equity return in the 409-room Marriott Marriott has several meanings:
Hampton, since 1965 part of the Greater London outer borough of Richmond upon Thames, SE England, on the Thames River. It is the site of Hampton Court Palace, which occupies about eight acres (3. Inn - Philadelphia, PA. --In February, Hersha Hospitality Trust also reduced its equity interest in the 392-room Hilton Hil·ton , Conrad Nicholson 1887-1979. American hotel-chain organizer who acquired hotels in many American cities and in 1946 founded the Hilton Hotel Corporation. Hartford, CT from 44% to 8.8% with an 8.5% participating preferred equity return. Balance Sheet At March 31, 2006, Hersha Hospitality Trust had approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $313 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. outstanding, which included approximately $51.5 million of Trust Preferred Securities and debt on assets held for sale. The weighted average interest rate on the Company's fixed rate debt was approximately 6.71%. The weighted average life of the Company's debt was 10.5 years. Fixed rate debt, including variable rate debt hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. by interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , amounted to approximately 88.0% of total debt. At March 31, 2006, the Company's fully-diluted common shares and partnership units outstanding were a combined 23,871,640. Dividend For the first quarter 2006, Hersha Hospitality Trust declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. cash common and limited partnership unit dividends of $0.18 per common share. The Company's common dividend represents the 28th consecutive quarterly dividend at this amount since the Company's 1999 initial public offering. The Common dividend represents a yield of approximately 7.7% based upon the closing price of Hersha Hospitality Trust stock on May 9, 2006. The Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. also declared a cash dividend of $0.50 per Series A Preferred Share. Subsequent Events The Company closed on the sale of 7,497,500 common shares, receiving net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $63.5 million. The Company used or will use the proceeds to repay outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. under its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. line, to fund acquisitions and development loans and for general corporate purposes. In May, Hersha closed the acquisition of four Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New area hotels for a combined purchase price of $44 million, in two separate transactions. The first deal includes the purchase of the 112-room Holiday Inn Express Cambridge, Massachusetts This article is about the city of Cambridge in Massachusetts. For the English university town, see Cambridge, England. For other places, see Cambridge (disambiguation). Cambridge, Massachusetts is a city in the Greater Boston area of Massachusetts, United States. from an affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: company. The second deal comprises a 96-room Residence Inn in North Dartmouth, Massachusetts Dartmouth is a town in Bristol County, Massachusetts, United States established in 1664. The population was 30,666 at the 2000 census. It is the location of the University of Massachusetts Dartmouth and Southern New England School of Law. , a 100-room Hawthorn Suites Hawthorn Suites is a chain of hotels in the United States. Hawthorn Suites is among the key players in the midscale hotels category, according to CNN.com [1]. Most Hawthorn Suites offer amenities such as meeting rooms, exercise facilities, swimming pools, and a free hot in Franklin, Massachusetts The Town of Franklin is a city[1] in Norfolk County, Massachusetts, United States. The population was 29,560 at the 2000 census. History Franklin was first settled by Europeans in 1660 and was officially incorporated in 1778. and an 84-room Comfort Inn in North Dartmouth, Massachusetts. As part of this transaction, the Company obtained a right of first refusal Right of First Refusal In general, the right of a person or company to purchase something before the offering is made available to others. Notes: For example, a football team may have the right of first refusal on a player's contract. to purchase a 100-room Residence Inn in Norwood, Massachusetts Norwood is a town and census-designated place in Norfolk County, Massachusetts, USA. As of the 2000 census, the population was 28,587. The community was named after Norwood, England. , which is currently under construction and expected to open in August 2006. In May, the Company also closed the sale of its Holiday Inn Express in Hartford, Connecticut “Hartford” redirects here. For other uses, see Hartford (disambiguation). Hartford is the capital of the State of Connecticut. It is located in Hartford County on the Connecticut River, north of the center of the state. for $3.6 million, which includes the transfer of the existing land lease obligations. The asset was sold to an unaffiliated developer. On April 3, Hersha closed a development loan in the amount of $7.0 million, bearing interest of 10.0% per annum Per annum Yearly. . The loan is being used to finance the development of a Sheraton Hotel at the JFK Airport in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Outlook for 2006 Assuming a continued strong economy in the Northeast U.S. corridor and limited supply growth, the Company anticipates that its current portfolio, including the acquisitions completed to date, will lead to another year of growth in funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. . Net income available to common shareholders for the full year ended December December: see month. 31, 2006 is forecasted to be in the range of $1.25 million to $2.25 million, or $0.04 to $0.08 per weighted average diluted share outstanding. The Company continues to expect Adjusted FFO to be in the range of $0.98 to $1.02 per diluted share for the full year ended December 31, 2006. The Company is increasing its previously issued RevPAR guidance and is assuming RevPAR growth of 8% to 10% across the Company's consolidated portfolio. First Quarter 2006 Earnings Conference Call The Company will host a conference call to discuss its first quarter 2006 financial results, today, May 10, 2006 at 10:00 AM Eastern time. Hosting the call will be Mr. Jay H. Shah, Chief Executive Officer, and Mr. Ashish Ashish is a popular Nepali and Indian male first name that means "blessing". Among the persons with this first name are:
The conference call can be accessed by dialing (800) 817-4887 or for international participants (913) 981-4913. A replay of the call will be available from 1:00 PM Eastern time on May 10, 2006, through Midnight on May 17, 2006. The replay can be accessed by dialing (888) 203-1112 or for international participants (719) 457-0820 and entering passcode 5584276.
HERSHA HOSPITALITY TRUST
Summary Results
(in thousands, except shares and per share data)
Three Months Ended
------------------------------
March 31, 2006 March 31, 2005
------------------------------
Revenue:
Hotel Operating Revenues $ 23,901 $ 11,021
Expenses:
Hotel Operating Expenses 15,958 8,092
Land Leases 162 108
Real Estate and Personal Property
Taxes and Property Insurance 1,487 775
General and Administrative 1,164 977
Unrecognized (Gain) on Derivatives (4) (4)
Depreciation and Amortization 3,796 1,655
------------- ---------------
Total Operating Expenses 22,563 11,603
------------- ---------------
Operating Income (Loss) 1,338 (582)
Interest Income 158 37
Interest Income - Secured Loans
Related Party 421 1,000
Interest Income - Secured Loans 7 -
Other Revenue 194 27
Interest Expense 5,622 1,630
Debt Extinguishment 255 -
------------- ---------------
Loss before income (loss) from
Unconsolidated Joint Venture
Investments, Distributions to
Preferred Unitholders, Minority
Interests and Discontinued Operations (3,759) (1,148)
Income (Loss) from Unconsolidated
Joint Venture Investments (1,110) 49
------------- ---------------
Loss before Distribution to Preferred
Unitholders, Minority Interests and
Discontinued Operations (4,869) (1,099)
Loss Allocated to Minority Interest in
Continuing Operations (1,015) (242)
------------- ---------------
Loss from Continuing Operations (3,854) (857)
------------- ---------------
Discontinued Operations:
Income (Loss) from Discontinued
Operations (30) (117)
------------- ---------------
Net Loss (3,884) (974)
Preferred Distributions 1,200 -
------------- ---------------
Net Loss applicable to Common
Shareholders $ (5,084) $ (974)
============= ===============
Basic and diluted earnings per share
------------------------------------
Loss from continuing operations
applicable to common shareholders $ (0.25) $ (0.04)
Discontinued operations (0.00) (0.01)
------------- ---------------
Net Loss applicable to Common
Shareholders $ (0.25) $ (0.05)
============= ===============
Weighted Average Common Shares
Outstanding
Basic 20,308,225 20,291,234
Diluted 20,379,225 20,291,234
FFO and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Reconciliation The National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") developed Funds From Operations ("FFO") as a relative non-GAAP financial measure of performance and liquidity of an equity REIT Equity REIT A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT. in order to recognize that income-producing real estate historically has not depreciated Depreciated may refer to:
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated assets, plus certain non-cash items, such as depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. With respect to FFO from unconsolidated joint-ventures, we also add back depreciation from the purchase price of the joint-venture interest in excess of the joint-venture's basis in its hotels. Hersha also presents Adjusted Funds from Operations (Adjusted FFO), which reflects FFO in accordance with the NAREIT definition further adjusted by: --adding back income or loss allocated to units of partnership interest in our operating partnership, because the company reports Adjusted FFO to common shareholders on a fully diluted basis assuming conversion of those units to common shares; --adding back income allocated to minority interest (units of partnership interest in our operating partnership) related to discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. ; --adding back depreciation related to discontinued operations; --adding back distributions to holders of preferred units of partnership interest in the company's operating partnership, if any, which are expensed for GAAP purposes on its income statement; --adding back write-offs of deferred financing costs on debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. , both for consolidated and unconsolidated properties; --adding back amortization of deferred financing costs; --making adjustments to ground lease payments, which are required by GAAP to be amortized on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis over the term of the lease, to reflect the actual lease payment. FFO or Adjusted FFO do not represent cash flows from operating activities in accordance with GAAP and should not be considered an alternative to net income as an indication of Hersha's performance or to cash flow as a measure of liquidity or ability to make distributions. Hersha considers FFO and Adjusted FFO to be meaningful, additional measures of operating performance because they exclude the effects of the assumption that the value of real estate assets diminishes predictably over time, and because they are widely used by industry analysts as a performance measure. We show both FFO from consolidated hotels and FFO from unconsolidated joint-ventures because we believe it is meaningful for the investor to understand the relative contributions from our consolidated and unconsolidated hotels. Hersha also believes that the additional adjustments made to arrive at Adjusted FFO help to provide a meaningful view of its underlying operations. Comparison of the company's presentation of FFO and Adjusted FFO to similarly titled measures for other REITs is not necessarily meaningful due to the differences in the calculations used internally and by other REITs. The following table reconciles FFO and Adjusted FFO for the periods presented to the most directly comparable GAAP measure, net income, for the same periods:
HERSHA HOSPITALITY TRUST
Funds from Operations (FFO)
(in thousands, except shares and per share data)
Three Months Ending
3/31/2006 3/31/2005
------------- ---------------
Net Loss applicable to common shares $ (5,084) $ (974)
Less:
Loss (Income) from Unconsolidated
Joint Ventures 1,110 (49)
Add:
Depreciation and amortization 3,796 1,655
------------- ---------------
Funds from Consolidated Hotel
Operations (178) 632
(Loss) Income from Unconsolidated
Joint Ventures (1,110) 49
Add:
Depreciation and amortization of
purchase price in excess of
historical cost 475 -
Interest in depreciation and
amortization of unconsolidated
joint venture 1,021 257
------------- ---------------
Funds from Unconsolidated Joint
Ventures Operations 386 306
------------- ---------------
Funds from Operations 208 938
Add:
Loss allocated to minority interest
in our operating partnership (604) (139)
Loss allocated to minority interest
for discontinued operations (5) (16)
Depreciation from discontinued
operations 259 308
Amortization of deferred financing
costs 213 80
Deferred financing costs written
off in debt extinguishment 255 -
Interest in deferred financing
costs written off in
unconsolidated joint venture debt
extinguishment 207 -
Amortization of ground lease
expense 61 58
------------- ---------------
Adjusted Funds from Operations $ 593 $ 1,229
============= ===============
AFFO per Fully Diluted Weighted
Average Common Shares and Units
Outstanding $ 0.03 $ 0.06
============= ===============
HERSHA HOSPITALITY TRUST
Funds from Operations (FFO) - 2006 FORECAST RECONCILIATION
(in thousands, except shares and per share data)
Low High
Twelve Months Ending
12/31/2006 12/31/2006
------------- ---------------
Net Income applicable to common shares $ 1,250 $ 2,250
Less:
(Income) from Unconsolidated Joint
Ventures (1,614) (1,914)
Add:
Depreciation and amortization 19,000 19,000
------------- ---------------
Funds from Consolidated Hotel
Operations 18,636 19,336
Income from Unconsolidated Joint
Ventures 1,614 1,914
Add:
Depreciation and amortization 6,000 6,000
------------- ---------------
Funds from Unconsolidated Joint
Ventures Operations 7,614 7,914
------------- ---------------
Funds from Operations 26,250 27,250
Add:
Income allocated to minority
interest in our operating
partnership 138 248
Amortization of deferred financing
costs 850 850
Deferred financing costs written
off in debt extinguishment 700 700
Interest in deferred financing
costs written off in
unconsolidated jv debt
extinguishment 207 207
Amortization of ground lease
expense 275 275
------------- ---------------
Adjusted Funds from Operations $ 28,420 $ 29,530
============= ===============
Fully Diluted Weighted Average Common
Shares and Units Outstanding 29,000,000 29,000,000
Adjusted FFO per Fully Diluted
Weighted Average Common Shares and
Units Outstanding $ 0.98 $ 1.02
============= ===============
EBITDA and GAAP Reconciliation Earnings Before Interest Taxes and Depreciation and Amortization (EBITDA) is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission rules Securities and Exchange Commission Rules Rules enacted by the SEC to assist in the regulation of US financial markets. . Management believes EBITDA to be a meaningful measure of a REIT's performance and that it should be considered along with, but not as an alternative to, net income, cash flow, FFO and Adjusted FFO, as a measure of the company's operating performance.
HERSHA HOSPITALITY TRUST
EBITDA
(in thousands, except shares and per share data)
Three Months Ended
3/31/2006 3/31/2005
------------- ---------------
Net (Loss) applicable to common shares $ (5,084) $ (974)
Less: Interest income (158) (37)
Loss (Income) from Unconsolidated
Joint Ventures 1,110 (49)
Add:
Interest expense 5,622 1,630
Deferred financing costs written
off in debt extinguishment 255 -
Distributions to Series A Preferred
Shareholders 1,200 -
(Loss) allocated to minority
interest in our operating
partnership (604) (139)
(Loss) allocated to minority
interest for discontinued
operations (5) (16)
Depreciation and amortization from
continuing operations 3,796 1,655
Depreciation from discontinued
operations 259 308
Amortization of ground lease
expense 61 58
------------- ---------------
EBITDA from Consolidated Hotel
Operations 6,452 2,436
============= ===============
Supplemental Schedules The company has included supplemental schedules as an addendum addendum n. an addition to a completed written document. Most commonly this is a proposed change or explanation (such as a list of goods to be included) in a contract, or some point that has been subject of negotiation after the contract was originally proposed by to this press release in order to provide additional disclosure and financial information for the benefit of the company's stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. . About Hersha Hospitality Hersha Hospitality Trust is a self-advised real estate investment trust that owns interests in 58 midscale, upscale and upper upscale hotel properties with 7,211 rooms located in high barrier to entry markets primarily from Metro The code name for Microsoft's XPS document format. See XML Paper Specification. Boston, Massachusetts to Metro Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , DC with strong, national franchise affiliations. The Company focuses on acquisition and joint venture opportunities in primary and secondary markets near major metropolitan markets. More information on the Company is available on the Company's web site at www.hersha.com. Forward-Looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Certain matters within this press release are discussed using forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. language as specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement.
CONSOLIDATED HOTELS:
(Recorded from date of acquisition or investment)
Three Months Ended
March 31,
-------------------------------------------
2006 2005 % Variance
------------ ----------------- ----------
Rooms Available 375,448 235,230
Rooms Occupied 240,603 140,046
Occupancy 64.08% 59.54% 7.6%
Average Daily Rate (ADR) $97.89 $87.42 12.0%
Revenue Per Available Room
(RevPAR) $62.73 $52.05 20.5%
Room Revenues $23,551,527 $12,243,409
Food & Beverage/Other
Revenues $2,323,533 $1,674,273
Total Revenues $25,875,060 $13,917,682
Discontinued Assets $1,965,673 $3,052,813
EBITDA $6,749,640 $2,644,289
EBITDA Margin 26.1% 19.0%
EBITDA Margin Growth 7.1%
SAMESTORE HOTELS:
(Owned for the entire reporting period)
Three Months Ended
March 31,
-------------------------------------------
2006 2005 % Variance
------------ ----------------- ----------
Rooms Available 249,311 249,840
Rooms Occupied 162,246 154,012
Occupancy 65.08% 61.64% 5.6%
Average Daily Rate (ADR) $97.27 $93.16 4.4%
Revenue Per Available Room
(RevPAR) $63.30 $57.43 10.2%
Room Revenues $15,781,006 $14,348,290
Food & Beverage/Other
Revenues $2,095,854 $1,911,614
Total Revenues $17,876,860 $16,259,904
EBITDA $3,964,589 3,545,993
EBITDA Margin 22.2% 21.8%
EBITDA Margin Growth 0.4%
ALL HOTELS INCLUDING JOINT VENTURE ASSETS:
(Recorded from date of acquisition or investment)
Three Months Ended
March 31,
-------------------------------------------
2006 2005 % Variance
------------ ----------------- ----------
Rooms Available 577,076 273,390
Rooms Occupied 374,550 168,606
Occupancy 64.90% 61.67% 5.2%
Average Daily Rate (ADR) $106.73 $94.07 13.5%
Revenue Per Available Room
(RevPAR) $69.27 $58.02 19.4%
Room Revenues $39,974,857 $15,861,086
Food & Beverage/Other
Revenues $8,531,712 $2,031,312
Total Revenues $48,506,569 $17,892,398
EBITDA $10,631,841 $3,926,297
EBITDA Margin 21.9% 21.9%
EBITDA Margin Growth 0.0%
Hersha Hospitality Trust
Total Portfolio
March 31, 2006
(Dollars in thousands)
Name Rooms Year Opened/ Acquisition Debt Balance as
Complete Date of 03/31/06
Renovation
----------------------------------------------------------------------
Marriott
----------------------------------------------------------------------
1. Mystic, CT 285 2001 8/9/2005 $34,084
2. Hartford, CT 409 2005 2/9/2006 $45,000
Hilton
----------------------------------------------------------------------
3. Hartford, CT 392 2005 10/6/2005 $22,000
Courtyard
----------------------------------------------------------------------
4. Scranton 120 1996 2/1/2006 $6,300
5. Langhorne, PA 118 2002 1/3/2006 $15,575
6. Brookline/
Boston, MA 188 2003 6/16/2005 $38,913
7. Norwich, CT 144 1997 8/9/2005 $9,400
8. South Boston, MA 164 2005 7/1/2005 $16,000
9. Wilmington, DE 78 1999 6/17/2005 $8,000
10. Warwick, RI 92 2003 8/9/2005 $6,450
11. Ewing/
Princeton, NJ 130 2004 7/1/2004 $13,500
Hampton Inn
----------------------------------------------------------------------
12. Philadelphia, PA 250 2001 2/15/2006 NA
13. Chelsea/
Manhattan, NY 144 2003 8/29/2003 $15,675
14. Linden, NJ 149 2003 10/1/2003 $9,932
15. Newnan, GA 91 1996 4/20/2000 $2,897
16. Peachtree City, GA 61 1994 4/20/2000 $1,925
17. Hershey, PA 110 1999 1/1/2000 $3,483
18. Carlisle,PA 95 1997 1/26/1999 $3,694
19. Danville, PA 72 1998 9/1/1999 $2,338
20. Selinsgrove, PA 75 1996 1/26/1999 $3,086
21. Herald Square,
Manhattan, NY 136 2005 4/1/2005 $21,930
Residence Inn
----------------------------------------------------------------------
22. Tysons Corner, VA 96 1984 2/2/2006 $9,577
23. Danbury, CT 78 1999 8/9/2005 $8,050
24. Framingham, MA 125 2000 3/26/2004 $9,339
25. Greenbelt, MD 120 2002 7/16/2004 $12,711
26. Mystic, CT 133 1996 09/15/2005 $7,939
27. Southington, CT 94 2002 8/9/2005 $10,950
28. Williamsburg, VA 108 2002 11/22/2005 $8,500
Holiday Inn Express
----------------------------------------------------------------------
29. Duluth, GA 68 1996 5/19/2000 $2,517
30. Hartford, CT 96 2004 1/14/2004 NA
31. Hershey, PA 85 1997 1/26/1999 $4,396
32. New Columbia, PA 81 1997 1/26/1999 $1,683
33. Malvern, PA 88 2004 5/24/2005 $5,740
34. Oxford Valley, PA 88 2004 5/26/2005 $5,460
35. South Boston, MA 118 1998 10/7/2005 $6,326
Hilton Garden Inn
----------------------------------------------------------------------
36. JFK Airport, NY 188 2005 2/16/2006 $12,959
37. Edison, NJ 132 2003 10/1/2003 $7,946
38. Glastonbury, CT 150 2003 11/13/2003 $13,500
39. Gettysburg, PA 88 2004 7/23/2004 $5,315
Springhill Suites
----------------------------------------------------------------------
40. Waterford, CT 80 1998 8/9/2005 $6,335
41. Williamsburg, VA 120 2002 11/22/2005 $5,734
Holiday Inn Express & Suites
----------------------------------------------------------------------
42. Harrisburg, PA 77 1997 9/1/1999 NA
43. King of Prussia,
PA 155 2004 5/23/2005 $11,270
Four Points - Sheraton
----------------------------------------------------------------------
44. Revere/Boston, MA 180 2001 3/11/2004 $8,616
Mainstay
----------------------------------------------------------------------
45. Valley Forge, PA 69 2000 6/1/2001 NA
46. Frederick, MD 72 2001 1/1/2002 $3,500
Holiday Inn (HICC)
----------------------------------------------------------------------
47. Harrisburg, PA 196 1970 1/26/1999 $3,180
Comfort Inn
----------------------------------------------------------------------
48. Harrisburg, PA 81 1998 1/26/1999 $2,245
49. Frederick, MD 73 2004 5/27/2004 $2,831
Fairfield Inn
----------------------------------------------------------------------
50. Mt. Laurel, NJ 118 1998 1/3/2006 $7,400
51. Bethlehem, PA 103 1997 1/3/2006 $6,225
52. Laurel, MD 109 1999 1/31/2005 NA
Independent
----------------------------------------------------------------------
53. Wilmington, DE 71 1999 6/17/2005 $3,760
Comfort Suites
----------------------------------------------------------------------
54. Duluth, GA 85 1996 5/19/2000 $3,035
Sleep Inn
----------------------------------------------------------------------
55. Valley Forge, PA 87 2000 6/1/2001 NA
----------------------------------------------------------------------
TOTAL 6,915
=====
Name Ownership % Hersha Preferred
Equity Return
---------------------------------------------------------
Marriott
---------------------------------------------------------
1. Mystic, CT 66.7% 8.50%
2. Hartford, CT 15.0% 8.50%
Hilton
---------------------------------------------------------
3. Hartford, CT 8.8% 8.50%
Courtyard
---------------------------------------------------------
4. Scranton 100.0%
5. Langhorne, PA 100.0%
6. Brookline/
Boston, MA 100.0%
7. Norwich, CT 66.7% 8.50%
8. South Boston, MA 50.0% 10.00%
9. Wilmington, DE 100.0%
10. Warwick, RI 66.7% 8.50%
11. Ewing/
Princeton, NJ 50.0% 11.00%
Hampton Inn
---------------------------------------------------------
12. Philadelphia, PA 80.0% 9.00%
13. Chelsea/
Manhattan, NY 33.3%
14. Linden, NJ 100.0%
15. Newnan, GA 100.0%
16. Peachtree City, GA 100.0%
17. Hershey, PA 100.0%
18. Carlisle,PA 100.0%
19. Danville, PA 100.0%
20. Selinsgrove, PA 100.0%
21. Herald Square,
Manhattan, NY 100.0%
Residence Inn
---------------------------------------------------------
22. Tysons Corner, VA 100.0%
23. Danbury, CT 66.7% 8.50%
24. Framingham, MA 100.0%
25. Greenbelt, MD 100.0%
26. Mystic, CT 66.7% 8.50%
27. Southington, CT 44.7% 8.50%
28. Williamsburg, VA 75.0% 12.00%
Holiday Inn Express
---------------------------------------------------------
29. Duluth, GA 100.0%
30. Hartford, CT 100.0%
31. Hershey, PA 100.0%
32. New Columbia, PA 100.0%
33. Malvern, PA 100.0%
34. Oxford Valley, PA 100.0%
35. South Boston, MA 50.0% 10.00%
Hilton Garden Inn
---------------------------------------------------------
36. JFK Airport, NY 100.0%
37. Edison, NJ 100.0%
38. Glastonbury, CT 40.0% 11.00%
39. Gettysburg, PA 100.0%
Springhill Suites
---------------------------------------------------------
40. Waterford, CT 66.7% 8.50%
41. Williamsburg, VA 75.0% (a.)
Holiday Inn Express & Suites
---------------------------------------------------------
42. Harrisburg, PA 100.0%
43. King of Prussia,
PA 100.0%
Four Points - Sheraton
---------------------------------------------------------
44. Revere/Boston, MA 55.0% 12.00%
Mainstay
---------------------------------------------------------
45. Valley Forge, PA 100.0%
46. Frederick, MD 100.0%
Holiday Inn (HICC)
---------------------------------------------------------
47. Harrisburg, PA 100.0%
Comfort Inn
---------------------------------------------------------
48. Harrisburg, PA 100.0%
49. Frederick, MD 100.0%
Fairfield Inn
---------------------------------------------------------
50. Mt. Laurel, NJ 100.0%
51. Bethlehem, PA 100.0%
52. Laurel, MD 100.0%
Independent
---------------------------------------------------------
53. Wilmington, DE 100.0%
Comfort Suites
---------------------------------------------------------
54. Duluth, GA 100.0%
Sleep Inn
---------------------------------------------------------
55. Valley Forge, PA 100.0%
---------------------------------------------------------
(a.) - Preferred Return tier of 8% and 10% during years 1 and 2,
respectively, and then a 12% preferred return thereafter
Hersha Hospitality Trust
Mortgages and Notes Payable
March 31, 2006
Capped '03/31/06
'03/31/06 or Floating
Fixed Rate Fixed Rate Floating
Owned Properties Balance Rate Balance Rate Maturity
------------------ ------------- ------ ------------ -------- --------
Four Points
Sheraton - Revere,
MA (SBA Loan) $564,909 4.00% 01/2032
Courtyard -
Brookline, MA $38,913,000 5.35% 07/2015
Courtyard -
Langhorne, PA $15,575,000 5.75% 02/2016
Fairfield Inn &
Suites - Mt.
Laurel, NJ $7,400,000 5.75% 02/2016
Fairfield Inn &
Suites -
Bethlehem, PA $6,225,000 5.75% 02/2016
Courtyard -
Scranton, PA $6,300,000 5.83% 02/2016
Hampton Inn -
Linden, NJ $9,932,103 6.25% 10/2008
Hilton Garden Inn
- Edison, NJ $7,945,686 6.25% 10/2008
Residence Inn -
Greenbelt, MD $12,711,358 6.25% 10/2014
Residence Inn -
Williamsburg, VA $8,421,792 6.32% 01/2013
Springhill Suites -
Williamsburg, VA $5,734,142 6.32% 01/2013
Residence Inn -
Framingham, MA $9,339,279 6.38% 07/2019
Four Points
Sheraton -
Revere, MA $8,050,863 6.50% 07/2009
Residence Inn -
Tyson's Corner, VA $9,577,310 6.52% 08/2013
Hilton Garden Inn
- Gettysburg, PA $5,315,182 6.62% 09/2009
Holiday Inn Express
& Suites - King of
Prussia, PA $11,270,000 7.13% 07/2008
Holiday Inn Express
- Malvern, PA $5,740,000 7.13% 07/2008
Holiday Inn
Express -
Langhorne, PA $5,460,000 7.13% 07/2008
Courtyard -
Wilmington, DE $8,000,000 7.13% 07/2008
Independent Hotel
- Wilmington, DE $3,760,000 7.13% 07/2008
Mainstay Suites and
Comfort Inn -
Frederick, MD $6,331,036 7.75% 12/2012
Hampton Inn -
Newnan, GA $2,896,720 8.70% 08/2007
Comfort Suites -
Duluth, GA $3,035,420 8.71% 06/2010
Holiday Inn
Express - Duluth,
GA $2,517,178 8.71% 06/2010
Hampton Inn -
Carlisle, PA $3,694,091 8.94% 04/2010
Hampton Inn -
Selinsgrove, PA $3,086,202 8.94% 04/2010
Holiday Inn
Express -
Hershey, PA $4,395,500 8.94% 04/2010
Hampton Inn -
Danville, PA $2,338,032 8.94% 04/2010
HICC - New
Cumberland, PA $3,179,723 8.94% 04/2010
Comfort Inn - West
Hanover, PA $2,244,511 8.94% 04/2010
Holiday Inn
Express - New
Columbia, PA $1,683,383 8.94% 04/2010
Hampton Inn -
Peachtree City, GA $1,925,191 9.43% 05/2017
Hampton Inn - $21,930,000 30 Day 03/2009
Herald Square, NY LIBOR +
3.65%
Hampton Inn - $3,482,708 30 Day 06/2014
Hershey, PA LIBOR +
2.75%
Hilton Garden Inn $12,959,198 30 Day 12/2010
- JFK Airport, NY LIBOR +
2.75%
Trust Preferred
Tranche I $25,774,000 7.34% 05/2035
Trust Preferred
Tranche II $25,774,000 7.17% 06/2035
------------- ------------
Sub-Total $275,110,610 $38,371,906
------------- ------------
Total Consolidated
Debt $313,482,516
=============
Unconsolidated Joint Ventures
-----------------------------
Courtyard - Ewing,
NJ $13,500,000 5.54% 08/2012
Courtyard -
Norwich, CT $9,400,000 5.63% 08/2015
Springhill Suites
- Waterford, CT $6,335,000 5.63% 08/2015
Residence Inn -
Southington, CT $10,950,000 5.63% 08/2015
Residence Inn -
Danbury, CT $8,050,000 5.63% 08/2015
Courtyard -
Warwick, RI $6,450,000 5.63% 08/2015
Hilton Garden Inn
- Glastonbury, CT $13,500,000 5.98% 03/2016
HIEXP - South
Boston $6,325,971 6.75% 01/2015
Residence Inn -
Mystic, CT $7,938,954 6.89% 02/2014
Marriott - Mystic,
CT $25,083,718 6.98% 11/2010
Marriott - Mystic,
CT (Mezzanine
Loan) $9,000,000 8.55% 11/2010
Hampton Inn - $15,675,000 30 Day 02/2007
Chelsea, NY LIBOR +
3.50%
Courtyard - South $16,200,000 30 Day 10/2009
Boston, MA LIBOR +
2.25%
Hilton - Hartford, $22,000,000 30 Day 11/2009
CT LIBOR +
2.75%
Marriott - $45,000,000 30 Day 02/2010
Hartford, CT LIBOR +
2.90%
------------- ------------
Sub-Total $116,533,643 $98,875,000
------------- ------------
Total
Unconsolidated
Joint Venture
Debt $215,408,643
=============
Hersha Hospitality Trust
First Quarter 2006 Acquisition Activity
March 31, 2006
(Dollars in thousands)
Year Opened/
Complete Acquisition Purchase Debt
Name Rooms Renovation Date Price Balance
---------------------------------------------------------------------
Closed
---------------------------------------------------------------------
Courtyard -
Langhorne, PA 118 2002 01/03/2006 $21,000 $15,575
Fairfield Inn &
Suites -
Bethlehem, PA 103 1997 01/03/2006 $8,800 $6,225
Fairfield Inn &
Suites - Mt.
Laurel, NJ 118 1998 01/03/2006 $10,700 $7,400
Courtyard -
Scranton, PA 120 1996 02/01/2006 $8,650 $6,300
Residence Inn -
Tyson's Corner, VA 96 1984 02/02/2006 $19,750 $9,577
Marriott -
Hartford
Downtown, CT 409 2005 02/08/2006 $87,150 $45,000
Hampton Inn - NA
Philadelphia, PA 250 2001 02/15/2006 $27,000
Hilton Garden Inn
- JFK Airport, NY 188 2005 02/16/2006 $29,000 $13,000
------- -------------------
TOTAL 1,402 $212,050 $103,077
Hersha Hospitality Trust
First Quarter 2006 Acquisition Activity
March 31, 2006
(Dollars in thousands)
Name Ownership HERSHA % HERSHA % Hersha
% OF OF DEBT Preferred
ACQUISITIONS Equity
Return
-----------------------------------------------------------------
Closed
-----------------------------------------------------------------
Courtyard -
Langhorne, PA 100.0% $21,000 $15,575
Fairfield Inn &
Suites -
Bethlehem, PA 100.0% $8,800 $6,225
Fairfield Inn &
Suites - Mt.
Laurel, NJ 100.0% $10,700 $7,400
Courtyard -
Scranton, PA 100.0% $8,650 $6,300
Residence Inn -
Tyson's Corner, VA 100.0% $19,750 $9,577
Marriott -
Hartford
Downtown, CT 15.0% $13,073 $6,750 8.50%
Hampton Inn -
Philadelphia, PA 80.0% $21,600 9.00%
Hilton Garden Inn
- JFK Airport, NY 100.0% $29,000 $13,000
-----------------------
TOTAL $132,573 $64,827
Hersha Hospitality Trust
Development Loans Receivable
March 31, 2006
Principal
Outstanding Interest Maturity
Hotel Property Borrower March 31, 2006 Rate Date
------------------- ----------------- ---------------------- --------
Hampton Inn - HPS Seaport, LLC
Seaport, New York and BCM, LLC $13,000,000 10.0% (1)
Candlewood Suites - 44 Windsor Locks August
Windsor Locks, CT Associates, LLC 31, 2006
$1,100,000 10.0%
-------------
$14,100,000
=============
(1) - Development loan has been paid off in full as of April 7, 2006.
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