Hersha Hospitality Announces Second Quarter 2006 Earnings.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) --Highlights: --Adjusted FFO FFO See: Funds from operations Rose 42% to $0.34 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 --Consolidated 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. Improved 11.8% --Acquired Five Hotel Properties with 661 Rooms Hersha Hospitality Trust (AMEX: HT), a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) that owns interests in 60 nationally franchised, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. upscale and midscale hotels in high barrier-to-entry markets, today announced earnings for the second quarter 2006. Consolidated Adjusted 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. (AFFO AFFO Adjusted Funds From Operation ) for the second quarter 2006 increased to $0.34 per diluted share from $0.24 per diluted in the same quarter of 2005. Net income applicable to common shareholders was $2.2 million, or $0.09 per diluted share compared to net income of $3.8 million, or $0.18 per diluted share in second quarter 2005. The decrease in net income 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 and increased interest expense, offset by increased hotel operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . 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, noted, "Our strong AFFO growth of 42% for the second quarter 2006 was due to the accretive contribution of the 25 assets we have acquired since the end of the second quarter 2005 and the overall position of our hotels serving predominantly business travelers. We were also able to timely deploy the capital we raised from common and preferred share offerings in 2005 and 2006. We continue to drive growth in average daily rate (ADR ADR - Astra Digital Radio ), given the position of our hotels in high barrier-to-entry markets. The combination of our recently opened hotels establishing their operations along with our already solid occupancy enabled the Company to achieve 11.8% Revenue Per Available Room (RevPAR) growth. Furthermore, 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 margins expanded 169 basis points for our consolidated hotels." Financial Highlights for the Second Quarter 2006 For the three month period ended June June: see month. 30, 2006, consolidated hotel revenues, increased 100% to $38.2 million from $19.1 million in the second quarter 2005 driven primarily by hotel acquisitions and growth in room revenues. RevPAR for the Company's consolidated hotels (44 hotels) increased 11.8% on a year-over-year basis to $89.15 driven by a 10.1% increase in ADR to $112.97 and a 1.6% improvement in occupancy to 78.9%. Gross operating profit margins Operating profit margin The ratio of operating profit to net sales. , increased to 47.0% from 46.7% from the year ago quarter. Total EBITDA for consolidated hotels increased 108.2% to $15.2 million for the second quarter 2006. EBITDA margins for the quarter increased 169 basis points to 39.9% for consolidated hotels. On a same-store basis (24 hotels), RevPAR for the three month period of the second quarter 2006 increased 7.3% on a year-over-year basis to $92.26 driven by a 6.4% increase in ADR to $116.08 and a 0.9% improvement in occupancy to 79.5%. Same-store EBITDA for the second quarter 2006 increased 10.6% to $9.4 million due to the increase in revenue, offset somewhat by higher utility costs, repairs and maintenance, accounting fees and payroll and benefits costs. The Company anticipates that its same-store results will be more similar to its consolidated results in the future, as the Company annualizes the date of acquisition of each of its acquired hotels. Other Second Quarter 2006 Highlights --In April, 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 $63.4 million. The Company used 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 April and May, Hersha closed on 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, purchasing 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. , a 96-suite 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. --In April, 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. --In June, Hersha closed its acquisition of a 40% interest in the 136-suite extended-stay Homewood Homewood. 1 City (1990 pop. 22,922), Jefferson co., N central Ala., a residential suburb of Birmingham; inc. 1921. 2 Village (1990 pop. 19,278), Cook co., NE Ill., a residential suburb of Chicago; platted 1852, inc. 1892. Suites by 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. in Glastonbury, Connecticut Glastonbury (41n43, 72w37 EST) is a town in Hartford County, Connecticut, United States. The population was 31,876 at the 2000 census. It was named after the English Glastonbury. Glastonbury is located on the banks of the Connecticut River, south east from Hartford. . The Company's 40% interest was purchased for approximately $2.5 million and carries a preferred return of 10% per annum Per annum Yearly. . --In June, the Company signed definitive agreements to purchase the 161-room Hampton Hampton, part of Greater London, England 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 in Farmingville, New York Farmingville is a hamlet (and census-designated place) in Suffolk County, New York, United States. The population was 16,458 at the 2000 census. Farmingville is in the Town of Brookhaven. and the seven story 133-room Holiday Inn Express in Hauppauge, New York Hauppauge (pronounced /hɔpɔg/) is a hamlet in the Town of Islip and the Town of Smithtown in Suffolk County, New York, United States. for a total of $39.5 million. --The Company closed four separate development loans and land lease transactions during the quarter totaling $41 million, each bearing an interest rate of 10%. These loans will fund the development of 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. area hotels including the Sheraton Hotel at the JFK Airport, the Holiday Inn Express Manhattan-Chelsea, the Union Square Hotel and the Times Square Hotel on Eighth Avenue. The Company's transactions for the second quarter 2006 are detailed in the supplemental schedule at the end of this release and on file on the Company's website. Financial Highlights for the Six Month Period Ended June 30, 2006 For the six month period ended June 30, 2006, consolidated hotel revenues increased 106.3% to $62.1 million from $30.1 million in the second quarter 2005 driven primarily by hotel acquisitions and growth in room revenues. RevPAR for the Company's consolidated hotels (44 hotels) increased 15.3% on a year-over-year basis to $77.42 driven by a 10.1% increase in ADR to $107.58 and a 4.7% improvement in occupancy to 72.0%. Gross operating profit margins increased to 42.9% from 40.8% in the year ago quarter. Total EBITDA for consolidated hotels increased 132.2% to $21.6 million for the six month period ended June 30, 2006. EBITDA margins for the quarter increased 384 basis points to 34.8% for consolidated hotels. On a same-store basis (24 hotels), RevPAR for the six month period ended June 30, 2006 increased 8.4% on a year-over-year basis to $76.67 driven by a 4.9% increase in ADR to $106.33 and a 3.3% improvement in occupancy to 72.1%. Same-store EBITDA for the six month period ended June 30, 2006 increased 10.5% to $11.6 million due to the increase in revenue, offset somewhat by higher utility costs, repairs and maintenance, accounting fees and payroll and benefits costs. Balance Sheet At June 30, 2006, Hersha Hospitality Trust had approximately $353 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 $10.3 million of long-term debt on assets held for sale. The weighted average interest rate on the Company's fixed rate debt was approximately 6.55%, down from 6.71% in the first quarter 2006. The weighted average life to maturity of the Company's debt was 10.0 years. Fixed rate debt, including variable rate debt fixed 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 91.6% of total debt, up from 88.0% of total debt at the end of the first quarter 2006. At June 30, 2006, the Company's diluted common shares and partnership units outstanding were a combined 31,459,391. Dividend For the second quarter 2006, Hersha Hospitality Trust declared cash common share and limited partnership unit dividends of $0.18 per common share and unit. The Company's common dividend represents the 29th consecutive quarterly dividend at this amount since the Company's 1999 initial public offering. The common dividend represents a yield of approximately 7.9% based upon the closing price of Hersha Hospitality Trust stock on August 7, 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 --In July July: see month. , Hersha signed an agreement to purchase the remaining two-thirds interest in the joint venture that owns the 144-room Hampton Inn Manhattan-Chelsea from its joint-venture partner, CNL CNL CityNightLine (German Rail) CNL Cancel CNL Clinical Nurse Leader Cnl Colonel CNL Center for Naval Leadership CNL Compensated Neutron Log (oil industry) Hotels & Resorts, Inc ("CNL"). --In July, the Company exercised its 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 the 96-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. . The brand new hotel opened on July 27th. Mr. Shah concluded, "The decision to make the Hampton Inn Manhattan-Chelsea a wholly-owned asset is an example of how we intend to execute our joint-venture strategy. The significant advantage to our joint-venture agreements is that we can monitor the performance of these assets with the view of making these wholly-owned assets, once certain performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. are achieved. This allows us to build shareholder value, while minimizing the risk associated with developing a new property or entering a new market." Outlook for 2006 Assuming a continued strong U.S. economy 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 AFFO. The Company is maintaining its previously issued guidance for net income available to common shareholders for the full year ended December December: see month. 31, 2006, which 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 AFFO to be in the range of $0.98 to $1.02 per diluted share for the full year ended December 31, 2006. The Company's expectations for net income available to common shareholders, net income available to common shareholders per weighted average diluted share outstanding and AFFO per diluted share is based upon the Company achieving RevPAR growth of 8% to 10%, as compared to the full year 2005, across the Company's consolidated portfolio, which is also unchanged from the Company's previous report in its first quarter 2006 earnings release. Second Quarter 2006 Earnings Conference Call The Company will host a conference call to discuss its second quarter 2006 financial results, tomorrow, August 9, 2006 at 9:00 AM Eastern time. Hosting the call will be Mr. Jay H. Shah, Chief Executive Officer, and Mr. Ashish Parikh, Chief Financial Officer. 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 August 9, 2006, through Midnight on August 16, 2006. The replay can be accessed by dialing (888) 203-1112 or for international participants (719) 457-0820 and entering passcode 6134785.
HERSHA HOSPITALITY TRUST
Summary Results
(in thousands, except shares and
per share data)
Three Months Six Months
Ended Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
-------- -------- -------- --------
Revenue:
Hotel Operating Revenues $38,183 $19,122 $62,084 $30,126
Expenses:
Hotel Operating Expenses 21,392 10,857 37,350 18,952
Land Lease 216 109 378 217
Real Estate and Personal Property
Taxes and Property Insurance 1,460 837 2,947 1,611
General and Administrative 1,812 1,135 2,976 2,113
Depreciation and Amortization 4,609 2,096 8,405 3,751
-------- -------- -------- --------
Total Operating Expenses 29,489 15,034 52,056 26,644
-------- -------- -------- --------
Operating Income 8,694 4,088 10,028 3,482
Interest Income 322 64 480 101
Interest Income - Secured Loans
Related Party 295 911 723 1,911
Other Revenue 230 159 424 203
Interest Expense 5,923 2,633 11,541 4,259
Debt Extinguishment 908 - 1,163 -
-------- -------- -------- --------
Income (loss) before income (loss)
from Unconsolidated Joint Venture
Investments, Minority Interests
and Discontinued Operations 2,710 2,589 (1,049) 1,438
Income (loss) from Unconsolidated
Joint Venture Investments 769 279 (341) 328
-------- -------- -------- --------
Income (Loss) before Minority
Interests and Discontinued
Operations 3,479 2,868 (1,390) 1,766
-------- -------- -------- --------
Income (Loss) allocated to
Minority Interest in Continuing
Operations 690 399 (325) 157
-------- -------- -------- --------
Income (Loss) from Continuing
Operations 2,789 2,469 (1,065) 1,609
-------- -------- -------- --------
Discontinued Operations (Note 12):
Gain on Disposition of Hotel
Properties 434 1,161 434 1,161
Income (Loss) from Discontinued
Operations 153 125 123 9
-------- -------- -------- --------
Income from Discontinued
Operations 587 1,286 557 1,170
Net Income (Loss) 3,376 3,755 (508) 2,779
Preferred Distributions 1,200 - 2,400 -
-------- -------- -------- --------
Net Income (Loss) applicable to
Common Shareholders $ 2,176 $ 3,755 $(2,908) $ 2,779
======== ======== ======== ========
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 non-GAAP financial measure of performance 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 the April 2002 National Policy Bulletin of NAREIT, which we refer to as the White Paper. The White Paper defines FFO as net income (loss) (computed in accordance 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. Our interpretation of the NAREIT definition is that minority interest in net income (loss) should be added back to (deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from) net income (loss) as part of reconciling net income (loss) to FFO. Our FFO computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. may not be comparable to FFO reported by other REITs that do not compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. The GAAP measure that we believe to be most directly comparable to FFO, net income (loss) applicable to common shares, includes depreciation and amortization expenses, gains or losses on property sales, minority interest and preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) . In computing computing - computer FFO, we eliminate these items because, in our view, they are not indicative of the results from our property operations. Hersha also presents Adjusted Funds from Operations (AFFO), which reflects FFO in accordance with the NAREIT definition further adjusted by: --adding back depreciation 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 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 basis over the term of the lease, to reflect the actual lease payment. FFO and AFFO 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. We consider FFO and AFFO to be meaningful, additional measures of our operating performance because it excludes the effects of the assumption that the value of real estate assets diminishes predictably over time, and because it is widely used by industry analysts as a performance measure. We show both FFO from consolidated hotel operations 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. The display of both FFO from consolidated hotels and FFO from unconsolidated joint ventures allows for a detailed analysis of the operating performance of our hotel portfolio by management and investors. We present FFO and AFFO applicable to common shares and Partnership units because our Partnership units are redeemable Redeemable Eligible for redemption under the terms of an indenture. for common shares. We believe it is meaningful for the investor to understand FFO applicable to all common shares and Partnership units. The following table reconciles FFO and AFFO 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 Six Months Ending
----------------------- -----------------------
6/30/2006 6/30/2005 6/30/2006 6/30/2005
----------- ----------- ----------- -----------
Net income (loss)
applicable to common
shares $ 2,176 $ 3,755 $ (2,908) $ 2,779
Income (loss)
allocated to
minority interest 690 399 (325) 157
Income (loss) of
discontinued
operations allocated
to minority interest 21 17 18 1
(Income) loss from
unconsolidated joint
ventures (769) (279) 341 (328)
Gain on sale of
assets (434) (1,161) (434) (1,161)
Depreciation and
amortization 4,609 2,096 8,405 3,751
FFO related to the
minority interests
in consolidated
joint ventures (454) (257) (313) (216)
----------- ----------- ----------- -----------
Funds from
consolidated hotel
operations applicable
to common shares and
Partnership units 5,839 4,570 4,784 4,983
Income (Loss) from
Unconsolidated Joint
Ventures 769 279 (341) 328
Add:
Depreciation and
amortization of
purchase price in
excess of
historical cost 446 - 921 -
Interest in
depreciation and
amortization of
unconsolidated
joint venture 1,553 259 2,573 516
----------- ----------- ----------- -----------
Funds from
unconsolidated joint
ventures operations
applicable to common
shares and
Partnership units 2,768 538 3,153 844
----------- ----------- ----------- -----------
Funds from Operations
applicable to common
shares and Partnership
units 8,607 5,108 7,937 5,827
Add:
Depreciation from
discontinued
operations - 315 258 622
Amortization of
deferred financing
costs 163 105 375 171
Deferred financing
costs written off
in debt
extinguishment 908 - 1,163 -
Interest in deferred
financing costs
written off in
unconsolidated
joint venture debt
extinguishment - - 207 -
Amortization of
ground lease
expense 68 58 130 117
----------- ----------- ----------- -----------
Adjusted Funds from
Operations $ 9,746 $ 5,586 $ 10,070 $ 6,737
=========== =========== =========== ===========
AFFO per Diluted
Weighted Average
Common Shares and
Units Outstanding $ 0.34 $ 0.24 $ 0.38 $ 0.29
=========== =========== =========== ===========
Diluted Weighted
Average Common Shares
and Units Outstanding 29,056,539 23,159,013 26,311,095 23,146,372
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 125 225
Amortization of deferred financing costs 850 850
Deferred financing costs written off in debt
extinguishment 1,300 1,300
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 $29,007 $30,107
=========== ===========
Diluted Weighted Average Common Shares and
Units Outstanding 29,500,000 29,500,000
Adjusted FFO per 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 AFFO, as a measure of the company's operating performance.
HERSHA HOSPITALITY TRUST
EBITDA
(in thousands, except shares and
per share data)
Three Months Six Months
Ended Ended
---------------- -----------------
June 30, June 30,June 30, June 30,
2006 2005 2006 2005
-------- ------- -------- --------
Net Income (Loss) applicable to
common shares $2,176 $3,755 $(2,908) $2,779
Less:
(Income) Loss from Unconsolidated
Joint Ventures (769) (279) 341 (328)
Interest income (617) (975) (1,203) (2,012)
Add:
Income (Loss) allocated to minority
interest in common units 390 346 (155) 225
Income (Loss) allocated to minority
interest for discontinued
operations 81 180 81 163
Interest expense 5,923 2,633 11,541 4,259
Deferred financing costs written
off in debt extinguishment 908 - 1,163 -
Distributions to Series A Preferred
Shareholders 1,200 - 2,400 -
Depreciation and amortization from
continuing operations 4,609 2,096 8,405 3,751
Depreciation from discontinued
operations - 315 258 622
Amortization of ground lease
expense 68 58 130 117
-------- ------- -------- --------
EBITDA from consolidated hotel
operations 13,969 8,129 20,053 9,576
-------- ------- -------- --------
Income (Loss) from Unconsolidated
Joint Ventures 769 279 (341) 328
Add:
Interest expense 3,415 243 6,304 481
Deferred financing costs written
off in debt extinguishment - - 207 -
Depreciation and amortization of
purchase price in excess of
historical cost 446 - 921 -
Interest in depreciation and
amortization of unconsolidated
joint venture 1,553 259 2,573 516
-------- ------- -------- --------
EBITDA from unconsolidated joint
venture operations 6,183 781 9,664 1,325
-------- ------- -------- --------
EBITDA $20,152 $8,910 $29,717 $10,901
======== ======= ======== ========
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 60 midscale, upscale and upper upscale hotel properties with 7,443 rooms located in high barrier to entry markets primarily from Metro Boston, Massachusetts to Metro Washington, 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 language as specified 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. |
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