- Fourth Quarter 2017 Comparable Portfolio RevPAR
Growth of 6.0% - - EBITDA Outperformance Driven by Newly Acquired
Assets –- Exceeds High-End of 2017 Guidance –
Hersha Hospitality Trust (NYSE:HT) (“Hersha,” “Company,” “we” or
“our”), owner of high quality hotels in urban gateway markets and
coastal destinations, today announced results for the full-year and
fourth quarter ended December 31, 2017.
Full-Year and Fourth Quarter 2017
Financial Results
Net income applicable to common shareholders was
$75.7 million, or $1.79 per diluted common share, in 2017, compared
to net income applicable to common shareholders of $95.6 million,
or $2.18 per diluted common share, in 2016.
Net loss applicable to common shareholders was
($14.3 million), or ($0.36) per diluted common share, in fourth
quarter 2017, compared to net income applicable to common
shareholders of $1.1 million, or $0.02 per diluted common share, in
fourth quarter 2016. The decrease in full year and fourth
quarter 2017 net income and net income per diluted common share was
primarily due to a decline in gains on dispositions of hotel
assets.
Mr. Jay H. Shah, Hersha’s Chief Executive
Officer, stated, “Our portfolio grew substantially in the fourth
quarter as we outperformed in all of our core markets. The
outperformance was driven by several of our newly acquired assets
that are exhibiting strong fundamental growth and are
benefitting from our revenue and asset management
strategies. In addition, strength in the South Florida
market from Hurricane related recovery efforts and the abatement of
Zika fears allowed us to exceed our internal growth forecasts and
beat the high end of our 2017 financial guidance range. Our
comparable portfolio delivered 6.0% RevPAR growth and 110 basis
points of EBITDA margin growth during the fourth quarter
2017. Margins at our recently refreshed and newly acquired
hotels benefited from a combination of cost containment initiatives
and innovative pricing and distribution strategies.”
Mr. Shah continued, “Results over the prior
quarter and in early 2018 leave us encouraged for continued growth
in corporate travel spending and sustained leisure demand. As
we look into 2018, we are encouraged by favorable comps and
positive fundamentals from our market-leading clusters on the West
Coast, New York, Boston, and South Florida. We’ve spent the
last several years on selective capital recycling opportunities and
meaningful ROI-generating capital investments at a number of our
hotels, positioning them to leverage domestic and global GDP growth
and the reacceleration of lodging fundamentals.”
Adjusted Funds from Operations (“AFFO”) in 2017
decreased by $12.9 million, or 11.7%, to $96.9 million, compared to
$109.8 million in 2016. The Company’s weighted average
diluted common shares and units of limited partnership interest in
Hersha Hospitality Limited Partnership (“OP Unit”) outstanding
declined to approximately 44.8 million as of December 31, 2017,
compared to approximately 45.7 million as of December 31,
2016. AFFO per diluted common share and OP Unit in 2017 was
$2.16, a 10.0% decrease from AFFO of $2.40 per diluted common share
and OP Unit reported in 2016.
AFFO in the fourth quarter 2017 decreased by
$1.6 million, or 7.0%, to $21.4 million, compared to $23.0 million
in the fourth quarter 2016. AFFO per diluted common share and
OP Unit in the fourth quarter 2017 was $0.48, a 7.7% decrease from
AFFO per diluted common share and OP Unit of $0.52 in the same
quarter in 2016. An explanation of certain non-GAAP financial
measures used in this press release, including, among others, AFFO,
as well as reconciliations of those non-GAAP financial measures, to
GAAP net income, is included at the end of this press
release.
Fourth Quarter 2017 Operating
Results
Revenue per available room (“RevPAR”) at the
Company's 38 comparable hotels increased 6.0% to $184.59 in the
fourth quarter 2017. The Company’s average daily rate (“ADR”)
for the comparable hotel portfolio increased 1.8% to $223.94, while
occupancy grew 330 basis points to 82.4%. Hotel EBITDA
margins for the comparable hotel portfolio increased 110 basis
points to 33.4%.
The best performing assets during the fourth
quarter were in the Company’s South Florida portfolio, which
reported 22.5% RevPAR growth to $174.86. Performance was
driven by hurricane-related compression and a resurgence in leisure
travel to Miami as waning Zika fears, stronger economic growth and
stabilization of international inbound tourism drove strong demand.
We remain bullish on the Miami market and foresee robust operating
fundamentals in 2018 and beyond, benefitting from advantageous
comps and the reopening of the Miami Beach Convention
Center.
West Coast
The West Coast portfolio, which includes
California and Seattle, consisted of eight hotels as of December
31, 2017. In the fourth quarter 2017, the Company’s
comparable West Coast hotel portfolio reported RevPAR growth of
3.3% to $164.03, driven by a 1.9% ADR increase to $208.09.
The West Coast portfolio’s outperformance was driven by the
Sanctuary Beach Resort, recording 13.0% RevPAR growth, due to an
increase in demand and marketing strategies that leveraged the new
Salt Wood Kitchen & Oysterette following its renovation.
Looking ahead in 2018, fundamentals for our market-leading hotels
on the West Coast remain strong and we believe will continue to
drive profitability and free cash flow growth.
New York City and Manhattan
The New York City portfolio, which includes the
five boroughs, consisted of ten hotels as of December 31,
2017. In the fourth quarter 2017, the Company’s comparable
New York City hotel portfolio reported RevPAR growth of 3.1% to
$236.26, driven by an occupancy increase of 207 basis points to
94.2%. The Company’s comparable Manhattan portfolio, which
consisted of seven hotels as of December 31, 2017, reported RevPAR
growth of 1.6% to $266.05 driven by an occupancy increase of 102
basis points to 95.0%. Hersha’s Manhattan portfolio reported GOP
and Hotel EBITDA margins of 53.9% and 41.8%, respectively, in the
fourth quarter 2017. The Company’s comparable Manhattan
portfolio has outperformed the Manhattan market in 14 of the
previous 16 quarters as a result of a young, well-located and
purpose built hotel cluster that appeals to the tastes and
preferences of today’s traveler.
Philadelphia
The Philadelphia Urban and Metro portfolio,
which includes Center City and the surrounding suburbs, consisted
of four hotels as of December 31, 2017. In the fourth quarter
2017, the Company’s comparable hotel portfolio reported RevPAR
growth of 9.8% to $169.10, driven by an ADR increase of 7.4% to
$226.75. The Philadelphia portfolio’s outperformance was
driven by continued stabilization post acquisition at the
Philadelphia Westin, which experienced RevPAR and ADR growth of
9.8% and 7.8%, respectively. Following a challenging third
quarter with difficult comps from the DNC in 2016, the Philadelphia
market saw a rebound in leisure activity in the market related to
favorable city-wide activities such as the Army-Navy game in
December.
Dispositions
During the fourth quarter, the Company closed on
the sale of the 80-room Holiday Inn Express in Chester, NY for $8.4
million or $105,000 per key.
Financing
As of December 31, 2017, the Company maintained
financial flexibility with $18 million of cash and cash equivalents
and significant capacity on the Company’s $250 million senior
unsecured revolving line of credit. As of December 31, 2017,
67.0% of the Company’s consolidated debt was fixed rate debt or
hedged through interest rate swaps and caps. The Company’s
total consolidated debt had a weighted average interest rate of
approximately 3.85% and a weighted average life-to-maturity of
approximately 4.2 years.
Subsequent Events
On February 6, 2018, the Cindat joint venture
successfully refinanced the existing debt on seven assets in
Manhattan owned in the joint venture owned by the Company and
Cindat Capital Management Limited. The joint venture entered
into a new $300 million senior mortgage loan and $85 million of
mezzanine financing and refinanced the existing $285 million senior
loan, the $50 million mezzanine loan and redeemed $43.2 million of
Hersha’s 9% cumulative redeemable preferred interest in the joint
venture.
On February 16, 2018, the Company sold the
140-room Hyatt House in Gaithersburg, MD for $19.0 million or
$136,000 per key.
Share Repurchase Activity
In the fourth quarter 2017, the Company
repurchased approximately 1.7 million common shares for an
aggregate repurchase price of $30.4 million. Since January 1, 2014,
the Company has repurchased $232.3 million in common shares,
representing 21.8% of the January 1, 2014 float.
In the fourth quarter 2017, Hersha’s Board of
Trustees approved a new share repurchase program of up to $100
million of the Company’s outstanding common shares. The new
repurchase program expires on December 31, 2018, unless extended by
the Board of Trustees.
Dividends
Hersha paid a cash dividend of $0.4297 per
Series C Preferred Share, $0.40625 per Series D Preferred Share,
and $0.40625 per Series E Preferred Share for the fourth quarter
ending December 31, 2017. The preferred share dividends were
paid January 16, 2018 to holders of record as of January 1,
2018.
The Company also declared cash dividends
totaling $0.28 per common share and per limited partnership unit
for the fourth quarter ending December 31, 2017. These common
share dividends and limited partnership unit distributions were
paid January 16, 2018 to holders of record as of January 5,
2018.
First Quarter and Full-Year 2018
Outlook
The Company is providing its operating and
financial expectations for the first quarter and full-year
2018. The Company’s expectations do not build in any
additional acquisitions, dispositions or capital market activities
for 2018. Based on management’s current outlook and
assumptions regarding the timing of the reopening of our two South
Florida assets, the Company’s 2018 operating expectations are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'18 Outlook |
2018 Outlook |
|
|
($’s in millions except per share
amounts) |
Low |
|
High |
Low |
|
High |
|
|
Net income |
$18.9 |
|
$19.9 |
$21.0 |
|
$29.0 |
|
|
Net income per share |
$0.47 |
|
$0.49 |
$0.51 |
|
$0.71 |
|
|
|
|
|
|
|
|
|
|
|
Comparable Property RevPAR Growth |
-2.0% |
|
-1.0% |
1.0% |
|
3.0% |
|
|
Comparable Property EBITDA Margin Growth |
-300 bps |
|
-240 bps |
-50 bps |
|
50 bps |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$18.2 |
|
$19.2 |
$159.0 |
|
$167.0 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO |
-$1.3 |
|
-$0.3 |
$82.0 |
|
$90.0 |
|
|
Adjusted FFO per share |
-$0.03 |
|
-$0.01 |
$1.89 |
|
$2.07 |
|
|
|
|
|
|
|
|
|
|
*For detailed reconciliations of the Company’s 2018 operating
expectations, please see “Reconciliation of Non-GAAP Financial
Measures Included in 2018 Outlook”
Fourth Quarter 2017 Conference Call
The Company will host a conference call to
discuss these results at 9:00 a.m. Eastern Time on Thursday,
February 22, 2018. Hosting the call will be Mr. Jay H. Shah,
Chief Executive Officer, Mr. Neil H. Shah, President and Chief
Operating Officer, and Mr. Ashish Parikh, Chief Financial
Officer.
A live audio webcast of the conference call will
be available on the Company’s website at www.hersha.com. The
conference call can be accessed by dialing 1-800-239-9838 or
1-323-794-2551 for international participants. A replay of the call
will be available from 12:00 p.m. Eastern Time on Thursday,
February 22, 2018, through 11:59 pm Eastern Time on Thursday, March
8, 2018. The replay can be accessed by dialing 1-844-512-2921 or
1-412-317-6671 for international participants. The passcode for the
call and the replay is 9599894. A replay of the webcast will be
available on the Company’s website for a limited time.
About Hersha Hospitality
Trust
Hersha Hospitality Trust (HT) is a self-advised
real estate investment trust in the hospitality sector, which owns
and operates high quality upscale hotels in urban gateway markets
and coastal destinations. The Company's 49 hotels totaling 7,584
rooms are located in New York, Washington, DC, Boston,
Philadelphia, South Florida and select markets on the West Coast.
The Company's common shares are traded on The New York Stock
Exchange under the ticker “HT.”
Non-GAAP Financial Measures
An explanation of Funds from Operations (“FFO”),
AFFO, Earnings Before Interest, Taxes, Depreciation and
Amortization (“EBITDA”), Adjusted EBITDA and Hotel EBITDA, as well
as reconciliations of such non-GAAP financial measures to the most
directly comparable U.S. GAAP measures, is included at the end of
this release.
Cautionary Statements Regarding Forward
Looking Statements
Certain matters within this press release are
discussed using “forward-looking statements” within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act 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 statements. These forward-looking statements may
include statements related to, among other things: the Company’s
2018 outlook for net income attributable to common shareholders,
net income per weighted average common share and OP Units
outstanding, Adjusted EBITDA, AFFO, AFFO per weighted average
common share and OP Units outstanding, consolidated and comparable
RevPAR growth and consolidated and comparable Hotel EBITDA margin
growth, economic and other assumptions underlying the Company’s
2018 outlook and assumptions regarding economic growth, labor
markets, real estate values, lodging fundamentals, and the economic
vibrancy of our target markets, the Company’s ability to grow
operating cash flow, return capital to its shareholders, whether in
the form of increased dividends or otherwise, the Company’s ability
to match or outperform its competitors’ performance, the ability of
the Company’s hotels to achieve stabilized or projected revenue
consistent with our expectations, the stability of the lodging
industry and the markets in which the Company’s hotel properties
are located, the Company’s ability to generate internal and
external growth, the Company’s ability to reopen hotels damaged by
Hurricane Irma on the terms and timing it expects, the recovery of
the South Florida leisure market and the timing of the reopening of
the Miami Beach Convention Center, the Company’s expectations
regarding foreign exchange rates and the Company’s ability to
increase margins, including hotel EBITDA margins. Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on the Company’s current
beliefs, expectations and assumptions regarding the future of its
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of the
Company’s control. The Company’s actual results and financial
condition may differ materially from those indicated in the
forward-looking statements contained in this press release.
Therefore, you should not rely on any of these forward-looking
statements. For a description of factors that may cause the
Company’s actual results or performance to differ from its
forward-looking statements, please review the information under the
heading “Risk Factors” included in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2017 filed by the Company
with the Securities and Exchange Commission (“SEC”) and other
documents filed by the Company with the SEC from time to
time. All information provided in this press release, unless
otherwise stated, is as of February 21, 2018, and the Company
undertakes no duty to update this information unless required by
law.
HERSHA HOSPITALITY TRUST |
|
|
|
|
|
|
|
Balance Sheet (unaudited) |
|
|
|
|
|
|
|
(in
thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
Assets: |
|
|
|
|
|
|
|
Investment in Hotel Properties, Net of Accumulated
Depreciation |
|
$ |
2,009,572 |
|
|
$ |
1,767,570 |
|
|
Investment in Unconsolidated Joint Ventures |
|
|
3,569 |
|
|
|
11,441 |
|
|
Cash and
Cash Equivalents |
|
|
17,945 |
|
|
|
185,644 |
|
|
Escrow
Deposits |
|
|
7,641 |
|
|
|
8,993 |
|
|
Hotel
Accounts Receivable, Net of Allowance for Doubtful Accounts of $49
and $91 |
|
|
11,999 |
|
|
|
8,769 |
|
|
Due from
Related Parties |
|
|
5,322 |
|
|
|
18,332 |
|
|
Intangible Assets, Net of Accumulated Amortization of $6,598 and
$4,532 |
|
|
16,388 |
|
|
|
16,944 |
|
|
Other
Assets |
|
|
49,913 |
|
|
|
39,370 |
|
|
Hotel
Assets Held for Sale |
|
|
15,987 |
|
|
|
98,473 |
|
|
Total
Assets |
|
$ |
2,138,336 |
|
|
$ |
2,155,536 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
|
|
Line of
Credit |
|
$ |
16,100 |
|
|
$ |
- |
|
|
Unsecured
Term Loan, Net of Unamortized Deferred Financing Costs |
|
|
715,449 |
|
|
|
663,500 |
|
|
Unsecured
Notes Payable, Net of Unamortized Deferred Financing Costs |
|
|
53,781 |
|
|
|
50,578 |
|
|
Mortgages
Payable, Net of Unamortized Premium and Unamortized Deferred
Financing Costs |
|
|
307,683 |
|
|
|
337,821 |
|
|
Accounts
Payable, Accrued Expenses and Other Liabilities |
|
|
58,770 |
|
|
|
65,106 |
|
|
Dividends
and Distributions Payable |
|
|
17,115 |
|
|
|
26,050 |
|
|
Liabilities Related to Hotel Assets Held for Sale |
|
|
- |
|
|
|
51,428 |
|
|
Deferred
Gain on Disposition of Hotel Assets |
|
|
81,284 |
|
|
|
81,314 |
|
|
Total
Liabilities |
|
$ |
1,250,182 |
|
|
$ |
1,275,797 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
Preferred
Shares: $.01 Par Value, 29,000,000 Shares Authorized,
3,000,000 Series C, 7,701,700 Series D and 4,000,000 Series E
Shares Issued and Outstanding at December 31, 2017, and
3,000,000 Series C, 7,700,000 Series D and 4,000,000 Series
E Shares Issued and Outstanding at December 31, 2016, with
Liquidation Preferences of $25 Per Share |
|
$ |
147 |
|
|
$ |
147 |
|
|
Common
Shares: Class A, $0.01 Par Value, 104,000,000 Shares
Authorized at December 31, 2017 and and 90,000,000 Shares
Authorized at December 31, 2016; 39,916,661 and 41,770,514
Shares Issued and Outstanding at December 31, 2017 and
December 31, 2016, respectively |
|
|
399 |
|
|
|
418 |
|
|
Common
Shares: Class B, $0.01 Par Value, 1,000,000 Shares
Authorized, None Issued and Outstanding at December 31, 2017
and December 31, 2016 |
|
|
- |
|
|
|
- |
|
|
Accumulated Other Comprehensive Income |
|
|
3,749 |
|
|
|
1,373 |
|
|
Additional Paid-in Capital |
|
|
1,164,946 |
|
|
|
1,198,311 |
|
|
Distributions in Excess of Net Income |
|
|
(335,373 |
) |
|
|
(364,831 |
) |
|
Total
Shareholders' Equity |
|
|
833,868 |
|
|
|
835,418 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests - Common Units and LTIP Units |
|
|
54,286 |
|
|
|
44,321 |
|
|
|
|
|
|
|
|
|
|
Total
Equity |
|
|
888,154 |
|
|
|
879,739 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Equity |
|
$ |
2,138,336 |
|
|
$ |
2,155,536 |
|
|
|
|
|
|
|
|
|
|
HERSHA
HOSPITALITY TRUST |
|
|
|
|
|
|
|
|
|
|
|
|
Summary Results
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
$ |
98,224 |
|
|
$ |
96,113 |
|
|
$ |
411,149 |
|
|
$ |
408,844 |
|
|
Food
& Beverage |
|
17,970 |
|
|
|
9,795 |
|
|
|
58,491 |
|
|
|
35,366 |
|
|
Other
Operating Revenues |
|
6,468 |
|
|
|
5,470 |
|
|
|
27,500 |
|
|
|
22,160 |
|
|
Other
Revenue |
|
- |
|
|
|
67 |
|
|
|
1,097 |
|
|
|
259 |
|
|
Total
Revenues |
|
122,662 |
|
|
|
111,445 |
|
|
|
498,237 |
|
|
|
466,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
21,840 |
|
|
|
21,234 |
|
|
|
90,716 |
|
|
|
89,055 |
|
|
Food
& Beverage |
|
13,984 |
|
|
|
8,327 |
|
|
|
47,906 |
|
|
|
29,566 |
|
|
Other
Operating Revenues |
|
38,520 |
|
|
|
34,998 |
|
|
|
156,428 |
|
|
|
144,335 |
|
|
Hotel
Ground Rent |
|
867 |
|
|
|
924 |
|
|
|
3,460 |
|
|
|
3,600 |
|
|
Real Estate and Personal Property Taxes and Property
Insurance |
8,187 |
|
|
|
7,745 |
|
|
|
32,300 |
|
|
|
32,157 |
|
|
General
and Administrative |
|
3,593 |
|
|
|
4,934 |
|
|
|
14,267 |
|
|
|
16,396 |
|
|
Share
Based Compensation |
|
3,818 |
|
|
|
2,255 |
|
|
|
9,286 |
|
|
|
8,048 |
|
|
Acquisition and Terminated Transaction Costs |
|
82 |
|
|
|
827 |
|
|
|
2,203 |
|
|
|
2,560 |
|
|
Depreciation and Amortization |
|
22,518 |
|
|
|
18,131 |
|
|
|
83,752 |
|
|
|
75,390 |
|
|
Property
Losses in Excess of Insurance Recoveries |
|
456 |
|
|
|
- |
|
|
|
4,268 |
|
|
|
- |
|
|
Loss on
Impairment of Assets |
|
4,082 |
|
|
|
- |
|
|
|
4,082 |
|
|
|
- |
|
|
Total
Operating Expenses |
|
117,947 |
|
|
|
99,375 |
|
|
|
448,668 |
|
|
|
401,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
4,715 |
|
|
|
12,070 |
|
|
|
49,569 |
|
|
|
65,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income |
|
34 |
|
|
|
143 |
|
|
|
271 |
|
|
|
362 |
|
|
Interest
Expense |
|
(11,082 |
) |
|
|
(10,425 |
) |
|
|
(42,662 |
) |
|
|
(44,352 |
) |
|
Other
Income (Expense) |
|
9 |
|
|
|
(97 |
) |
|
|
(771 |
) |
|
|
(961 |
) |
|
Gain on
Disposition of Hotel Properties |
|
806 |
|
|
|
21,000 |
|
|
|
90,350 |
|
|
|
115,839 |
|
|
Lease
Buyout |
|
(26 |
) |
|
|
(16,831 |
) |
|
|
268 |
|
|
|
(16,831 |
) |
|
Loss on
Debt Extinguishment |
|
(4 |
) |
|
|
(111 |
) |
|
|
(590 |
) |
|
|
(1,187 |
) |
|
(Loss) Income before
Results from Unconsolidated Joint Venture Investments and
Income Taxes |
|
(5,548 |
) |
|
|
5,749 |
|
|
|
96,435 |
|
|
|
118,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Joint
Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) from Unconsolidated Joint Ventures |
|
164 |
|
|
|
587 |
|
|
|
(2,473 |
) |
|
|
(1,823 |
) |
|
Gain from
Remeasurement of Investment in Unconsolidated Joint
Venture |
|
- |
|
|
|
- |
|
|
|
16,240 |
|
|
|
- |
|
|
Income (Loss) from
Unconsolidated Joint Venture Investments |
|
164 |
|
|
|
587 |
|
|
|
13,767 |
|
|
|
(1,823 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income before
Income Taxes |
|
(5,384 |
) |
|
|
6,336 |
|
|
|
110,202 |
|
|
|
116,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax (Expense) Benefit |
|
(3,682 |
) |
|
|
375 |
|
|
|
(5,262 |
) |
|
|
4,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income |
|
(9,066 |
) |
|
|
6,711 |
|
|
|
104,940 |
|
|
|
121,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
(Income) Allocated to Noncontrolling Interests |
|
776 |
|
|
|
(204 |
) |
|
|
(5,072 |
) |
|
|
(4,477 |
) |
|
Preferred
Distributions |
|
(6,045 |
) |
|
|
(5,374 |
) |
|
|
(24,169 |
) |
|
|
(17,380 |
) |
|
Extinguishment of Issuance Costs Upon Redemption of
Preferred Shares |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income
Applicable to Common Shareholders |
$ |
(14,335 |
) |
|
$ |
1,133 |
|
|
$ |
75,699 |
|
|
$ |
95,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income
Applicable to Common Shareholders |
$ |
(0.36 |
) |
|
$ |
0.02 |
|
|
$ |
1.82 |
|
|
$ |
2.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED |
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Income
Applicable to Common Shareholders |
$ |
(0.36 |
) |
|
$ |
0.02 |
|
|
$ |
1.79 |
|
|
$ |
2.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common
Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
40,529,569 |
|
|
|
41,733,272 |
|
|
|
41,423,804 |
|
|
|
42,957,199 |
|
|
Diluted |
|
40,529,569 |
|
|
|
42,282,340 |
|
|
|
42,056,431 |
|
|
|
43,530,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
FFO and AFFO
The National Association of Real Estate
Investment Trusts (“NAREIT”) developed Funds from Operations
(“FFO”) as a non-GAAP financial measure of performance of an equity
REIT in order to recognize that income-producing real estate
historically has not depreciated on the basis determined under
GAAP. We calculate FFO applicable to common shares and Common Units
in accordance 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 loss from impairment of assets and
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Our interpretation
of the NAREIT definition is that non-controlling interest in net
income (loss) should be added back to (deducted from) net income
(loss) as part of reconciling net income (loss) to FFO. Our FFO
computation may not be comparable to FFO reported by other REITs
that do not compute 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
shareholders, includes loss from the impairment of certain
depreciable assets, our investment in unconsolidated joint ventures
and land, depreciation and amortization expenses, gains or losses
on property sales, non-controlling interest and preferred
dividends. In computing FFO, we eliminate these items because, in
our view, they are not indicative of the results from our property
operations. We determined that the loss from the impairment
of certain depreciable assets, including investments in
unconsolidated joint ventures and land, was driven by a measurable
decrease in the fair value of certain hotel properties and other
assets as determined by our analysis of those assets in accordance
with applicable GAAP. As such, these impairments have been
eliminated from net income (loss) to determine FFO.
Hersha also presents Adjusted Funds from
Operations (AFFO), which reflects FFO in accordance with the NAREIT
definition further adjusted by:
- adding back non-cash share based compensation expense;
- adding back acquisition and terminated transaction
expenses;
- adding back contingent considerations;
- adding back amortization of deferred financing costs;
- adding back adjustments for the amortization of discounts and
premiums;
- adding back write-offs of deferred financing costs on debt
extinguishment, both for consolidated and unconsolidated
properties;
- adding back straight-line amortization of ground lease expense
and prior period tax assessment expenses; and
- adding back unconsolidated joint venture management company
transaction costs and state and local tax expense related to prior
period assessment.
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 the
Company’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 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 performance measures.
We evaluate our performance by reviewing AFFO, in addition to
FFO, because we believe that adjusting FFO to exclude certain
recurring and non-recurring items as described above provides
useful supplemental information regarding our ongoing operating
performance and that the presentation of AFFO, when combined with
the primary GAAP presentation of net income (loss), more completely
describes our operating performance. 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 OP Units because our OP Units
are redeemable for common shares. We believe it is meaningful
for the investor to understand FFO and AFFO applicable to all
common shares and OP Units. Certain amounts related to
depreciation and amortization and depreciation and amortization
from discontinued operations in the prior year FFO reconciliation
have been recast to conform to the current year presentation.
In addition, based on guidance provided by NAREIT, we have
eliminated loss from the impairment of certain depreciable assets,
including investments in unconsolidated joint ventures and land,
from net (income) loss to arrive at FFO in each year
presented.
The following table reconciles FFO and AFFO for
the periods presented to the most directly comparable GAAP measure,
net income (loss) applicable to common shares, for the same
periods:
HERSHA HOSPITALITY TRUST |
|
|
|
|
|
|
|
|
|
|
|
|
Funds from Operations (FFO) and Adjusted Funds from
Operations (AFFO) |
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income applicable to common shares |
|
$ |
|
(14,335 |
) |
|
$ |
|
1,133 |
|
|
$ |
|
75,699 |
|
|
$ |
95,579 |
|
(Loss) income allocated to noncontrolling interest |
|
|
|
(776 |
) |
|
|
|
204 |
|
|
|
|
5,072 |
|
|
|
4,477 |
|
(Income) loss from unconsolidated joint ventures |
|
|
|
(164 |
) |
|
|
|
(587 |
) |
|
|
|
(13,767 |
) |
|
|
1,823 |
|
Gain on disposition of hotel properties |
|
|
|
(806 |
) |
|
|
|
(21,000 |
) |
|
|
|
(90,350 |
) |
|
|
(115,839 |
) |
Loss from impairment of depreciable assets |
|
|
|
3,869 |
|
|
|
|
- |
|
|
|
|
5,926 |
|
|
|
- |
|
Depreciation and amortization |
|
|
|
22,518 |
|
|
|
|
18,131 |
|
|
|
|
83,752 |
|
|
|
75,390 |
|
Funds from consolidated hotel operations applicable to common
shares and Partnership units |
|
|
|
10,306 |
|
|
|
|
(2,119 |
) |
|
|
|
66,332 |
|
|
|
61,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from unconsolidated joint venture
investments |
|
|
|
164 |
|
|
|
|
587 |
|
|
|
|
13,767 |
|
|
|
(1,823 |
) |
Income from remeasurement of investment in unconsolidated joint
ventures |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
(16,240 |
) |
|
|
- |
|
Depreciation and amortization of difference between purchase
price and historical cost |
|
|
|
(302 |
) |
|
|
|
(225 |
) |
|
|
|
(1,207 |
) |
|
|
(418 |
) |
Interest in depreciation and amortization of unconsolidated
joint ventures |
|
|
|
2,751 |
|
|
|
|
3,421 |
|
|
|
|
11,366 |
|
|
|
14,819 |
|
Funds from unconsolidated joint venture operations applicable
to common shares and Partnership units |
|
|
|
2,613 |
|
|
|
|
3,783 |
|
|
|
|
7,686 |
|
|
|
12,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from
Operations applicable to common shares and Partnership units |
|
|
|
12,919 |
|
|
|
|
1,664 |
|
|
|
|
74,018 |
|
|
|
74,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Loss on remediation of hurricane damage, excluding impairment
of depreciable assets |
|
669 |
|
|
|
|
- |
|
|
|
|
2,424 |
|
|
|
- |
|
Lease Buyout |
|
|
|
26 |
|
|
|
|
16,831 |
|
|
|
|
(268 |
) |
|
|
16,831 |
|
Non-cash extinguishment of issuance costs upon redemption of
Preferred Shares |
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
4,021 |
|
Non-cash share based compensation expense |
|
|
|
3,818 |
|
|
|
|
2,255 |
|
|
|
|
9,286 |
|
|
|
8,048 |
|
Acquisition and terminated transaction costs |
|
|
|
82 |
|
|
|
|
827 |
|
|
|
|
2,203 |
|
|
|
2,560 |
|
Tax expense related change in tax law and gain from
remeasurement of investment in unconsolidated joint venture |
|
|
|
2,856 |
|
|
|
|
- |
|
|
|
|
4,689 |
|
|
|
- |
|
Amortization of deferred financing costs |
|
|
|
561 |
|
|
|
|
679 |
|
|
|
|
2,278 |
|
|
|
2,624 |
|
Interest in amortization of deferred financing costs of
unconsolidated joint venture |
|
371 |
|
|
|
|
389 |
|
|
|
|
1,476 |
|
|
|
987 |
|
Amortization of discounts and premiums |
|
|
|
(127 |
) |
|
|
|
(174 |
) |
|
|
|
(604 |
) |
|
|
(1,265 |
) |
Deferred financing costs and debt premium written off in debt
extinguishment |
|
|
4 |
|
|
|
|
111 |
|
|
|
|
590 |
|
|
|
1,187 |
|
Straight-line amortization of ground lease expense |
|
|
|
232 |
|
|
|
|
159 |
|
|
|
|
834 |
|
|
|
640 |
|
State and local tax expense related to reassessment of prior
period assessment |
|
|
|
- |
|
|
|
|
292 |
|
|
|
|
- |
|
|
|
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Funds from Operations |
|
$ |
|
21,411 |
|
|
$ |
|
23,033 |
|
|
$ |
|
96,926 |
|
|
$ |
109,803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per
Diluted Weighted Average Common Shares and Partnership Units
Outstanding |
|
$ |
|
0.48 |
|
|
$ |
|
0.52 |
|
|
$ |
|
2.16 |
|
|
$ |
2.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Weighted Average Common Shares and Partnership Units
Outstanding |
|
|
|
44,152,788 |
|
|
|
|
44,636,006 |
|
|
|
|
44,834,724 |
|
|
|
45,740,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Adjusted 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. Our interpretation of Adjusted EBITDA is that
EBITDA derived from our investment in unconsolidated joint ventures
should be added back to net income (loss) as part of reconciling
net income (loss) to Adjusted EBITDA. Our Adjusted EBITDA
computation may not be comparable to EBITDA or Adjusted EBITDA
reported by other companies that interpret the definition of EBITDA
differently than we do. Management believes Adjusted EBITDA to be a
meaningful measure of a REIT's performance because it is widely
followed by industry analysts, lenders and investors and that it
should be considered along with, but not as an alternative to, GAAP
net income (loss) as a measure of the Company's operating
performance.
HERSHA
HOSPITALITY TRUST |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
applicable to common shareholders |
|
$ |
|
(14,335 |
) |
|
$ |
1,133 |
|
|
$ |
|
75,699 |
|
|
$ |
95,579 |
|
|
(Loss)
income allocated to noncontrolling interest |
|
|
|
(776 |
) |
|
|
204 |
|
|
|
|
5,072 |
|
|
|
4,477 |
|
|
(Income)
loss from unconsolidated joint ventures |
|
|
|
(164 |
) |
|
|
(587 |
) |
|
|
|
(13,767 |
) |
|
|
1,823 |
|
|
Gain on
disposition of hotel properties |
|
|
|
(806 |
) |
|
|
(21,000 |
) |
|
|
|
(90,350 |
) |
|
|
(115,839 |
) |
|
Property
losses in excess of insurance recoveries and impairment of
assets |
|
|
|
4,538 |
|
|
|
- |
|
|
|
|
8,350 |
|
|
|
- |
|
|
Non-operating interest income |
|
|
|
(34 |
) |
|
|
(143 |
) |
|
|
|
(271 |
) |
|
|
(362 |
) |
|
Distributions to Preferred Shareholders |
|
|
|
6,045 |
|
|
|
5,374 |
|
|
|
|
24,169 |
|
|
|
17,380 |
|
|
Interest
expense |
|
|
|
11,082 |
|
|
|
10,425 |
|
|
|
|
42,662 |
|
|
|
44,352 |
|
|
Extinguishment of issuance costs upon redemption of Preferred
Shares |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
4,021 |
|
|
Income
tax expense (benefit) |
|
|
|
3,682 |
|
|
|
(375 |
) |
|
|
|
5,262 |
|
|
|
(4,888 |
) |
|
Deferred
financing costs and debt premium written off in debt
extinguishment |
|
|
|
4 |
|
|
|
111 |
|
|
|
|
590 |
|
|
|
1,187 |
|
|
Depreciation and amortization |
|
|
|
22,518 |
|
|
|
18,131 |
|
|
|
|
83,752 |
|
|
|
75,390 |
|
|
Acquisition and terminated transaction costs |
|
|
|
82 |
|
|
|
827 |
|
|
|
|
2,203 |
|
|
|
2,560 |
|
|
Lease
Buyout |
|
|
|
26 |
|
|
|
16,831 |
|
|
|
|
(268 |
) |
|
|
16,831 |
|
|
Non-cash
share based compensation expense |
|
|
|
3,818 |
|
|
|
2,255 |
|
|
|
|
9,286 |
|
|
|
8,048 |
|
|
Straight-line amortization of ground lease expense |
|
|
|
232 |
|
|
|
159 |
|
|
|
|
834 |
|
|
|
640 |
|
|
Unconsolidated joint venture management company transition costs
and state and local tax expense related to reassessment of prior
period assessment |
|
|
|
- |
|
|
|
292 |
|
|
|
|
- |
|
|
|
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA from consolidated hotel operations |
|
|
|
35,912 |
|
|
|
33,637 |
|
|
|
|
153,223 |
|
|
|
151,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from unconsolidated joint venture investments |
|
|
|
164 |
|
|
|
587 |
|
|
|
|
13,767 |
|
|
|
(1,823 |
) |
|
Gain on
remeasurement of investment in unconsolidated joint venture |
|
|
|
- |
|
|
|
- |
|
|
|
|
(16,240 |
) |
|
|
- |
|
|
Depreciation and amortization of difference between purchase price
and historical cost |
|
|
|
(302 |
) |
|
|
(225 |
) |
|
|
|
(1,207 |
) |
|
|
(418 |
) |
|
Adjustment for interest in interest expense, depreciation and
amortization of unconsolidated joint ventures |
|
|
|
4,442 |
|
|
|
5,440 |
|
|
|
|
17,821 |
|
|
|
22,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA from unconsolidated joint venture operations |
|
|
|
4,304 |
|
|
|
5,802 |
|
|
|
|
14,141 |
|
|
|
20,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
|
40,216 |
|
|
$ |
39,439 |
|
|
$ |
|
167,364 |
|
|
$ |
171,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel EBITDA
Hotel EBITDA is a commonly used measure of
performance in the hotel industry for a specific hotel or group of
hotels. We believe Hotel EBITDA provides a more complete
understanding of the operating results of the individual hotel or
group of hotels. We calculate Hotel EBITDA by utilizing the total
revenues generated from hotel operations less all operating
expenses, property taxes, insurance and management fees, which
calculation excludes Company expenses not specific to a hotel, such
as corporate overhead. Because Hotel EBITDA is specific to
individual hotels or groups of hotels and not to the Company as a
whole, it is not directly comparable to any GAAP measure. In
addition, our Hotel EBITDA computation may not be comparable to
Hotel EBITDA or other similar metrics reported by other companies
that interpret the definition of Hotel EBITDA differently than we
do. Management believes Hotel EBITDA to be a meaningful measure of
performance of a portfolio of hotels because it is followed by
industry analysts, lenders and investors and that it should be
considered along with, but not as an alternative to, operating
income (loss) as reported in our unaudited summary results as a
measure of our hotel portfolio’s operating performance.
HERSHA
HOSPITALITY TRUST |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
4,715 |
|
|
$ |
12,070 |
|
|
$ |
49,569 |
|
|
$ |
65,522 |
|
|
Other
revenue |
|
|
- |
|
|
|
(67 |
) |
|
|
(1,097 |
) |
|
|
(259 |
) |
|
Depreciation and amortization |
|
|
22,518 |
|
|
|
18,131 |
|
|
|
83,752 |
|
|
|
75,390 |
|
|
General
and administrative |
|
|
3,593 |
|
|
|
4,934 |
|
|
|
14,267 |
|
|
|
16,396 |
|
|
Share
based compensation |
|
|
3,818 |
|
|
|
2,255 |
|
|
|
9,286 |
|
|
|
8,048 |
|
|
Acquisition and terminated transaction costs |
|
|
82 |
|
|
|
827 |
|
|
|
2,203 |
|
|
|
2,560 |
|
|
Property
losses in excess of insurance recoveries and impairment of
assets |
|
|
4,538 |
|
|
|
- |
|
|
|
8,350 |
|
|
|
- |
|
|
Straight-line amortization of ground lease expense |
|
|
232 |
|
|
|
159 |
|
|
|
834 |
|
|
|
640 |
|
|
Other |
|
|
(94 |
) |
|
|
127 |
|
|
|
306 |
|
|
|
(273 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA |
|
$ |
39,402 |
|
|
$ |
38,436 |
|
|
$ |
167,470 |
|
|
$ |
168,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures Included
in 2018 Outlook
Funds from
Operations (FFO) and Adjusted Funds from Operations
(AFFO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 Outlook |
(in millions, except
shares and per share data) |
|
Low |
High |
Net
income applicable to common shares |
$ |
21.0 |
|
$ |
29.0 |
|
Income
allocated to noncontrolling interest |
|
1.7 |
|
|
2.3 |
|
Income
from unconsolidated joint ventures |
|
(44.8 |
) |
|
(44.8 |
) |
Gain on
disposition of hotel properties |
|
(2.5 |
) |
|
(2.5 |
) |
Depreciation and amortization |
|
87.7 |
|
|
87.7 |
|
Funds
from consolidated hotel operations applicable to common
shares and Partnership units |
|
63.1 |
|
|
71.7 |
|
|
|
|
|
|
Income
from unconsolidated joint venture investments |
|
44.8 |
|
|
44.8 |
|
Income
from remeasurement of investment in unconsolidated joint
ventures |
|
(43.0 |
) |
|
(43.0 |
) |
Depreciation and amortization of difference between purchase
price and historical cost |
|
(1.2 |
) |
|
(1.2 |
) |
Interest
in depreciation and amortization of unconsolidated joint
ventures |
|
4.6 |
|
|
4.6 |
|
Funds
from unconsolidated joint venture operations applicable to
common shares and Partnership units |
|
5.2 |
|
|
5.2 |
|
|
|
|
|
|
Funds from Operations
applicable to common shares and Partnership units |
|
68.3 |
|
|
76.9 |
|
|
|
|
|
|
Add: |
|
|
|
|
Non-cash
share based compensation expense |
|
9.3 |
|
|
9.3 |
|
Amortization of deferred financing costs |
|
2.2 |
|
|
2.2 |
|
Interest
in amortization of deferred financing costs of unconsolidated joint
venture |
|
1.0 |
|
|
1.0 |
|
Amortization of discounts and premiums |
|
(0.5 |
) |
|
(0.5 |
) |
Straight-line amortization of ground lease expense |
|
0.9 |
|
|
0.9 |
|
Other |
|
0.8 |
|
|
0.1 |
|
Adjusted Funds from
Operations |
$ |
82.0 |
|
$ |
90.0 |
|
|
|
|
|
|
AFFO per Diluted
Weighted Average Common Shares and Partnership Units
Outstanding |
$ |
1.89 |
|
$ |
2.07 |
|
|
|
|
|
|
Diluted Weighted
Average Common Shares and Partnership Units Outstanding |
|
43.5 |
|
|
43.5 |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
2018 Outlook |
($'s in
millions except per share amounts) |
Low |
High |
Net
income |
$ |
21.0 |
|
$ |
29.0 |
|
|
Income allocated to
noncontrolling interest |
|
1.7 |
|
|
2.3 |
|
|
Income from
unconsolidated joint ventures |
|
(44.8 |
) |
|
(44.8 |
) |
|
Gain on disposition of
hotel properties |
|
(2.5 |
) |
|
(2.5 |
) |
|
Non-operating interest
income |
|
(0.1 |
) |
|
(0.1 |
) |
|
Distributions to
Preferred Shareholders |
|
24.2 |
|
|
24.2 |
|
|
Interest expense |
|
46.1 |
|
|
46.1 |
|
|
Income tax expense
(benefit) |
|
1.5 |
|
|
2.5 |
|
|
Depreciation and
amortization |
|
87.7 |
|
|
87.7 |
|
|
Non-cash share based
compensation expense |
|
9.3 |
|
|
9.3 |
|
|
Straight-line
amortization of ground lease expense |
|
0.9 |
|
|
0.9 |
|
|
Other |
|
1.1 |
|
|
(0.5 |
) |
Adjusted
EBITDA from consolidated hotel operations |
|
146.0 |
|
|
154.1 |
|
|
|
|
|
|
|
Income from
unconsolidated joint venture investments |
|
44.8 |
|
|
44.8 |
|
|
Gain on remeasurement
of investment in unconsolidated joint ventures |
|
(43.0 |
) |
|
(43.0 |
) |
|
Depreciation and
amortization of difference between purchase price and historical
cost |
|
(1.2 |
) |
|
(1.2 |
) |
|
Adjustment for interest
in interest expense, depreciation and amortization of
unconsolidated joint ventures |
|
12.3 |
|
|
12.3 |
|
Adjusted
EBITDA from unconsolidated joint venture operations |
|
13.0 |
|
|
13.0 |
|
Adjusted
EBITDA |
$ |
159.0 |
|
$ |
167.0 |
|
|
|
|
|
|
|
Funds from
Operations (FFO) and Adjusted Funds from Operations
(AFFO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 Outlook |
(in millions, except
shares and per share data) |
|
Low |
High |
Net
income applicable to common shares |
$ |
18.9 |
|
$ |
19.9 |
|
Income
allocated to noncontrolling interest |
|
1.5 |
|
|
1.6 |
|
Income
from unconsolidated joint ventures |
|
(42.8 |
) |
|
(42.8 |
) |
Gain on
disposition of hotel properties |
|
(2.5 |
) |
|
(2.5 |
) |
Depreciation and amortization |
|
22.2 |
|
|
22.2 |
|
Funds
from consolidated hotel operations applicable to common
shares and Partnership units |
|
(2.7 |
) |
|
(1.7 |
) |
|
|
|
|
|
Income
from unconsolidated joint venture investments |
|
42.8 |
|
|
42.8 |
|
Income
from remeasurement of investment in unconsolidated joint
ventures |
|
(43.0 |
) |
|
(43.0 |
) |
Depreciation and amortization of difference between purchase price
and historical cost |
|
(0.6 |
) |
|
(0.6 |
) |
Interest
in depreciation and amortization of unconsolidated joint
ventures |
|
0.0 |
|
|
0.0 |
|
Funds
from unconsolidated joint venture operations applicable to
common shares and Partnership units |
|
(0.7 |
) |
|
(0.7 |
) |
|
|
|
|
|
Funds from Operations
applicable to common shares and Partnership units |
|
(3.4 |
) |
|
(2.3 |
) |
|
|
|
|
|
Add: |
|
|
|
|
Non-cash
share based compensation expense |
|
1.1 |
|
|
1.1 |
|
Amortization of deferred financing costs |
|
0.6 |
|
|
0.6 |
|
Interest
in amortization of deferred financing costs of unconsolidated joint
venture |
|
0.3 |
|
|
0.3 |
|
Amortization of discounts and premiums |
|
(0.1 |
) |
|
(0.1 |
) |
Straight-line amortization of ground lease expense |
|
0.3 |
|
|
0.2 |
|
Adjusted Funds from
Operations |
$ |
(1.3 |
) |
$ |
(0.3 |
) |
|
|
|
|
|
AFFO per Diluted
Weighted Average Common Shares and Partnership Units
Outstanding |
$ |
(0.03 |
) |
$ |
(0.01 |
) |
|
|
|
|
|
Diluted Weighted
Average Common Shares and Partnership Units Outstanding |
|
43.4 |
|
|
43.4 |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
Q1 2018 Outlook |
($'s in
millions except per share amounts) |
Low |
High |
Net
income |
$ |
18.9 |
|
$ |
19.9 |
|
|
Income allocated to
noncontrolling interest |
|
1.5 |
|
|
1.6 |
|
|
Income from
unconsolidated joint ventures |
|
(42.8 |
) |
|
(42.8 |
) |
|
Gain on disposition of
hotel properties |
|
(2.5 |
) |
|
(2.5 |
) |
|
Non-operating interest
income |
|
(0.0 |
) |
|
(0.0 |
) |
|
Distributions to
Preferred Shareholders |
|
6.0 |
|
|
6.0 |
|
|
Interest expense |
|
11.3 |
|
|
11.3 |
|
|
Income tax expense
(benefit) |
|
1.1 |
|
|
1.1 |
|
|
Depreciation and
amortization |
|
22.2 |
|
|
22.2 |
|
|
Non-cash share based
compensation expense |
|
1.1 |
|
|
1.1 |
|
|
Straight-line
amortization of ground lease expense |
|
0.2 |
|
|
0.2 |
|
|
Other |
|
0.1 |
|
|
- |
|
Adjusted
EBITDA from consolidated hotel operations |
|
17.1 |
|
|
18.1 |
|
|
|
|
|
|
|
Income from
unconsolidated joint venture investments |
|
42.8 |
|
|
42.8 |
|
|
Gain on remeasurement
of investment in unconsolidated joint ventures |
|
(43.0 |
) |
|
(43.0 |
) |
|
Depreciation and
amortization of difference between purchase price and historical
cost |
|
(0.3 |
) |
|
(0.3 |
) |
|
Adjustment for interest
in interest expense, depreciation and amortization of
unconsolidated joint ventures |
|
1.6 |
|
|
1.6 |
|
Adjusted
EBITDA from unconsolidated joint venture operations |
|
1.1 |
|
|
1.1 |
|
Adjusted
EBITDA |
$ |
18.2 |
|
$ |
19.2 |
|
|
|
|
|
|
|
Supplemental Schedules
The Company has published supplemental earnings
schedules in order to provide additional disclosure and financial
information for the benefit of the Company’s stakeholders.
These can be found in the Investor Relations section and the “SEC
Filings and Presentations” page of the Company’s website,
www.hersha.com.
Contact: Ashish Parikh, Chief Financial
OfficerGreg Costa, Manager of Investor Relations &
FinancePhone: 215-238-1046
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