Hersha Hospitality Trust (NYSE: HT) (“Hersha,” “Company,” “we” or
“our”), owner of high-quality upscale and lifestyle hotels in urban
gateway markets and resort destinations, today announced results
for the first quarter ended March 31, 2020.
First Quarter 2020 Financial
Results
Net loss applicable to common shareholders was
approximately ($29.1 million), or ($0.76) per diluted common share,
in the first quarter 2020, compared to net loss applicable to
common shareholders of approximately ($13.0 million), or ($0.34)
per diluted common share, in the first quarter 2019. In spite
of a strong start, the decrease in first quarter 2020 net income
and net income per diluted common share is largely due to the
unprecedented impact on the travel industry from the COVID-19
pandemic.
AFFO in the first quarter 2020 decreased by $8.7
million, or 138.1%, to ($2.4 million), compared to $6.3 million in
the first quarter 2019. AFFO per diluted common share and OP
Unit in the first quarter 2020 was ($0.06). 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.
Mr. Jay H. Shah, Hersha’s Chief Executive
Officer, stated, “Since our last earnings report just over two
months ago, the COVID-19 pandemic has delivered catastrophic impact
on the lodging industry. The first two months of 2020
exceeded our high expectations for our portfolio, generating strong
incremental EBITDA from the holistic renovations we undertook over
the last few years, led by our two largest EBITDA-producing assets
in South Florida. January and February gave us a glimpse of
the profitability of our newly-aligned comparable portfolio, which
grew RevPAR by 3.9% during that period. However, in March,
the novel Coronavirus outbreak led to a near immediate shutdown in
travel, resulting in an unimaginable impact to the lodging
sector. The deep and pervasive effects led us to immediately
pivot to a near-term operating strategy of curbing expenses and
boosting our liquidity. In close alignment with our
independent third-party management partners we implemented
significant on property cost cuts in real time. We also made
extensive corporate cost cuts expected to yield approximately 25%
in savings in SG&A expenses on an annualized basis for 2020.
At the hotel-level, the suspension of operations at 21 of our
48 hotels has resulted in an 80% reduction of on-property labor
costs. Employing a select-service model at the majority of
our assets, allows us to efficiently operate our hotels with a
skeleton crew, leading to a significant reduction in expenses while
also generating revenue through unique channels with medical
personnel, government agencies, emergency first responders, and law
enforcement.”
Mr. Shah continued, “We reached an agreement
with our bank group to amend our existing Bank Credit Facility to
access an additional $100 million on our $250 million Senior
Revolving Credit Facility. Our amendment also includes a
financial covenant holiday through March 31, 2021 yielding
operational and financial flexibility for the portfolio through
June 30, 2021. This liquidity, in addition to the revocation
and suspension of our common and preferred dividends, and our
expense mitigation strategies we have implemented, has
significantly boosted our liquidity profile. Despite
uncertainty for the lodging industry, we are confident in our
ability to navigate through this crisis to the other side with a
more efficiently-operated portfolio in the most valuable, sought
after real estate markets in the country and we remain ready to
welcome guests when demand for travel re-emerges across the coming
months.”
First Quarter 2020 Operating
Results
The Company’s portfolio markets were
significantly hampered by shelter-in-place orders and travel bans
enacted during March and led to double-digit RevPAR loss across its
clusters, excluding South Florida.
Revenue per available room (“RevPAR”) at the
Company's 38 comparable hotels decreased 22.4% to $127.25 in the
first quarter 2020. The Company’s average daily rate (“ADR”)
for the comparable hotel portfolio decreased 0.8% to $206.38, while
occupancy fell 1,714 basis points to 61.7%. Occupancy-driven
RevPAR loss for the quarter resulted in EBITDA margin loss of 840
basis points to 17.2%.
On a regional basis, the South Florida portfolio
was our best performing market during the first quarter with RevPAR
loss of 1.2%, highlighted by the Cadillac Hotel & Beach Club,
which generated 11.7% RevPAR growth for the quarter. The
hotel was able to capture significant rate growth during January
and February before the impact on travel from the COVID-19 pandemic
exacerbated in March, which resulted in 17.5% ADR growth to $327.64
during the first quarter.
Financing
The Company successfully amended its existing
Bank Credit Facility and Borrowing Base of Assets to access an
additional $100 million on the Company’s $250 million Senior
Revolving Line of Credit without any changes to the interest rate
on the Facility. The amendment also resulted in the Company
obtaining waivers on all financial covenants through March 31,
2021, yielding additional operational and financial
flexibility. The Company’s next financial covenant test will
take place on June 30, 2021.
The Company completed the first quarter 2020
with approximately $23.9 million of cash and cash
equivalents. As of March 31, 2020, 87.0% 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 3.87% and a
weighted average life-to-maturity of approximately 3.5 years.
Dividends
As a part of plans to preserve cash, the Company
suspended dividend distribution on its common shares, 6.875% Series
C Cumulative Redeemable Preferred Shares, 6.50% Series D Cumulative
Redeemable Preferred Shares and 6.50% Series E Cumulative
Redeemable Preferred Shares. Unpaid dividends on Hersha’s
preferred shares shall accrue without interest.
The Company will continue to review taxable
income on a regular basis and take measures, if necessary, to
ensure that it continues to meet the minimum distribution
requirements to maintain its status as a real estate investment
trust.
Full-Year 2020 Outlook
Due to the uncertainty surrounding the lodging
industry stemming from the COVID-19 pandemic, the Company has
suspended its full-year 2020 guidance.
First Quarter 2020 Conference
Call
The Company will host a conference call to
discuss these results at 9:00 AM Eastern Time on Thursday, May 7,
2020. 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 1-888-317-6003 or
1-412-317-6061 for international participants and entering the
passcode 1956895 approximately 10 minutes in advance of the
call. A replay of the call will be available from 11:00 AM
Eastern Time on Thursday, May 7, 2020, through 11:59 PM Eastern
Time on Saturday, June 6, 2020. The replay can be accessed by
dialing 1-877-344-7529 or 1-412-317-0088 for international
participants. The passcode for the replay is 10140184.
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 and lifestyle hotels in urban
gateway markets and resort destinations. The Company's 48
hotels totaling 7,644 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
Common key performance metrics utilized by the
lodging industry are occupancy, average daily rate (“ADR”), and
revenue per available room (“RevPAR”). Occupancy is
calculated as the percentage total rooms sold compared to rooms
available to be sold, while ADR measures the average rate earned
per occupied room, calculate as total room revenue divided by total
rooms sold. RevPAR is a derivative of these two metrics which
shows the total room revenue earned per room available to be
sold. Management uses these metrics in comparison to other
hotels in our self-defined competitive peer set within proximity to
each of our hotel properties.
An explanation of Funds from Operations (“FFO”),
AFFO, Earnings Before Interest, Taxes, Depreciation and
Amortization (“EBITDA”), EBITDAre, 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,” including those with
regard to the potential future impact of COVID-19, 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. One of the most significant
factors is the ongoing impact of the current outbreak of COVID-19
on the United States, regional and global economies, the broader
financial markets, the Company’s customers and employees,
governmental responses thereto and the operation changes the
Company has and may implement in response thereto. The
current outbreak of COVID-19 has also impacted, and is likely to
continue to impact, directly or indirectly, many of the other
important factors below. These forward-looking statements may
include statements related to, among other things: assumptions
regarding the impact to international and domestic business and
leisure travel pertaining to any pandemic or outbreak of disease,
including COVID-19, the uncertainty and economic impact of
pandemics, epidemics or other public health emergencies or fear of
such events, such as the recent outbreak of COVID-19, economic
growth, labor markets, real estate values, lodging fundamentals,
corporate travel, and the economic vibrancy of our target markets,
the Company’s ability to grow operating cash flow, the Company’s
ability to match or outperform its competitors’ performance, the
ability of the Company’s hotels to achieve stabilized or projected
revenue, cap rates or EBITDA multiples 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, 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, 2019 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, including the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2020. All information
provided in this press release, unless otherwise stated, is as of
May 6, 2020, 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
Assets: |
|
|
|
|
|
|
|
Investment in Hotel Properties, Net of Accumulated
Depreciation |
|
$ |
1,924,257 |
|
|
$ |
1,975,973 |
|
|
Investment in Unconsolidated Joint Ventures |
|
|
8,028 |
|
|
|
8,446 |
|
|
Cash and Cash Equivalents |
|
|
23,936 |
|
|
|
27,012 |
|
|
Escrow Deposits |
|
|
8,641 |
|
|
|
9,973 |
|
|
Hotel Accounts Receivable |
|
|
3,963 |
|
|
|
9,213 |
|
|
Due from Related Parties |
|
|
1,797 |
|
|
|
6,113 |
|
|
Intangible Assets, Net of Accumulated Amortization of $6,693 and
$6,545 |
|
|
1,989 |
|
|
|
2,137 |
|
|
Right of Use Assets |
|
|
45,075 |
|
|
|
45,384 |
|
|
Other Assets |
|
|
39,482 |
|
|
|
38,177 |
|
|
Hotel Assets Held for Sale |
|
|
41,193 |
|
|
|
- |
|
|
Total
Assets |
|
$ |
2,098,361 |
|
|
$ |
2,122,428 |
|
|
|
|
|
|
|
|
|
|
Liabilities
and Equity: |
|
|
|
|
|
|
|
Line of Credit |
|
$ |
70,000 |
|
|
$ |
48,000 |
|
|
Unsecured Term Loan, Net of Unamortized Deferred Financing
Costs |
|
|
697,390 |
|
|
|
697,183 |
|
|
Unsecured Notes Payable, Net of Unamortized Deferred Financing
Costs |
|
|
50,750 |
|
|
|
50,736 |
|
|
Mortgages Payable, Net of Unamortized Premium and Unamortized
Deferred Financing Costs |
|
|
331,982 |
|
|
|
332,280 |
|
|
Lease Liabilities |
|
|
54,386 |
|
|
|
54,548 |
|
|
Accounts Payable, Accrued Expenses and Other Liabilities |
|
|
74,699 |
|
|
|
47,626 |
|
|
Dividends and Distributions Payable |
|
|
- |
|
|
|
17,058 |
|
|
Total
Liabilities |
|
$ |
1,279,207 |
|
|
$ |
1,247,431 |
|
|
|
|
|
|
|
|
|
|
Redeemable
Noncontrolling Interest - Consolidated Joint Venture |
|
$ |
3,196 |
|
|
$ |
3,196 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
|
|
Preferred Shares: $.01 Par Value, 29,000,000 Shares Authorized,
3,000,000 Series C, 7,701,700 Series D and 4,001,514 Series E
Shares Issued and Outstanding at March 31, 2020 and December 31,
2019, with Liquidation Preferences of $25 Per Share |
|
$ |
147 |
|
|
$ |
147 |
|
|
Common Shares: Class A, $0.01 Par Value, 104,000,000 Shares
Authorized at March 31, 2020 and December 31, 2019; 38,673,242 and
38,652,650 Shares Issued and Outstanding at March 31, 2020 and
December 31, 2019, respectively |
|
|
387 |
|
|
|
387 |
|
|
Common Shares: Class B, $0.01 Par Value, 1,000,000 Shares
Authorized, None Issued and Outstanding at March 31, 2020 and
December 31, 2019 |
|
|
- |
|
|
|
- |
|
|
Accumulated Other Comprehensive Income |
|
|
(26,411 |
) |
|
|
1,010 |
|
|
Additional Paid-in Capital |
|
|
1,145,450 |
|
|
|
1,144,808 |
|
|
Distributions in Excess of Net Income |
|
|
(362,777 |
) |
|
|
(338,695 |
) |
|
Total Shareholders' Equity |
|
|
756,796 |
|
|
|
807,657 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests - Common Units and LTIP Units |
|
|
59,162 |
|
|
|
64,144 |
|
|
|
|
|
|
|
|
|
|
Total Equity |
|
|
815,958 |
|
|
|
871,801 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Equity |
|
$ |
2,098,361 |
|
|
$ |
2,122,428 |
|
|
|
|
|
|
|
|
|
|
HERSHA HOSPITALITY TRUST |
|
|
|
|
|
|
Summary Results (unaudited) |
|
|
|
|
|
|
(in
thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
|
Revenues: |
|
|
|
|
|
|
Hotel Operating Revenues: |
|
|
|
|
|
|
Room |
$ |
71,083 |
|
|
$ |
91,485 |
|
|
Food & Beverage |
|
10,075 |
|
|
|
14,228 |
|
|
Other Operating Revenues |
|
8,780 |
|
|
|
8,930 |
|
|
Total Hotel Operating Revenues |
|
89,938 |
|
|
|
114,643 |
|
|
Other Revenue |
|
199 |
|
|
|
150 |
|
|
Total
Revenues |
|
90,137 |
|
|
|
114,793 |
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
Hotel Operating Expenses: |
|
|
|
|
|
|
Room |
|
19,092 |
|
|
|
22,090 |
|
|
Food & Beverage |
|
10,621 |
|
|
|
12,832 |
|
|
Other Operating Revenues |
|
35,806 |
|
|
|
40,189 |
|
|
Total Hotel Operating Expenses |
|
65,519 |
|
|
|
75,111 |
|
|
Hotel Ground Rent |
|
1,063 |
|
|
|
1,110 |
|
|
Real Estate and Personal Property Taxes and Property Insurance |
|
9,942 |
|
|
|
9,397 |
|
|
General and Administrative |
|
3,378 |
|
|
|
3,642 |
|
|
Share Based Compensation |
|
2,456 |
|
|
|
1,958 |
|
|
Depreciation and Amortization |
|
24,188 |
|
|
|
24,128 |
|
|
Total
Operating Expenses |
|
106,546 |
|
|
|
115,346 |
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
(16,409 |
) |
|
|
(553 |
) |
|
|
|
|
|
|
|
|
Interest Income |
|
36 |
|
|
|
83 |
|
|
Interest Expense |
|
(13,007 |
) |
|
|
(12,898 |
) |
|
Other (Expense) Income |
|
(72 |
) |
|
|
41 |
|
|
Loss before
Results from Unconsolidated Joint Venture Investments and Income
Taxes |
|
(29,452 |
) |
|
|
(13,327 |
) |
|
|
|
|
|
|
|
|
(Loss)
Income from Unconsolidated Joint Venture Investments |
|
(1,018 |
) |
|
|
181 |
|
|
|
|
|
|
|
|
|
Loss before
Income Taxes |
|
(30,470 |
) |
|
|
(13,146 |
) |
|
|
|
|
|
|
|
|
Income Tax
Benefit |
|
4,498 |
|
|
|
5,264 |
|
|
|
|
|
|
|
|
|
Net
Loss |
|
(25,972 |
) |
|
|
(7,882 |
) |
|
|
|
|
|
|
|
|
Loss (Income) Allocated to Noncontrolling Interests |
|
|
|
|
|
|
Common Units |
|
2,897 |
|
|
|
1,063 |
|
|
Consolidated Joint Venture |
|
- |
|
|
|
(140 |
) |
|
Preferred Distributions |
|
(6,044 |
) |
|
|
(6,044 |
) |
|
|
|
|
|
|
|
|
Net Loss
Applicable to Common Shareholders |
$ |
(29,119 |
) |
|
$ |
(13,003 |
) |
|
|
|
|
|
|
|
|
Earnings per
Share: |
|
|
|
|
|
|
BASIC |
|
|
|
|
|
|
Net Loss
Applicable to Common Shareholders |
$ |
(0.76 |
) |
|
$ |
(0.34 |
) |
|
|
|
|
|
|
|
|
DILUTED |
|
|
|
|
|
|
Net Loss
Applicable to Common Shareholders |
$ |
(0.76 |
) |
|
$ |
(0.34 |
) |
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
38,564,099 |
|
|
|
39,115,390 |
|
|
Diluted |
|
38,564,099 |
|
|
|
39,115,390 |
|
|
|
|
|
|
|
|
|
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 December 2018 Financial Standards White Paper 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
depreciation and amortization related to real estate, gains and
losses from the sale of certain real estate assets, gains and
losses from change in control, and impairment write-downs of
certain real estate assets and investments in entities when the
impairment is directly attributable to decreases in the value of
depreciable real estate held by an entity. 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:
- deducting or adding back income tax benefit or expense;
- adding back non-cash share-based compensation expense;
- adding back acquisition and terminated transaction
expenses;
- adding back contingent considerations;
- adding back amortization of discounts, premiums, and deferred
financing costs;
- adding back amortization of amended interest rate swap
liability;
- 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 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. 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:
|
|
|
|
|
|
|
|
Funds from Operations (FFO) and Adjusted Funds from
Operations (AFFO) |
|
|
|
|
|
|
|
(in
thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
Net loss
applicable to common shares |
|
$ |
(29,119 |
) |
|
$ |
(13,003 |
) |
|
Loss allocated to noncontrolling interest |
|
|
(2,897 |
) |
|
|
(923 |
) |
|
Loss (Income) from unconsolidated joint ventures |
|
|
1,018 |
|
|
|
(181 |
) |
|
Depreciation and amortization |
|
|
24,188 |
|
|
|
24,128 |
|
|
Funds from consolidated hotel operations applicable to common
shares and Partnership units |
|
|
(6,810 |
) |
|
|
10,021 |
|
|
|
|
|
|
|
|
|
|
(Loss)
income from unconsolidated joint venture investments |
|
|
(1,018 |
) |
|
|
181 |
|
|
Unrecognized pro rata interest in loss of unconsolidated joint
ventures |
|
|
(2,700 |
) |
|
|
(2,972 |
) |
|
Depreciation and amortization of difference between purchase price
and historical cost |
|
|
24 |
|
|
|
24 |
|
|
Interest in depreciation and amortization of unconsolidated joint
ventures |
|
|
1,373 |
|
|
|
1,282 |
|
|
Funds from unconsolidated joint venture operations applicable to
common shares and Partnership units |
|
|
(2,321 |
) |
|
|
(1,485 |
) |
|
|
|
|
|
|
|
|
|
Funds from
Operations applicable to common shares and Partnership units |
|
|
(9,131 |
) |
|
|
8,536 |
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
(4,498 |
) |
|
|
(5,264 |
) |
|
Non-cash share based compensation expense |
|
|
2,456 |
|
|
|
1,958 |
|
|
Straight-line amortization of lease expense |
|
|
149 |
|
|
|
163 |
|
|
Amortization of discounts, premiums and deferred financing
costs |
|
|
447 |
|
|
|
452 |
|
|
Amortization of amended interest rate swap liability |
|
|
967 |
|
|
|
- |
|
|
Interest in amortization and write-off of deferred financing costs
of unconsolidated joint venture |
|
|
202 |
|
|
|
202 |
|
|
Preferred Distributions in arrears |
|
|
6,044 |
|
|
|
- |
|
|
Operating loss incurred on properties closed due to physical
damage |
|
|
983 |
|
|
|
297 |
|
|
State and local tax expense related to reassessment of prior period
assessment |
|
|
(49 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Adjusted
Funds from Operations |
|
$ |
(2,430 |
) |
|
$ |
6,344 |
|
|
|
|
|
|
|
|
|
|
AFFO per
Diluted Weighted Average Common Shares and Partnership Units
Outstanding |
|
$ |
(0.06 |
) |
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
Diluted
Weighted Average Common Shares and Partnership Units
Outstanding |
|
|
43,500,486 |
|
|
|
43,192,933 |
|
|
|
|
|
|
|
|
|
|
EBITDAre and Adjusted
EBITDA
Earnings before interest expense, income taxes,
depreciation and amortization (“EBITDA”) is a supplemental measure
of our operating performance and facilitates comparisons between us
and other lodging REITs, hotel owners who are not REITs and other
capital-intensive companies. NAREIT adopted EBITDA for real
estate (“EBITDAre”) a measure calculated by adding gains from the
disposition of hotel operations, in order to promote an
industry-wide measure of REIT operating performance. We also
adjust EBITDAre for interest in amortization and write-off of
deferred financing costs of our unconsolidated joint ventures,
deferred financing costs write-offs in debt extinguishment,
non-cash share-based compensation expense, acquisition and
terminated transaction costs and net operating loss incurred on
non-operation properties to calculate Adjusted EBITDA.
Our EBITDAre and Adjusted EBITDA computation may
not be comparable to EBITDAre or Adjusted EBITDA reported by other
companies that interpret the definition of EBITDA differently than
we do. Management believes Adjusted EBITDA and EBITDAre to be
meaningful measures of a REIT's performance because they are widely
followed by industry analysts, lenders and investors and that they
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 |
|
|
|
|
|
|
|
EBITDAre and Adjusted EBITDA |
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(25,972 |
) |
|
$ |
(7,882 |
) |
|
Loss (income) from unconsolidated joint ventures |
|
|
1,018 |
|
|
|
(181 |
) |
|
Interest expense |
|
|
13,007 |
|
|
|
12,898 |
|
|
Non-operating interest income |
|
|
(36 |
) |
|
|
(83 |
) |
|
Income tax benefit |
|
|
(4,498 |
) |
|
|
(5,264 |
) |
|
Depreciation and amortization |
|
|
24,188 |
|
|
|
24,128 |
|
|
|
|
|
|
|
|
|
|
EBITDAre
from consolidated hotel operations |
|
|
7,707 |
|
|
|
23,616 |
|
|
|
|
|
|
|
|
|
|
(Loss)
income from unconsolidated joint venture investments |
|
|
(1,018 |
) |
|
|
181 |
|
|
Unrecognized pro rata interest in loss of unconsolidated joint
ventures |
|
|
(2,700 |
) |
|
|
(2,972 |
) |
|
Depreciation and amortization of difference between purchase price
and historical cost |
|
|
24 |
|
|
|
24 |
|
|
Adjustment for interest in interest expense, depreciation and
amortization of unconsolidated joint ventures |
|
|
3,206 |
|
|
|
3,389 |
|
|
|
|
|
|
|
|
|
|
EBITDAre
from unconsolidated joint venture operations |
|
|
(488 |
) |
|
|
622 |
|
|
|
|
|
|
|
|
|
|
EBITDAre |
|
|
7,219 |
|
|
|
24,238 |
|
|
|
|
|
|
|
|
|
|
Non-cash share based compensation expense |
|
|
2,456 |
|
|
|
1,958 |
|
|
Straight-line amortization of lease expense |
|
|
149 |
|
|
|
163 |
|
|
Interest in amortization and write-off of deferred financing costs
of unconsolidated joint venture |
|
|
202 |
|
|
|
202 |
|
|
Operating loss incurred on properties closed due to physical
damage |
|
|
983 |
|
|
|
297 |
|
|
State and local tax expense related to reassessment of prior period
assessment |
|
|
(49 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
10,960 |
|
|
$ |
26,858 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
Operating
loss |
|
$ |
(16,409 |
) |
|
$ |
(553 |
) |
|
Other revenue |
|
|
(199 |
) |
|
|
(150 |
) |
|
Depreciation and amortization |
|
|
24,188 |
|
|
|
24,128 |
|
|
General and administrative |
|
|
3,378 |
|
|
|
3,642 |
|
|
Share based compensation |
|
|
2,456 |
|
|
|
1,958 |
|
|
Straight-line amortization of ground lease expense |
|
|
149 |
|
|
|
163 |
|
|
Costs accrued for furloughed employees |
|
|
893 |
|
|
|
- |
|
|
State and local tax expense related to reassessment of prior period
assessment |
|
|
(49 |
) |
|
|
- |
|
|
Other |
|
|
17 |
|
|
|
(129 |
) |
|
|
|
|
|
|
|
|
|
Hotel
EBITDA |
|
$ |
14,424 |
|
|
$ |
29,059 |
|
|
|
|
|
|
|
|
|
|
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
Hersha Hospitality (NYSE:HT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Hersha Hospitality (NYSE:HT)
Historical Stock Chart
From Sep 2023 to Sep 2024