EXHIBIT 99.3
This pro forma Consolidated Balance Sheet of Hersha Hospitality Trust and
Subsidiaries (the "Company) is presented as if the acquisition of the Noble
Investments Hotels had occurred on January 1, 1999. It should be read in
conjunction with the consolidated financial statements of Hersha Hospitality
Trust for the year ended December 31, 1999 previously filed with the Securities
and Exchange Commission in form 10-K and the audited financial statements of the
Noble Investments Hotels for the seven months ending July 31, 1999 and the five
months ending December 31, 1999. In management's opinion, all adjustments
necessary to reflect the effects of the above transactions have been made. This
unaudited pro forma Balance Sheet is not necessarily indicative of what actual
results of the Company would have been assuming such transactions had been
completed as of January 1, 1999.
PRO FORMA BALANCE SHEETS
DECEMBER 31, 1999 [UNAUDITED], [IN THOUSANDS]
Actual Pro Forma
December 31, Pro Forma Consolidated
1999 Adjustments Total (a)
-------------- --------------- --------------
Assets:
Investment in Hotel Properties, Net of $ 51,908 $ 20,145 (b) $ 72,053
Accumulated Depreciation
Cash and Cash Equivalents 124 - 124
Lease Payments Receivable 2,116 - 2,116
Escrow and Lease Deposits - 248 248
Accounts Receivable - - -
Due from Related Party 1,028 - 1,028
Intangibles, Net of Accumulated Amortization 855 209 1,064
Other Assets 351 - 351
-------------- --------------- --------------
Total Assets $ 56,382 $ 20,602 $ 76,984
============== =============== ==============
Liabilities and Shareholders' Equity:
Cash Overdraft $ 84 $ - $ 84
Line of Credit 6,096 7,728 13,824
Mortgages Payable 18,658 11,874 30,532
Lease Deposits Payable - 1,000 1,000
Dividends Payable 410 - 410
Due to Related Party 188 - 188
Capital Leases Payable - - -
Accounts Payable and Accrued Expenses 161 - 161
-------------- --------------- --------------
Total Liabilities $ 25,597 $ 20,602 $ 46,199
-------------- --------------- --------------
Minority Interest 18,980 - 18,980
-------------- --------------- --------------
Shareholders' Equity:
Preferred Shares, $.01 par value, 10,000,000
Shares authorized, None Issued and Outstanding - - -
Common Shares Priority Class A, $.01
Par Value, 50,000,000 Shares Authorized,
2,275,000 Shares Issued and Outstanding at
December 31, 1999 23 - 23
Common Shares Priority Class B, $.01 Par Value,
50,000,000 Shares Authorized, -0- Shares Issued
and Outstanding at December 31, 1999 - - -
Additional Paid-in-Capital 11,968 - 11,968
Distributions in Excess of Net Earnings (186) - (186)
-------------- --------------- --------------
Total Liabilities and Shareholders' Equity $ 56,382 $ 20,602 $ 76,984
============== =============== ==============
(a) Represents the combined interests of the Company after the acquisition of
the Noble Investments Hotels
(b) Represents the purchase price of the Noble Investment Hotels, including
related costs
This unaudited pro forma Statement of Operations of Hersha Hospitality Trust and
Subsidiaries (the "Company) is presented as if the acquisition of the Noble
Investments Hotels had occurred on January 1, 1999. It should be read in
conjunction with the audited consolidated financial statements of Hersha
Hospitality Trust for the year ended December 31, 1999 previously filed with the
Securities and Exchange Commission in form 10-K and the audited financial
statements of the Noble Investments Hotels for the seven months ended July 31,
1999 and the five months December 31, 1999. In management's opinion, all
adjustments necessary to reflect the effects of the above transactions have been
made. This unaudited pro forma statement of operations is not necessarily
indicative of what actual results of the Company would have been assuming such
transactions had been completed as of January 1, 1999.
HERSHA HOSPITALITY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999 [UNAUDITED]
Actual Noble Pro Forma
December 31, Acquisition Consolidated
1999 Adjustments Total (a)
-------------- ------------- --------------
Revenue:
Percentage Lease Revenue $ 7,264 $ 2,800 (b) $ 10,064
Other Revenue 106 - 106
-------------- ------------- --------------
Total Revenue $ 7,370 $ 2,800 $ 10,170
-------------- ------------- --------------
Expenses:
Interest 1,428 1,715 (c) 3,143
Land Lease-Related Party 20 - 20
Real Estate and Personal Property Taxes
and Insurance 450 221 (d) 671
General and Administrative 363 40 (e) 403
Depreciation and Amortization 2,064 658 (f) 2,722
-------------- ------------- --------------
Total Expenses 4,325 2,634 6,959
Income Before Minority Interest 3,045 166 3,211
-------------- ------------- --------------
Income Allocated to Minority Interest 1,707 111 (g) 1,818
-------------- ------------- --------------
Net Income $ 1,338 $ 55 $ 1,393
============== ============= ==============
Basic Earning Per Common Share $ 0.59 $ 0.02 $ 0.61
Diluted Earnings Per Common Share $ 0.48 $ 0.03 $ 0.50
Weighted Average Shares:
Basic 2,275,000 2,275,000 2,275,000
Diluted 6,369,700 6,369,700 (h) 6,369,700
(a) Represents results of operations for the Company and the Noble Investments
Hotels on a pro forma basis as if the Company began operations on January
1, 1999 and the Noble Investments Hotels were owned by the Company and
leased under the Percentage Leases as of January 1, 1999.
(b) Represents lease payments from the Lessee to the Partnership calculated on
a pro forma basis using the rent provisions in the Percentage Leases.
(c) Represents interest computed on $19.6 million of debt incurred for the
purchase of the Noble Investments Hotels.
(d) Represents estimated real estate and personal property taxes and property
insurance for the Noble Investments Hotels to be paid by the Partnership.
(e) Represents amounts to be paid to Hersha Hospitality Management L.P.
("HHMLP") related to a administrative services agreement between the
Company and HHMLP.
(f) Represents depreciation of the Noble Investments Hotels. Depreciation is
computed using the straight-line and accelerated methods over estimated
useful lives of 15-40 years for buildings and improvements and 3-7 years
for furniture and equipment and the purchase prices of Noble Investments
Hotels. The estimated useful lives are based on management's knowledge of
the properties and the hotel industry in general.
(g) Calculated based upon the minority interest formula per the Company's
prospectus.
(h) Represents 4,032,431 units of limited partnership interest outstanding from
January 1, 1999 to August 31, 1999 and 4,205,970 units of limited
partnership interest outstanding from September 1, 1999 to December 31,
1999.
This unaudited pro forma Consolidated Balance Sheet of Hersha Hospitality Trust
and Subsidiaries (the "Company) is presented as if the acquisition of the Noble
Investments Hotels had occurred on January 1, 2000. It should be read in
conjunction with the consolidated financial statements of Hersha Hospitality
Trust for the three months ended March 31, 2000 previously filed with the
Securities and Exchange Commission in form 10-Q and the unaudited financial
statements of the Noble Investments Hotels for the three months ending March 31,
2000. In management's opinion, all adjustments necessary to reflect the effects
of the above transactions have been made. This unaudited pro forma Balance Sheet
is not necessarily indicative of what actual results of the Company would have
been assuming such transactions had been completed as of January 1, 2000.
HERSHA HOSPITALITY TRUST
PRO FORMA BALANCE SHEETS
MARCH 31, 2000 [UNAUDITED], [IN THOUSANDS]
Actual Pro Forma
March 31, Pro Forma Consolidated
1999 Adjustments Total (a)
-------------- --------------- --------------
Assets:
Investment in Hotel Properties, Net of $ 64,442 $ 20,145 (b) $ 84,587
Accumulated Depreciation
Escrow and Lease Deposits 891 248 1,139
Lease Payments Receivable 2,352 - 2,352
Due from Related Party 105 - 105
Intangibles, Net of Accumulated Amortization 1,597 209 1,806
Other Assets 655 - 655
-------------- --------------- --------------
Total Assets $ 70,042 $ 20,602 $ 90,644
============== =============== ==============
Liabilities and Shareholders' Equity:
Cash Overdraft $ 6 $ - $ 6
Line of Credit 4,513 7,728 12,241
Mortgages Payable 32,744 11,874 44,618
Dividends Payable 410 - 410
Lease Deposit Payable - 1,000 1,000
Due to Related Party 937 - 937
Accounts Payable and Accrued Expenses 519 - 519
-------------- --------------- --------------
Total Liabilities $ 39,129 $ 20,602 $ 59,731
-------------- --------------- --------------
Minority Interest 19,222 - 19,222
-------------- --------------- --------------
Shareholders' Equity:
Preferred Shares, $.01 par value, 10,000,000
Shares authorized, None Issued and Outstanding - - -
Common Shares Priority Class A, $.01
Par Value, 50,000,000 Shares Authorized,
2,275,000 Shares Issued and Outstanding at
December 31, 1999 23 - 23
Common Shares Priority Class B, $.01 Par Value,
50,000,000 Shares Authorized, 0 Shares Issued
and Outstanding at December 31, 1999 - - -
Additional Paid-in-Capital 11,968 - 11,968
Distributions in Excess of Net Earnings (300) - (300)
-------------- --------------- --------------
Total Liabilities and Shareholders' Equity $ 70,042 $ 20,602 $ 90,644
============== =============== ==============
(a) Represents the combined interests of the Company after the acquisition of
the Noble Investments Hotels
(b) Represents the purchase price of the Noble Investment Hotels, including
related costs
This unaudited pro forma Consolidated Statement of Operations of Hersha
Hospitality Trust and Subsidiaries (the "Company) is presented as if the
acquisition of the Noble Investments Hotels had occurred on January 1, 2000. It
should be read in conjunction with the consolidated financial statements of
Hersha Hospitality Trust for the three months ended March 31, 2000 previously
filed with the Securities and Exchange Commission in form 10-Q and the unaudited
financial statements of the Noble Investments Hotels for the three months ending
March 31, 2000. In management's opinion, all adjustments necessary to reflect
the effects of the above transactions have been made. This unaudited pro forma
Statement of Operations is not necessarily indicative of what actual results of
the Company would have been assuming such transactions had been completed as of
January 1, 2000.
HERSHA HOSPITALITY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 [UNAUDITED]
Actual Pro Pro Forma
March 31, Forma Consolidated
1999 Adjustments Total (a)
-------------- ------------- --------------
Revenue:
Percentage Lease Revenue $ 2,352 $ 700 (b) $ 3,052
Other Revenue 1 - 1
-------------- ------------- --------------
Total Revenue $ 2,353 $ 700 $ 3,053
-------------- ------------- --------------
Expenses:
Interest 812 429 (c) 1,241
Land Lease Related Party 4 0 4
Real Estate and Personal Property Taxes
and Insurance 145 44 (d) 189
General and Administrative 166 10 (e) 176
Early Payment Penalty 107 - 107
Depreciation and Amortization 797 217 (f) 1,014
-------------- ------------- --------------
Total Expenses 2,031 700 2,731
Income Before Minority Interest 322 0 322
-------------- ------------- --------------
Income Allocated to Minority Interest 28 0 (g) 28
-------------- ------------- --------------
Net Income $ 294 $ - $ 294
============== ============= ==============
Basic Earning Per Common Share $ 0.13 $ - $ 0.13
Diluted Earnings Per Common Share $ 0.05 $ - $ 0.05
Weighted Average Shares:
Basic 2,275,000 2,275,000 2,275,000
Diluted 6,763,141 6,763,141 (h) 6,763,141
(a) Represents the combined results of operations for the Company and the Noble
Investments Hotels on a pro forma basis as if the Noble Investments Hotels
were owned by the Company and leased under the Percentage Leases as of
January 1, 2000.
(b) Represents lease payments from the Lessee to the Partnership calculated on
a pro forma basis using the rent provisions in the Percentage Leases.
(c) Represents interest computed on the $19.6 million of debt incurred for the
purchase of the Noble Investments Hotels at a weighted average interest
rate of 8.75%.
(d) Represents estimated real estate and personal property taxes and property
insurance for the Noble Investments Hotels to be paid by the Partnership.
(e) Represents amounts to be paid to Hersha Hospitality Management L.P.
("HHMLP") related to a administrative services agreement between the
Company and HHMLP.
(f) Represents depreciation of the Noble Investments Hotels. Depreciation is
computed using the straight-line and accelerated methods over estimated
useful lives of 15-40 years for buildings and improvements and 3-7 years
for furniture and equipment and the purchase prices of Noble Investments
Hotels. The estimated useful lives are based on management's knowledge of
the properties and the hotel industry in general.
(g) Calculated based upon the minority interest formula per the Company's
prospectus.
(h) Represents 4,498,141 units of limited partnership outstanding on March 31,
2000