EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
This unaudited Pro Forma Consolidated Balance Sheet of Hersha Hospitality Trust
(the "Company") is presented as if the acquisition of the Hersha Acquisition
Hotels had occurred on January 1, 1999. It should be read in conjunction with
the consolidated financial statements of Hersha Hospitality Trust for the six
months ended June 30, 1999 previously filed with the Securities and Exchange
Commission in Form 10-Q and the financial statements of the Hersha Acquisition
Hotels for the six months ended June 30, 1999, at pages X through X. 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.
HERSHA HOSPITALITY TRUST
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999 [UNAUDITED], [IN THOUSANDS]
Actual Pro Forma
June 30, Pro Forma Consolidated
1999 (1) Adjustments Total (a)
-------- ---------- ---------
Assets:
Investment in Hotel Properties, Net of
Accumulated Depreciation $39,903 $ 6,639(b) $ 46,542
Cash and Cash Equivalents 1,593 7 1,600
Lease Payments Receivable 1,966 - 1,966
Accounts Receivable - 60 60
Due from Affiliates - 204 204
Intangibles, Net of Accumulated
Amortization 1,565 94 1,659
Other Assets 523 63 586
-------- ---------- ----------
Total Assets $45,550 $ 7,067 $ 52,617
======== ========== ==========
Liabilities and Shareholders' Equity:
Mortgages Payable $14,429 $ 4,609 $ 19,038
Dividends Payable 410 - 410
Loans Payable - Affiliate - 1,737 1,737
Accounts Payable and Accrued Expenses 468 185 653
--------- ---------- ----------
Total Liabilities $15,307 $ 6,531 $ 21,838
--------- ---------- ----------
Minority Interest 18,300 - 18,300
--------- ---------- ----------
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
June 30, 1999 23 - 23
Common Shares - Priority Class B, $.01
Par Value, 50,000,000 Shares Authorized,
-0- Shares Issued and Outstanding at
June 30, 1999 - - -
Additional Paid-in-Capital 11,968 536(c) 12,504
Distributions in Excess of Net Earnings (48) - (48)
--------- ---------- ----------
Total Liabilities and Shareholders' Equity $45,550 $ 7,067 $ 52,617
HERSHA HOSPITALITY TRUST
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999 [UNAUDITED], [IN THOUSANDS]
(CONTINUED)
(1) Operations commenced on January 26, 1999
(a) Represents the combined interests of the Company after the acquisition of
the Hersha Acquisition Hotels
(b) Represents, the purchase price of the Hersha Acquisition Hotels,
including related closing costs
(c) Represents the original partnership interests of the sellers which
were contributed into HHLP for cash and subordinated limited partnership
interests
This unaudited Pro Forma Statement of Operations of Hersha Hospitality
Trust (the "Company") is presented as if the acquisition of the Hersha
Acquisition Hotels had occurred on January 1, 1999. It should be read in
conjunction with the consolidated financial statements of Hersha Hospitality
Trust for the quarter ended June 30, 1999 previously filed with the Securities
and Exchange Commission in Form 10-Q and the financial statements of the Hersha
Acquisition Hotels for the six months ended June 30, 1999, at pages X through X.
In management's opinion, all adjustments necessary to reflect the effects of the
above transactions have been made. This unaudited Pro Forma Consolidated
Statement of Operations is not necessarily indicative of what actual results of
operations of the Company would have been assuming such transactions had been
completed as of January 1, 1999, nor does it purport to represent the results of
operations for future periods.
HERSHA HOSPITALITY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 1999 [UNAUDITED], [IN THOUSANDS]
Actual Pro Forma
June 30, Pro Forma Consolidated
1999 (1) Adjustments Total (a)
--------- ----------- -----------
Revenue:
Percentage Lease Revenue $ 3,465 $ 454 (b) $ 3,919
Other Revenue 82 - 82
---------- ---------- -----------
Total Revenue $ 3,547 $ 454 $ 4,001
Expenses:
Interest 576 209 (c) 785
Property Tax & Insurance 249 25 (d) 274
General and Administrative 216 22 238
Depreciation and Amortization 1,006 125 (e) 1,131
---------- ---------- -----------
Total Expenses $ 2,047 $ 381 $ 2,428
Income Before Minority Interest 1,500 73 (f) 1,573
Income Allocated to Minority Interest 788 44 832
Net Income $ 712 $ 29 $ 741
========== ========== ===========
Basic Earning Per Common Share $ 0.31 $ 0.33
Diluted Earnings Per Common Share $ 0.24 $ 0.24
Weighted Average Share:
Basic 2,275,000 2,275,000
Diluted 6,307,431 173,333 (g) 6,480,764
(1) Operations commenced on January 26, 1999
(a) Represents results of operations for the Company and the Hersha Acquisition
Hotels on a pro forma basis as if the Company began operations on January
1, 1999 and the Hersha Acquisition 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 approximately $4.6 million of debt
remaining outstanding during the period.
(d) Represents estimated real estate and personal property taxes and property
insurance for the Hersha Acquisition Hotels to be paid by the Partnership.
(e) Represents depreciation of the Hersha Acquisition Hotels. Depreciation is
computed using the straight-line method based upon estimated useful lives
of 30-40 years for building and 5 years for furniture and equipment and the
purchase prices of the Hersha Acquisition Hotels. The estimated useful
lives are based on management's knowledge of the properties and the hotel
industry in general.
(f) Calculated based upon the minority interest formula per the Company's
Prospectus.
(g) Represents 4,032,431 subordinated units outstanding during the period
presented plus 173,333 subordinated units issued in connection with the
purchase of the Hersha Acquisition Hotels.
This unaudited Pro Forma Condensed Statement of Operations of Hersha Hospitality
Management, L.P. ("HHMLP") is presented as if the acquisition of the Hersha
Acquisition Hotels had occurred on January 1, 1998, and the percentage leases
for the Hersha Acquisition Hotels were effective January 1, 1998. Such estimated
information should be read in conjunction with the financial statements of
Hersha Hospitality Management, L.P., previously filed with the Securities and
Exchange Commission in Form 10-K of Hersha Hospitality Management, L.P., for the
year ended December 31, 1998, and the financial statements of the Hersha
Acquisition Hotels for the year ended December 31, 1998, at pages X through X.
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 operations of
Hersha Hospitality Management, L.P. would have been assuming such transactions
had been completed as of January 1, 1998, nor does it purport to represent the
results of operations for future periods.
HERSHA HOSPITALITY MANAGEMENT, LP
PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
1998 [UNAUDITED]
[IN THOUSANDS]
==============================================================================
Actual Pro Forma
12/31/98 Adjustments (1) 12/31/98
-------- --------------- --------
Revenues from Hotel Operations:
Room Revenue $ 15,185 $ - $ 15,601
Restaurant Revenue 2,111 - 2,111
Other Revenue 790 155 796
------------ ------------- ----------
Total Revenues from Hotel
Operations $ 18,086 $ 155 $ 18,508
Expenses:
Hotel Operating Expenses 7,449 364 7,813
Restaurant Operating Expenses 1,469 - 1,469
Advertising and Marketing 918 38 956
Depreciation and Amortization 1,543 77 1,620
Interest Expense 1,605 92 1,697
Interest Expense-Related Parties 386 107 493
General and Administrative 2,065 64 2,129
General and Administrative-Related
Parties 608 20 628
Loss on Abandonments and Asset Disposal 95 - 95
------------ ------------- ----------
Total Expenses $ 16,138 $ 761 $ 16,899
Net Income (Loss) $ 1,948 $ (339) $ (1,609)
============ ============= ==========
(1)Represents the operations of the Hersha Acquisition Hotels from their
respective date of openings. The Clarion Inn & Suites, Harrisburg commenced
operations in September 1998 and the Hampton Inn, Danville commenced
operations in August, 1998.
This unaudited Pro Forma Condensed Statement of Operations of Hersha Hospitality
Management, L.P. ("HHMLP") is presented as if the acquisition of the Hersha
Acquisition Hotels had occurred on January 1, 1999, and the percentage leases
for the Hersha Acquisition Hotels were effective January 1, 1998. Such estimated
information should be read in conjunction with the financial statements of
Hersha Hospitality Management, L.P., previously filed with the Securities and
Exchange Commission in Form 10-Q of Hersha Hospitality Management, L.P., for the
six months ended June 30, 1999, and the financial statements of the Hersha
Acquisition Hotels for the six months ended June 30, 1999 at pages X through X.
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 operations of
Hersha Hospitality Management, L.P. would have been assuming such transactions
had been completed as of June 30, 1999, nor does it purport to represent the
results of operations for future periods.
HERSHA HOSPITALITY MANAGEMENT, LP
PRO FORMA STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 1999 [UNAUDITED]
[IN THOUSANDS]
Actual Pro Forma
6/30/99 (1) Adjustments 6/30/99
----------- ----------- -------
Revenues from Hotel Operations:
Room Revenue $ 7,013 $ - $ 7,013
Restaurant Revenue 971 - 971
Other Revenue 365 10 (a) 375
------------ ----------- -----------
Total Revenues from Hotel $ 8,349 $ 10 $ 8,359
Operations
Expenses:
Hotel Operating Expenses 3,079 - 3,079
Restaurant Operating Expenses 819 - 819
Advertising and Marketing 387 - 387
General and Administrative 964 - 964
General and Administrative -
Related Parties 153 (126) (b) 27
Depreciation and Amortization - - -
Lease Payments 3,341, 454 (c) 3,795
------------ ----------- -----------
Total Expenses $ 8,743 $ 328 $ 9,071
Net Income (Loss) $ (394) $ (318) $ (712)
============ =========== ===========
(1) Actual results for 6/30/99 reflect the operations of the Hersha Acquisition
hotels for the six months ending 6/30/99. HHMLP commenced operations on 1/1/99
and manages the ten initial hotels contributed into Hersha Hospitality Trust
(the "Initial Hotels"), the Hersha Acquisition Hotels and other properties owned
by Hasu P. Shah, CEO and Chairman, and certain affiliates, ("Hersha
Affiliates").
(a) Represents Administrative Service Fee Income
(b) Represents the elimination of rent paid to HHLP
(c) Represents the addition of lease payments for HHLP properties