HERSHA HOSPITALITY TRUST
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148 Sheraton Drive
HERSHA Box A
New Cumberland, PA 17070
Phone: (717) 770-2405
Fax: (717) 774-7383
TRUST ANNOUNCES 1ST QUARTER 2003 RESULTS
Harrisburg, PA., May 13, 2003 - Hersha Hospitality Trust (AMEX:HT), owner of
nationally franchised mid-priced hotels, today announced that total revenues for
the first quarter ended March 31, 2003 increased approximately 10.3% to $3.278
million from $2.971 million for the same period in 2002.
Net income for the three months ended March 31, 2003 was $304,118, a decrease of
approximately 2%, as compared to net income of $310,293 for the same period
during 2002.
Funds from Operations ("FFO") for the three months ended March 31, 2003
increased from approximately $1.506 million to $1.335 million for the same
period in 2002. On a per share basis, FFO increased by approximately 11.1% to
$0.20 per diluted share for the first quarter ended March 31, 2003 as compared
to $0.18 per diluted share during the same time period in the prior year.
The increase in total revenues was primarily a result of higher fixed lease
revenues at several of the Company's properties that were acquired during prior
periods. The decrease in net income was primarily attributable to increases in
interest expense, real estate taxes, depreciation and amortization expenses
during the quarter ended March 31, 2003. The increase in FFO was primarily a
result of the increase in fixed lease revenues in addition to lower borrowing
costs on the Company's floating rate debt.
A summary of the first quarter results is presented below:
(in thousands except per share data)
MARCH 31, 2003 MARCH 31, 2002
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Total Revenues $ 3,278 $ 2,971
Income Before Minority Interest $ 418 $ 314
Net Income $ 304 $ 310
Net Income Per Diluted Share $ 0.05 $ 0.04
Funds from Operations (FFO) $ 1,506 $ 1,335
FFO per Diluted Share $ 0.20 $ 0.18
Funds from Operations. The National Association of Real Estate Investment
Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of
performance and liquidity of an equity REIT in order to recognize that
income-producing real estate historically has not depreciated on the basis
determined under GAAP. FFO, as defined under the definition adopted by NAREIT
in April 2002 and as presented by us, is net income (loss) (computed in
accordance with generally accepted accounting principles), excluding gains (or
losses) from debt restructuring or sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. FFO does not represent cash flows from operating activities in
accordance with GAAP (which, unlike FFO, generally reflects all cash effects of
transactions and other events in the determination of net income) and should not
be considered an alternative to net income as an indication of our performance
or to cash flow as a measure of liquidity or ability to make distributions. We
consider FFO a meaningful, additional measure of operating performance because
it primarily excludes the effects of the assumption that the value of real
estate assets diminishes predictably over time, and because it is widely used by
industry analysts as a performance measure. Comparison of our presentation of
FFO to similarly titled measures for other REITs may not necessarily be
meaningful due to possible differences in the application of the NAREIT
definition used by such REITs or the use of other definitions of that term.
The following table reconciles FFO and FFO per weighted average diluted share
for the three months ended March 31, 2003 and 2002 to their most directly
comparable GAAP measures, net income and net income per weighted average diluted
share (in thousands, except per share data):
THREE MONTHS ENDED
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MARCH 31, MARCH 31,
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2003 2002
Income Before Minority Interest and Discontinued Operations $ 418 $ 314
Add: Depreciation and Amortization 1,088 1,021
Funds from Operations $ 1,506 $ 1,335
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Weighted Average Basic Shares 2,577,785 2,347,722
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Dilutive Effect of Limited Partnership Units 5,099,722 5,099,722
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Weighted Average Diluted Shares 7,677,507 7,447,444
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Net Income per Diluted Share $ .05 $ .04
FFO per Diluted Share $ 0.20 $ 0.18
Hersha Hospitality Trust is a self-advised real estate investment trust that
owns mid-priced hotels in the eastern United States with strong, national
franchise affiliations. The Company focuses on acquisition and joint venture
opportunities in primary and secondary markets near major metropolitan markets.
Further inquiries regarding Hersha Hospitality Trust should be directed to
Ashish Parikh, CFO, at (717) 770-2405.
Certain matters within this press release are discussed using forward-looking
language as specified in 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 statement.