Hersha Hospitality Trust (NYSE: HT), owner of select service and upscale
hotels in major metropolitan markets, announced results for the fourth
quarter ended December 31, 2011.
For the quarter ended December 31, 2011, revenue per available room (“RevPAR”) for the Company's consolidated hotels, 52 hotels as of December 31, 2011, compared to 49 hotels as of December 31, 2010, was up 8.8% to $116.79, compared to $107.36 in the prior year period. The Company’s average daily rate (“ADR”) for its consolidated hotels increased by 4.1% to $162.46, while occupancy for its consolidated hotels increased by 309 basis points to 71.89%.
Hotel EBITDA for the Company’s consolidated hotels grew approximately 26.1%, or $6.2 million, to $29.8 million for the quarter ended December 31, 2011 compared to the same period in 2010. Hotel EBITDA margins expanded 280 basis points to 39.3% in the fourth quarter of 2011.
On a same-store basis (46 hotels), RevPAR for the Company’s consolidated hotels for the quarter ended December 31, 2011 was up 8.4% to $118.75, compared to $109.51 in the prior year period. ADR for the Company’s same-store consolidated hotels increased by 3.0% to $162.52, while occupancy for its same-store consolidated hotels increased by 368 basis points to 73.07%. Hotel EBITDA for the Company’s same-store consolidated hotels for the quarter ended December 31, 2011 increased approximately 15.6%, or $3.6 million, to $26.8 million compared to the quarter ended December 31, 2010.
Hotel EBITDA margins for the Company’s same-store consolidated hotels increased 260 basis points to 39.7% in the fourth quarter of 2011, compared to 37.1% in the fourth quarter of 2010. The benefit of ADR-driven RevPAR growth was partially offset by the bankruptcy of American Airlines and the related bad debt expense charge taken at the Company’s two JFK hotels. This bad debt expense impacted the Company’s total portfolio and same store margins by approximately 20 and 30 basis points, respectively, during the quarter.
Mr. Jay H. Shah, the Company’s Chief Executive Officer, stated, “In 2011 Hersha delivered solid performance as anticipated, with rate-driven RevPAR growth resulting in robust EBITDA margins. We made tremendous progress on our strategy to evolve our portfolio into one with higher anticipated earnings power and growth prospects as we further increased our presence in urban gateway markets, as we entered Los Angeles and Miami while divesting a non-core portfolio. Our current urban pure play portfolio consists of high quality, young hotels, with additional opportunity for improving metrics as it stabilizes further. We expect to drive RevPAR growth and margin expansion as we move through this lodging recovery. Furthermore, our sound balance sheet with manageable maturities positions us well to concentrate on maximizing operational growth while pursuing attractive opportunities.”
New York City and Manhattan
The New York City consolidated hotel portfolio, which includes the five boroughs, consisted of 14 hotels as of December 31, 2011. For the fourth quarter of 2011, the Company’s same-store New York City consolidated hotel portfolio (13 hotels) recorded a 6.6% increase in RevPAR to $199.78 driven by a 3.8% increase in ADR to $221.77 and a 239 basis point increase in occupancy to 90.09%. Hotel EBITDA margins grew 180 basis points to 47.0%, including the negative impact of the American Airlines bankruptcy discussed above.
The Manhattan consolidated hotel portfolio, consisted of 11 hotels as of December 31, 2011. For the fourth quarter of 2011, the Company’s same-store Manhattan consolidated hotel portfolio (10 hotels) recorded a 6.9% increase in RevPAR to $217.80 driven by a 5.2% increase in ADR to $238.14 and a 143 basis point increase in occupancy to 91.46%. Hotel EBITDA margins grew 340 basis points to 50.0% due primarily to the ADR-driven growth and continued cost controls at the properties.
Fourth Quarter 2011 Financial Results
For the fourth quarter ended December 31, 2011, net loss applicable to common shareholders was $(2.8) million compared to $(8.8) million for the comparable quarter of 2010. During the third quarter, the Company took a major step in executing its non-core disposition plan by entering into contracts to sell 18 assets in order to reposition the portfolio and recycle capital towards anticipated high growth urban gateway markets. Results presented in this release exclude these 18 assets as they are classified under discontinued operations.
Adjusted Funds from Operations (“AFFO”) in the fourth quarter increased by $4.6 million to $16.5 million, compared to $11.9 million in the fourth quarter of 2010. AFFO per diluted common share and unit of limited partnership interest in Hersha Hospitality Limited Partnership (“OP Unit”) was $0.09, compared to $0.07 for the same quarter of 2010. The Company’s weighted average diluted common shares and OP Units outstanding was approximately 180.3 million in the fourth quarter of 2011, up from approximately 174.2 million in the comparable quarter of 2010.
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 FFO, AFFO, EBITDA and Adjusted EBITDA to net income or loss, the most directly comparable U.S. GAAP measure, is included at the end of this release.
Full Year 2011 Financial and Operating Results
For the year ended December 31, 2011, net loss applicable to common shareholders was $(35.7) million, compared to a net loss of $(21.2) million for the comparable 2010 year. This increase in loss was primarily due to impairment charges recorded on assets in our non-core portfolio. AFFO increased by $19.4 million to $68.7 million, compared to $49.3 million for the full 2010 year. AFFO per diluted common share and limited partnership unit was $0.38 compared to $0.34 for the 2010 year.
RevPAR for the Company's consolidated hotels, 53 hotels in 2011 compared to 51 hotels in 2010, was up 7.9% to $113.66 in 2011 compared to $105.31 in the prior year period. The Company’s ADR increased by 6.7% to $154.01 and occupancy increased by 82 basis points to 73.80% from 72.98%. Hotel EBITDA for the Company’s consolidated hotels was $109.1 million for the year ended December 31, 2011 compared to $88.3 million for the same period in 2010. Hotel EBITDA margins improved 140 basis points year over year from 37.2% to 38.6%.
Financing
As of December 31, 2011, the Company had $51.0 million of borrowings on its $250.0 million secured credit facility, $51.9 million in cash and escrows. In 2012 the Company has $52.0 million of debt maturities. Excluding borrowings under the Company’s secured credit facility, approximately 95.8% of the Company’s consolidated debt as of December 31, 2011 is fixed rate debt or effectively fixed through interest rate swaps and caps and has a weighted average interest rate of approximately 5.71%. The weighted average life to maturity of total consolidated debt is approximately 5.2 years, excluding borrowings under the Company’s secured credit facility.
Subsequent Events
In February 2012, the Company closed on the previously announced sale of 14 of the 18 non-core assets. The Company expects to complete the sale of the remaining four assets by the end of the first quarter, pending completion of the loan assumption process. The sales are part of an ongoing portfolio transformation as the Company recycles its capital into anticipated higher growth urban gateway markets. The sale of the 14 assets generated net proceeds of $40.5 million, reduced the Company’s consolidated mortgage debt by $42.5 million and reduced its proportionate share of unconsolidated mortgage debt by $13.8 million.
For the quarter ended December 31, 2011, revenue per available room (“RevPAR”) for the Company's consolidated hotels, 52 hotels as of December 31, 2011, compared to 49 hotels as of December 31, 2010, was up 8.8% to $116.79, compared to $107.36 in the prior year period. The Company’s average daily rate (“ADR”) for its consolidated hotels increased by 4.1% to $162.46, while occupancy for its consolidated hotels increased by 309 basis points to 71.89%.
Hotel EBITDA for the Company’s consolidated hotels grew approximately 26.1%, or $6.2 million, to $29.8 million for the quarter ended December 31, 2011 compared to the same period in 2010. Hotel EBITDA margins expanded 280 basis points to 39.3% in the fourth quarter of 2011.
On a same-store basis (46 hotels), RevPAR for the Company’s consolidated hotels for the quarter ended December 31, 2011 was up 8.4% to $118.75, compared to $109.51 in the prior year period. ADR for the Company’s same-store consolidated hotels increased by 3.0% to $162.52, while occupancy for its same-store consolidated hotels increased by 368 basis points to 73.07%. Hotel EBITDA for the Company’s same-store consolidated hotels for the quarter ended December 31, 2011 increased approximately 15.6%, or $3.6 million, to $26.8 million compared to the quarter ended December 31, 2010.
Hotel EBITDA margins for the Company’s same-store consolidated hotels increased 260 basis points to 39.7% in the fourth quarter of 2011, compared to 37.1% in the fourth quarter of 2010. The benefit of ADR-driven RevPAR growth was partially offset by the bankruptcy of American Airlines and the related bad debt expense charge taken at the Company’s two JFK hotels. This bad debt expense impacted the Company’s total portfolio and same store margins by approximately 20 and 30 basis points, respectively, during the quarter.
Mr. Jay H. Shah, the Company’s Chief Executive Officer, stated, “In 2011 Hersha delivered solid performance as anticipated, with rate-driven RevPAR growth resulting in robust EBITDA margins. We made tremendous progress on our strategy to evolve our portfolio into one with higher anticipated earnings power and growth prospects as we further increased our presence in urban gateway markets, as we entered Los Angeles and Miami while divesting a non-core portfolio. Our current urban pure play portfolio consists of high quality, young hotels, with additional opportunity for improving metrics as it stabilizes further. We expect to drive RevPAR growth and margin expansion as we move through this lodging recovery. Furthermore, our sound balance sheet with manageable maturities positions us well to concentrate on maximizing operational growth while pursuing attractive opportunities.”
New York City and Manhattan
The New York City consolidated hotel portfolio, which includes the five boroughs, consisted of 14 hotels as of December 31, 2011. For the fourth quarter of 2011, the Company’s same-store New York City consolidated hotel portfolio (13 hotels) recorded a 6.6% increase in RevPAR to $199.78 driven by a 3.8% increase in ADR to $221.77 and a 239 basis point increase in occupancy to 90.09%. Hotel EBITDA margins grew 180 basis points to 47.0%, including the negative impact of the American Airlines bankruptcy discussed above.
The Manhattan consolidated hotel portfolio, consisted of 11 hotels as of December 31, 2011. For the fourth quarter of 2011, the Company’s same-store Manhattan consolidated hotel portfolio (10 hotels) recorded a 6.9% increase in RevPAR to $217.80 driven by a 5.2% increase in ADR to $238.14 and a 143 basis point increase in occupancy to 91.46%. Hotel EBITDA margins grew 340 basis points to 50.0% due primarily to the ADR-driven growth and continued cost controls at the properties.
Fourth Quarter 2011 Financial Results
For the fourth quarter ended December 31, 2011, net loss applicable to common shareholders was $(2.8) million compared to $(8.8) million for the comparable quarter of 2010. During the third quarter, the Company took a major step in executing its non-core disposition plan by entering into contracts to sell 18 assets in order to reposition the portfolio and recycle capital towards anticipated high growth urban gateway markets. Results presented in this release exclude these 18 assets as they are classified under discontinued operations.
Adjusted Funds from Operations (“AFFO”) in the fourth quarter increased by $4.6 million to $16.5 million, compared to $11.9 million in the fourth quarter of 2010. AFFO per diluted common share and unit of limited partnership interest in Hersha Hospitality Limited Partnership (“OP Unit”) was $0.09, compared to $0.07 for the same quarter of 2010. The Company’s weighted average diluted common shares and OP Units outstanding was approximately 180.3 million in the fourth quarter of 2011, up from approximately 174.2 million in the comparable quarter of 2010.
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 FFO, AFFO, EBITDA and Adjusted EBITDA to net income or loss, the most directly comparable U.S. GAAP measure, is included at the end of this release.
Full Year 2011 Financial and Operating Results
For the year ended December 31, 2011, net loss applicable to common shareholders was $(35.7) million, compared to a net loss of $(21.2) million for the comparable 2010 year. This increase in loss was primarily due to impairment charges recorded on assets in our non-core portfolio. AFFO increased by $19.4 million to $68.7 million, compared to $49.3 million for the full 2010 year. AFFO per diluted common share and limited partnership unit was $0.38 compared to $0.34 for the 2010 year.
RevPAR for the Company's consolidated hotels, 53 hotels in 2011 compared to 51 hotels in 2010, was up 7.9% to $113.66 in 2011 compared to $105.31 in the prior year period. The Company’s ADR increased by 6.7% to $154.01 and occupancy increased by 82 basis points to 73.80% from 72.98%. Hotel EBITDA for the Company’s consolidated hotels was $109.1 million for the year ended December 31, 2011 compared to $88.3 million for the same period in 2010. Hotel EBITDA margins improved 140 basis points year over year from 37.2% to 38.6%.
Financing
As of December 31, 2011, the Company had $51.0 million of borrowings on its $250.0 million secured credit facility, $51.9 million in cash and escrows. In 2012 the Company has $52.0 million of debt maturities. Excluding borrowings under the Company’s secured credit facility, approximately 95.8% of the Company’s consolidated debt as of December 31, 2011 is fixed rate debt or effectively fixed through interest rate swaps and caps and has a weighted average interest rate of approximately 5.71%. The weighted average life to maturity of total consolidated debt is approximately 5.2 years, excluding borrowings under the Company’s secured credit facility.
Subsequent Events
In February 2012, the Company closed on the previously announced sale of 14 of the 18 non-core assets. The Company expects to complete the sale of the remaining four assets by the end of the first quarter, pending completion of the loan assumption process. The sales are part of an ongoing portfolio transformation as the Company recycles its capital into anticipated higher growth urban gateway markets. The sale of the 14 assets generated net proceeds of $40.5 million, reduced the Company’s consolidated mortgage debt by $42.5 million and reduced its proportionate share of unconsolidated mortgage debt by $13.8 million.
No comments:
Post a Comment