Hersha Hospitality Trust Announces Second Quarter 2013 Results - Consolidated Hotel RevPAR Improved 3.6% - - Same Store Consolidated Portfolio-Wide Occupancy of 82.2% - - Same Store Consolidated EBITDA Margins Expand to 42.0% - Business Wire PHILADELPHIA -- July 30, 2013 Hersha Hospitality Trust (NYSE: HT, the “Company”), owner of upscale hotels in urban gateway markets, today announced results for the second quarter ended June 30, 2013. Second Quarter 2013 Financial Results Adjusted Funds from Operations (“AFFO”) in the second quarter increased by $2.0 million to $28.7 million, compared to $26.7 million for the second quarter of 2012. AFFO per diluted common share and unit of limited partnership interest in Hersha Hospitality Limited Partnership (“OP Unit”) was $0.14, in-line with the same quarter in 2012, due to a higher share count in 2013. The Company’s weighted average diluted common shares and OP Units outstanding were approximately 208.1 million in the second quarter 2013, up from approximately 196.3 million in the comparable quarter in 2012. Net income applicable to common shareholders was $14.3 million for the second quarter ended June 30, 2013, compared to net income applicable to common shareholders of $13.1 million for the comparable quarter in 2012. “Our portfolio continues to post solid results, with strong occupancy, particularly in New York, and high absolute margins. Year-to-date RevPAR growth of 8.0% within our same store consolidated portfolio remains industry leading. Our year-over-year quarterly RevPAR growth was somewhat muted, however, as the Company faced tough comparables for transient travel in April as a result of the Easter holiday shift, a softer convention calendar in Boston and Philadelphia, as well as the impact from a slowdown in government travel due to sequestration in our Washington, D.C. metro market.” commented Mr. Jay H. Shah, the Company’s Chief Executive Officer. Mr. Shah continued, “We continue to believe that we are extremely well-positioned to be outsized beneficiaries of the continuing economic recovery currently underway. We believe that Hersha’s young, urban focused, and newly refreshed portfolio will benefit from increased transient travel which is forecasted to be the U.S. lodging industry’s sustained driver of RevPAR growth in the near-term. The Company will also benefit from its continued expansion in key gateway markets such as Miami and San Diego and the disposition of non-core assets. Moving forward, the Company will continue to focus on disposition opportunities, both to unlock value from capital recycling within our portfolio and to continue to strategically transition Hersha as the leading urban focused hospitality REIT in the sector.” Second Quarter 2013 Operating Results For the quarter ended June 30, 2013, revenue per available room (“RevPAR”) at the Company's consolidated hotels, 57 hotels as of June 30, 2013 compared to 53 hotels as of June 30, 2012, was up 3.6% to $142.13 compared to $137.25 in the prior year period. The Company’s average daily rate (“ADR”) at its consolidated hotels increased by 3.4% to $174.42, while occupancy at its consolidated hotels increased by 11 basis points to 81.5%. Hotel EBITDA at the Company’s consolidated hotels grew approximately 9.9%, or $3.9 million, to $43.3 million for the quarter ended June 30, 2013 compared to the same period in 2012. Hotel EBITDA margins were 40.9% in the second quarter 2013 compared to 41.5% in the same quarter 2012. In addition to a different mix of hotels within the consolidated portfolio, EBITDA margins were impacted by startup and pre-opening expenses associated with the Hyatt Union Square, increased property taxes and insurance costs. On a same-store basis (51 hotels), RevPAR at the Company’s consolidated hotels for the quarter ended June 30, 2013 was up 3.7% to $142.24 compared to $137.19 in the prior year period. ADR at the Company’s same-store consolidated hotels increased by 2.4% to $173.02, while occupancy at same-store consolidated hotels increased by 103 basis points to 82.2%. Hotel EBITDA margins at the Company’s same-store consolidated hotels increased by 30 basis points to 42.0% in the second quarter 2013, and were also impacted by increased property taxes and insurance costs, which collectively reduced margins by approximately 55 basis points. The Company’s top performing markets during the quarter based on RevPAR growth were the California-Arizona, the Connecticut-Rhode Island and the NY-NJ Metro markets with RevPAR growth of 11.4%, 9.8% and 8.7%, respectively. New York City and Manhattan The New York City hotel portfolio, which includes the five boroughs, consisted of 16 hotels as of June 30, 2013. For the second quarter 2013, the Company’s same-store New York City hotel portfolio (14 hotels) recorded a 5.8% increase in RevPAR to $208.40 as ADR increased 4.7% to $224.72, while occupancy increased 91 basis points to 92.7%. The Manhattan hotel portfolio consisted of 13 hotels as of June 30, 2013. For the second quarter of 2013, the Company’s same-store Manhattan hotel portfolio (11 hotels) recorded a 2.9% increase in RevPAR to $219.02, as ADR increased 2.1% to $234.77, and occupancy increased 72 basis points to 93.3%. Financing As of June 30, 2013, the Company maintained significant financial flexibility with approximately $29.3 million of cash and cash equivalents and $183.8 million available on its $250 million senior unsecured revolving line of credit As of June 30, 2013, 92.8% of the Company’s consolidated debt is fixed rate debt or effectively fixed through interest rate swaps and caps. The Company’s total consolidated debt has a weighted average interest rate of approximately 4.85% and a weighted average life-to-maturity of approximately 4.0 years. In April 2013, the Company received the remaining balance of principal and accrued interest on the development loan for the Hyatt 48 Lex in the amount of $2.0 million. With this transaction, the Company no longer possesses any development loan exposure. In addition, in April 2013, the Company modified its $30 million loan for the Courtyard by Marriott Los Angeles, CA. This modification included the option to advance an additional $5 million in principal, bears interest at a variable rate of one month LIBOR plus 3.00% and now matures in September 2017. Furthermore, during the second quarter, the Company repaid $7.9 million on its outstanding mortgage at the Residence Inn, Tysons Corner, VA. Acquisitions During the second quarter, the Company completed two acquisitions of high quality hotels attractively located in top gateway markets. In May 2013, the Company closed on the 245-room Courtyard San Diego Downtown for a total purchase price of $71.0 million. The hotel, which recently completed a $6.4 million renovation of all guest rooms, is uniquely situated on the north side of the Gaslamp Quarter within close proximity to the city’s Central Business District, which encompasses approximately 11 million square feet of office space. Additionally, the San Diego market is a premier convention location, with the expansion of the San Diego Convention center in 2016 expected to further increase demand. In June 2013, the Company acquired the 140-room Residence Inn Coconut Grove in Miami for $21.8 million. The Residence Inn Coconut Grove is located in a highly desirable commercial and residential neighborhood in Miami in close proximity to the Downtown Brickell office market and the University of Miami in Coral Cables. Dispositions The Company continued its efforts to recycle capital from its non-core portfolio into core, urban transient markets. The Company sold the Comfort Inn in Harrisburg, PA for $3.7 million in June 2013 and recognized a gain of $1 million from this transaction. Additionally, the Company entered into a purchase and sale agreement to sell the Holiday Inn Express in Camp Springs, PA in May 2013 for an aggregate sale price of $8.5 million. A non-cash impairment charge of $3.7 million was recorded as a result of entering into the purchase and sale agreement. Results of operations for the Comfort Inn in Harrisburg, PA and the Holiday Inn Express in Camp Springs, MD have been reclassified to discontinued operations for the three-month and the six-month periods ended June 30, 2013 and 2012. The sale of this hotel is subject to customary closing conditions, including the completion of the buyer’s due diligence. Accordingly, no assurance can be given that this sale will close on the terms summarized above or at all. Outlook for 2013 The Company is maintaining its range of operating expectations for 2013. Based on management’s current outlook, the Company is re-issuing the following previously announced operating expectations for 2013: Metric 2013 Expectation Total consolidated RevPAR growth: 6.0% to 7.5% Total consolidated Hotel EBITDA margins: Improvement of 25 basis points to 50 basis points Same-store consolidated RevPAR growth: 5.5% to 7.0% Same-store consolidated Hotel EBITDA Improvement of 25 basis points to margin improvement: 75 basis points Dividend For the second quarter 2013, the Company paid a dividend of $0.50 per Series B Preferred Share and $0.4297 per Series C Preferred Share. The Company also paid a dividend of $0.06 per Common Share and per OP unit for the second quarter ended June 30, 2013. Second Quarter 2013 Conference Call Hersha will host a conference call to discuss the Company’s financial results at 9:00 AM Eastern time on Wednesday July 31, 2013. A live webcast of the conference call will be available online on the Company’s website at www.hersha.com. The conference call can be accessed by dialing (888) 510-1786 or (719) 457-2627 for international participants. A replay of the call will be available from 12:00 p.m. Eastern Time on Wednesday, July 31, 2013, through midnight Eastern Time on August 14, 2013. The replay can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international participants. The passcode for the call and the replay is 2575296. A replay of the webcast will be available on the Company’s website for a limited time. About Hersha Hospitality Hersha Hospitality Trust (HT) is a self-advised real estate investment trust, which owns interests in 65 hotels totaling 9,616 rooms, primarily along the Northeast Corridor from Boston to Washington DC. The Company also owns hotels in Southern California, Northern California, Arizona and Miami, Florida. Hersha focuses on high quality upscale hotels in high barrier to entry markets. More information on the Company and its portfolio of hotels is available on Hersha's Web site at www.hersha.com. Non-GAAP Financial Measures 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 measures, is included at the end of this release. Forward Looking Statement 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. These forward-looking statements may include statements related to the Company’s ability to outperform, the ongoing recovery 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, the completion of acquisitions under contract, the Company’s ability to identify and complete the acquisition of hotel properties in new markets, the Company’s ability to enter into contracts for and complete the disposition of non-core assets, the Company’s ability to complete the hotel redevelopment projects, the Company’s ability to increase margins, including Hotel EBITDA margins, and the Company’s operating expectations for the full 2013 calendar year. 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, 2012 filed by the Company with the Securities and Exchange Commission and other documents filed by the Company with the Securities and Exchange Commission. HERSHA HOSPITALITY TRUST Balance Sheet (unaudited) (in thousands, except shares and per share data) June 30, December 31, 2013 2012 Assets: Investment in Hotel Properties, net of Accumulated Depreciation, (including $ 1,672,120 $ 1,466,713 consolidation of variable interest entity assets of $86,515 and $86,657) Investment in Unconsolidated Joint 14,365 16,007 Ventures Development Loans Receivable - 28,425 Cash and Cash Equivalents 29,294 69,059 Escrow Deposits 33,394 26,792 Hotel Accounts Receivable, net of allowance for doubtful accounts of $19 and 13,974 11,538 $365 Deferred Financing Costs, net of Accumulated Amortization of $5,945 and 9,098 8,695 $4,841 Due from Related Parties 5,776 8,488 Intangible Assets, net of Accumulated 8,251 8,698 Amortization of $3,119 and $2,413 Deposits on Hotel Acquisitions 16,486 37,750 Other Assets 21,304 25,514 Hotel Assets Held for Sale 8,193 - Total Assets $ 1,832,255 $ 1,707,679 Liabilities and Equity: Line of Credit $ 66,200 $ - Unsecured Term Loan 150,000 100,000 Unsecured Notes Payable 51,548 51,548 Mortgages Payable, including net Unamortized Premium (including 649,680 641,160 consolidation of variable interest entity debt of $56,488 and $57,256) Accounts Payable, Accrued Expenses and 34,641 33,838 Other Liabilities Dividends and Distributions Payable 15,949 15,621 Due to Related Parties 6,139 4,403 Total Liabilities 974,157 846,570 Redeemable Noncontrolling Interests - $ - $ 15,321 Common Units Equity: Shareholders' Equity: Preferred Shares: $.01 Par Value, 29,000,000 shares Authorized, 7,600,000 Series B and C Shares Issued and Outstanding at June 30, 2013 and 7,000,000 76 70 Series A and B Shares Issued and Outstanding at December 31, 2012, with Liquidation Preferences of $25 per Share Common Shares: Class A, $.01 Par Value, 300,000,000 Shares Authorized, 202,667,646 and 198,672,356 Shares Issued and 2,027 1,986 Outstanding at June 30, 2013 and December 31, 2012, respectively Common Shares: Class B, $.01 Par Value, 1,000,000 Shares Authorized, None Issued - - and Outstanding Accumulated Other Comprehensive Income 577 (1,786 ) (Loss) Additional Paid-in Capital 1,196,914 1,178,292 Distributions in Excess of Net Income (370,709 ) (348,734 ) Total Shareholders' Equity 828,885 829,828 Noncontrolling Interests: Noncontrolling Interests - Common Units 29,167 15,484 Noncontrolling Interests - Consolidated 46 476 Variable Interest Entity Total Noncontrolling Interests 29,213 15,960 Total Equity 858,098 845,788 Total Liabilities and Equity $ 1,832,255 $ 1,707,679 HERSHA HOSPITALITY TRUST Summary Results (unaudited) (in thousands, except shares and per share data) Three Months Ended Six Months Ended June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012 Revenues: Hotel Operating $ 106,092 $ 94,785 $ 182,095 $ 158,855 Revenues Interest Income from 12 518 158 1,139 Development Loans Other Revenue 60 52 94 114 Total Revenues 106,164 95,355 182,347 160,108 Operating Expenses: Hotel Operating 55,765 50,130 103,442 89,849 Expenses Gain on Insurance - - (403 ) - Settlements Hotel Ground 266 214 494 408 Rent Real Estate and Personal Property Taxes 6,425 5,090 13,023 10,122 and Property Insurance General and 3,260 3,074 5,868 6,109 Administrative Stock Based 2,439 2,266 4,827 4,399 Compensation Acquisition and Terminated 773 124 776 1,082 Transaction Costs Depreciation and 16,083 13,924 30,957 27,155 Amortization Gain on Hotel (12,107 ) - (12,107 ) - Acquisitions Total Operating 72,904 74,822 146,877 139,124 Expenses Operating 33,260 20,533 35,470 20,984 Income Interest 469 346 925 452 Income Interest 11,138 10,442 21,558 21,925 Expense Other Expense 350 287 584 522 Loss on Debt 284 240 545 246 Extinguishment Income (Loss) before Income (Loss) from Unconsolidated Joint Ventures 21,957 9,910 13,708 (1,257 ) Investments, Income Taxes and Discontinued Operations Unconsolidated Joint Ventures Income (Loss) from 148 414 (248 ) (316 ) Unconsolidated Joint Ventures Loss from Remeasurement of Investment - (224 ) - (224 ) in Unconsolidated Joint Ventures Income (Loss) from Unconsolidated 148 190 (248 ) (540 ) Joint Venture Investments Income (Loss) before Income 22,105 10,100 13,460 (1,797 ) Taxes Income Tax (1,438 ) - (309 ) - Expense Income (Loss) from 20,667 10,100 13,151 (1,797 ) Continuing Operations Discontinued Operations Gain on Disposition of 1,043 6,949 1,043 11,452 Hotel Properties Impairment of Asset Held for (3,723 ) - (3,723 ) - Sale Income (Loss) from 98 340 (62 ) (180 ) Discontinued Operations (Loss) Income from (2,582 ) 7,289 (2,742 ) 11,272 Discontinued Operations Net Income 18,085 17,389 10,409 9,475 (Income) Loss Allocated to (210 ) (796 ) 463 (55 ) Noncontrolling Interests Preferred (3,589 ) (3,500 ) (7,433 ) (7,000 ) Distributions Extinguishment of Issuance Costs Upon Redemption of - - (2,250 ) - Series A Preferred Stock Net Income Applicable to $ 14,286 $ 13,093 $ 1,189 $ 2,420 Common Shareholders Earnings per Share: BASIC Income (Loss) from Continuing Operations $ 0.08 $ 0.03 $ 0.01 $ (0.05 ) Applicable to Common Shareholders (Loss) Income from (0.01 ) 0.04 (0.01 ) 0.06 Discontinued Operations Net Income Applicable to $ 0.07 $ 0.07 $ 0.00 $ 0.01 Common Shareholders DILUTED Income (Loss) from Continuing Operations $ 0.08 $ 0.03 $ 0.01 $ (0.05 ) Applicable to Common Shareholders (Loss) Income from (0.01 ) 0.04 (0.01 ) 0.06 Discontinued Operations Net Income Applicable to $ 0.07 $ 0.07 $ 0.00 $ 0.01 Common Shareholders Weighted Average Common Shares Outstanding: Basic 198,633,051 186,264,437 197,835,465 178,345,932 Diluted 201,201,337 189,011,990 201,083,900 178,345,932 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 April 2002 National Policy Bulletin 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 extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated assets, plus certain non-cash items, such as loss from impairment of assets and depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our interpretation of the NAREIT definition is that noncontrolling 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, noncontrolling 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: *adding back write-offs of deferred financing costs on debt extinguishment, both for consolidated and unconsolidated properties; *adding back amortization of deferred financing costs; *making adjustments for the amortization of original issue discount/premium; *adding back non-cash stock expense; *adding back acquisition and terminated transaction expenses; *adding back FFO attributed to our partners in consolidated joint ventures; and *making adjustments to ground lease payments, which are required by GAAP to be amortized on a straight-line basis over the term of the lease, to reflect the actual lease payment. 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 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 Partnership units because our Partnership 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 Partnership units. Certain amounts related to depreciation and amortization and depreciation and amortization from discontinued operations in the prior year FFO reconciliation have been recast to conform to the current year presentation. 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: HERSHA HOSPITALITY TRUST Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) (in thousands, except shares and per share data) Three Months Ended Six Months Ended June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012 Net income applicable to $ 14,286 $ 13,093 $ 1,189 $ 2,420 common shares Income (loss) allocated to 210 796 (463 ) 55 noncontrolling interest (Income) loss from (148 ) (190 ) 248 540 unconsolidated joint ventures Gain on hotel (12,107 ) - (12,107 ) - acquisition Gain on disposition of (1,043 ) (6,949 ) (1,043 ) (11,452 ) hotel properties Loss from impairment of 3,723 - 3,723 - depreciable assets Depreciation and 16,083 13,924 30,957 27,155 amortization Depreciation and amortization 204 187 426 456 from discontinued operations FFO allocated to noncontrolling - (139 ) - - interests in consolidated joint ventures Funds from consolidated hotel operations applicable to 21,208 20,722 22,930 19,174 common shares and Partnership units Income (loss) from unconsolidated 148 190 (248 ) (540 ) joint venture investments Loss from remeasurement of investment - 224 - 224 in unconsolidated joint ventures Depreciation and amortization of purchase 147 257 301 577 price in excess of historical cost Interest in depreciation and amortization 1,718 2,043 2,594 2,704 of unconsolidated joint ventures Funds from unconsolidated joint venture operations applicable to 2,013 2,714 2,647 2,965 common shares and Partnership units Funds from Operations applicable to common shares 23,221 23,436 25,577 22,139 and Partnership units Add: FFO allocated to noncontrolling - 139 - - interests in consolidated joint ventures Non-cash extinguishment of issuance costs upon - - 2,250 - redemption of series A preferred stock Non-cash income tax 1,438 - 309 - expense Non-cash stock compensation 2,439 2,266 4,827 4,399 expense Acquisition and terminated 773 124 776 1,082 transaction costs Amortization of deferred 761 484 1,377 1,501 financing costs Amortization of discounts (211 ) (35 ) (420 ) (3 ) and premiums Deferred financing costs written 284 240 545 246 off in debt extinguishment Straight-line amortization 1 2 2 36 of ground lease expense Real estate taxes expense related to reassessment - - 434 - of prior period assessment Adjusted Funds from $ 28,706 $ 26,656 $ 35,677 $ 29,400 Operations AFFO per Diluted Weighted Average Common $ 0.14 $ 0.14 $ 0.17 $ 0.16 Shares and Units Outstanding Diluted Weighted Average Common 208,145,833 196,269,594 208,106,138 188,349,152 Shares and Units Outstanding Adjusted EBITDA Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA) is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission rules. Our interpretation of Adjusted EBITDA is that EBITDA derived from our investment in unconsolidated joint ventures should be added back to net income (loss) as part of reconciling net income (loss) to Adjusted EBITDA. Our Adjusted EBITDA computation may not be comparable to EBITDA or Adjusted EBITDA reported by other companies that interpret the definition of EBITDA differently than we do. Management believes Adjusted EBITDA to be a meaningful measure of a REIT's performance because it is widely followed by industry analysts, lenders and investors and that it should be considered along with, but not as an alternative to, net income, cash flow, FFO and AFFO, as a measure of the company's operating performance. HERSHA HOSPITALITY TRUST Adjusted EBITDA (in thousands) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2013 2012 2013 2012 Net income applicable to $ 14,286 $ 13,093 $ 1,189 $ 2,420 common shareholders (Income) loss from (148 ) (190 ) 248 540 unconsolidated joint ventures Gain on hotel (12,107 ) - (12,107 ) - acquisition Gain on disposition of (1,043 ) (6,949 ) (1,043 ) (11,452 ) hotel properties Loss from impairment of 3,723 - 3,723 - assets Income (Loss) allocated to 210 796 (463 ) 55 noncontrolling interest Non-operating (14 ) (15 ) (46 ) (29 ) interest income Distributions to Preferred 3,589 3,500 7,433 7,000 Shareholders Interest expense from 11,138 10,442 21,558 21,925 continuing operations Interest expense from - 188 - 1,200 discontinued operations Extinguishment of issuance costs upon - - 2,250 - redemption of series A preferred stock Income tax 1,438 - 309 - expense Deferred financing costs written off in 284 240 545 246 debt extinguishment Depreciation and amortization 16,083 13,924 30,957 27,155 from continuing operations Depreciation and amortization 204 187 426 456 from discontinued operations Acquisition and terminated 773 124 776 1,082 transaction costs Non-cash stock compensation 2,439 2,266 4,827 4,399 expense Straight-line amortization of 1 2 2 36 ground lease expense Real estate taxes expense related to - - 434 - reassessment of prior period assessment Adjusted EBITDA from consolidated 40,856 37,608 61,018 55,033 hotel operations Income (loss) from unconsolidated 148 190 (248 ) (540 ) joint venture investments Loss on remeasurement of investment - 224 - 224 in unconsolidated joint ventures Depreciation and amortization of 147 257 301 577 purchase price in excess of historical cost Adjustment for interest in interest expense, depreciation 3,850 6,325 5,990 9,634 and amortization of unconsolidated joint ventures Adjusted EBITDA from unconsolidated 4,145 6,996 6,043 9,895 joint venture operations Adjusted EBITDA $ 45,001 $ 44,604 $ 67,061 $ 64,928 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 and should not be relied on as a measure of performance for our portfolio of hotels taken as a whole. 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 web site, www.hersha.com. Contact: Hersha Hospitality Trust Ashish Parikh, 215-238-1046 CFO
Hersha Hospitality Trust Announces Second Quarter 2013 Results
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