ht-20140930 10-Q Q3

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2014

 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____ to ____

 

COMMISSION FILE NUMBER: 001-14765

 

HERSHA HOSPITALITY TRUST

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

 

251811499

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

 

 

44 Hersha Drive, Harrisburg, PA

 

17102

(Address of Registrant’s Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (717) 236-4400

 

Indicate by check mark whether the registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days.

Yes No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

 

 

 

Large accelerated filer 

Accelerated filer 

 

Non-accelerated filer 

Small reporting company 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes No

 

As of October 30, 2014, the number of Class A common shares of beneficial interest outstanding was 200,742,455  and there were no Class B common shares of beneficial interest outstanding.

 

 


 

 

 Hersha Hospitality Trust

Table of Contents

 

 

 

 

 

 

 

 

PART I.  FINANCIAL INFORMATION

Page

Item 1.

Financial Statements.

 

 

Consolidated Balance Sheets as of September 30, 2014 [Unaudited] and December 31, 2013

 

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013 [Unaudited]

 

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2014 and 2013 [Unaudited]

 

Consolidated Statements of Equity for the Nine Months Ended September 30, 2014 and 2013 [Unaudited]

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013 [Unaudited]

 

Notes to the Consolidated Financial Statements

11 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

36 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

53 

Item 4.

Controls and Procedures.

54 

 

 

 

PART II.  OTHER INFORMATION

 

Item 1.

Legal Proceedings.

55 

Item 1A.

Risk Factors.

55 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

55 

Item 3.

Defaults Upon Senior Securities.

55 

Item 4.

Mine Safety Disclosures.

55 

Item 5.

Other Information.

55 

Item 6.

Exhibits.

56 

 

 

 

 

Signatures

57 

 

 

 

 

 

 

 

 

 

2


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2014 [UNAUDITED] AND DECEMBER 31, 2013

[IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2014

 

December 31, 2013

Assets:

 

 

 

 

 

 

Investment in Hotel Properties, Net of Accumulated Depreciation, Including Consolidation of Variable Interest Entity Assets of $84,624 and $85,759

 

$

1,752,115 

 

$

1,535,835 

Investment in Unconsolidated Joint Ventures

 

 

11,642 

 

 

12,044 

Cash and Cash Equivalents

 

 

37,868 

 

 

36,213 

Escrow Deposits

 

 

20,045 

 

 

25,938 

Hotel Accounts Receivable, Net of Allowance for Doubtful Accounts of $121 and $43

 

 

10,637 

 

 

9,141 

Deferred Financing Costs, Net of Accumulated Amortization of $7,064 and $7,070

 

 

8,226 

 

 

7,570 

Due from Related Parties

 

 

6,803 

 

 

11,124 

Intangible Assets, Net of Accumulated Amortization of $3,406 and $3,227

 

 

7,412 

 

 

7,603 

Deposits on Hotel Acquisitions

 

 

 -

 

 

18,586 

Other Assets

 

 

30,861 

 

 

27,460 

Hotel Assets Held for Sale

 

 

 -

 

 

56,583 

Total Assets

 

$

1,885,609 

 

$

1,748,097 

 

 

 

 

 

 

 

Liabilities and Equity:

 

 

 

 

 

 

Line of Credit

 

$

27,000 

 

$

 -

Unsecured Term Loan

 

 

250,000 

 

 

150,000 

Unsecured Notes Payable

 

 

51,548 

 

 

51,548 

Mortgages Payable, including Net Unamortized Premium and Consolidation of Variable Interest Entity Debt of $54,535 and $55,714

 

 

613,668 

 

 

571,953 

Accounts Payable, Accrued Expenses and Other Liabilities

 

 

56,069 

 

 

40,852 

Dividends and Distributions Payable

 

 

17,905 

 

 

15,955 

Due to Related Parties

 

 

3,096 

 

 

4,815 

Liabilities Related to Hotel Assets Held for Sale

 

 

 -

 

 

45,835 

Total Liabilities

 

$

1,019,286 

 

$

880,958 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

Preferred Shares:  $.01 Par Value, 29,000,000 Shares Authorized, 4,600,000 Series B and 3,000,000 Series C Shares Issued and Outstanding at September 30, 2014 and December 31, 2013, with Liquidation Preferences of $25 Per Share (Note 1)

 

$

76 

 

$

76 

Common Shares:  Class A, $.01 Par Value, 300,000,000 Shares Authorized at September 30, 2014 and December 31, 2013, 200,729,931 and 202,759,419 Shares Issued and Outstanding at September 30, 2014 and December 31, 2013, respectively

 

 

2,008 

 

 

2,028 

Common Shares:  Class B, $.01 Par Value, 1,000,000 Shares Authorized, None Issued and Outstanding at September 30, 2014 and December 31, 2013

 

 

 -

 

 

 -

Accumulated Other Comprehensive Loss

 

 

(90)

 

 

(376)

Additional Paid-in Capital

 

 

1,191,924 

 

 

1,200,798 

Distributions in Excess of Net Income

 

 

(356,567)

 

 

(364,568)

Total Shareholders' Equity

 

 

837,351 

 

 

837,958 

 

 

 

 

 

 

 

Noncontrolling Interests (Note 1):

 

 

 

 

 

 

Noncontrolling Interests - Common Units

 

 

29,871 

 

 

29,523 

Noncontrolling Interests - Consolidated Variable Interest Entity

 

 

(899)

 

 

(342)

Total Noncontrolling Interests

 

 

28,972 

 

 

29,181 

 

 

 

 

 

 

 

Total Equity

 

 

866,323 

 

 

867,139 

 

 

 

 

 

 

 

Total Liabilities and Equity

 

$

1,885,609 

 

$

1,748,097 

 

 

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

3


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2014

 

2013

 

2014

 

2013

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel Operating Revenues

 

$

112,927 

 

$

90,251 

 

$

304,331 

 

$

246,019 

 

Interest Income from Development Loans

 

 

 -

 

 

 -

 

 

 -

 

 

158 

 

Other Revenues

 

 

50 

 

 

80 

 

 

149 

 

 

174 

 

Total Revenues

 

 

112,977 

 

 

90,331 

 

 

304,480 

 

 

246,351 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel Operating Expenses

 

 

60,648 

 

 

50,298 

 

 

166,372 

 

 

137,551 

 

Insurance Recoveries

 

 

 -

 

 

 -

 

 

(4,602)

 

 

(403)

 

Hotel Ground Rent

 

 

710 

 

 

245 

 

 

1,715 

 

 

739 

 

Real Estate and Personal Property Taxes and Property Insurance

 

 

8,034 

 

 

6,331 

 

 

22,020 

 

 

17,754 

 

General and Administrative (including Share Based Payments of $1,595 and $1,992 for the three months ended September 30, 2014 and 2013, respectively, and $4,156 and $6,819 for the nine months ended September 30, 2014 and 2013, respectively)

 

 

5,670 

 

 

5,257 

 

 

14,310 

 

 

16,098 

 

Acquisition and Terminated Transaction Costs

 

 

338 

 

 

27 

 

 

2,144 

 

 

803 

 

Depreciation and Amortization

 

 

18,565 

 

 

14,572 

 

 

52,365 

 

 

41,156 

 

Contingent Consideration Related to Acquisition of Hotel Property

 

 

1,000 

 

 

 -

 

 

1,000 

 

 

 -

 

Total Operating Expenses

 

 

94,965 

 

 

76,730 

 

 

255,324 

 

 

213,698 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

18,012 

 

 

13,601 

 

 

49,156 

 

 

32,653 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

71 

 

 

450 

 

 

746 

 

 

1,375 

 

Interest Expense

 

 

(11,456)

 

 

(10,711)

 

 

(32,249)

 

 

(30,293)

 

Other Expense

 

 

(346)

 

 

(112)

 

 

(476)

 

 

 -

 

Gain on Disposition of Hotel Properties

 

 

 -

 

 

 -

 

 

7,184 

 

 

 -

 

Gain on Hotel Acquisitions, net

 

 

 -

 

 

 -

 

 

13,594 

 

 

12,108 

 

Development Loan Recovery

 

 

 -

 

 

 -

 

 

22,494 

 

 

 -

 

Loss on Debt Extinguishment

 

 

 -

 

 

 -

 

 

(644)

 

 

(545)

 

Income Before Income (Loss) from Unconsolidated Joint Venture Investments, Income Taxes and Discontinued Operations

 

 

6,281 

 

 

3,228 

 

 

59,805 

 

 

15,298 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from Unconsolidated Joint Venture Investments

 

 

607 

 

 

227 

 

 

606 

 

 

(21)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 

6,888 

 

 

3,455 

 

 

60,411 

 

 

15,277 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Benefit

 

 

699 

 

 

2,375 

 

 

806 

 

 

2,282 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

 

7,587 

 

 

5,830 

 

 

61,217 

 

 

17,559 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations  (Note 11):

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Gain on Disposition of Discontinued Assets

 

 

 -

 

 

(11)

 

 

(45)

 

 

1,032 

 

Impairment of Discontinued Assets

 

 

 -

 

 

(6,591)

 

 

(1,800)

 

 

(10,314)

 

Income from Discontinued Operations, Net of Income Taxes

 

 

 -

 

 

3,071 

 

 

288 

 

 

4,432 

 

Loss from Discontinued Operations

 

 

 -

 

 

(3,531)

 

 

(1,557)

 

 

(4,850)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

7,587 

 

 

2,299 

 

 

59,660 

 

 

12,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (Income) Allocated to Noncontrolling Interests

 

 

49 

 

 

164 

 

 

(1,100)

 

 

628 

 

Preferred Distributions

 

 

(3,589)

 

 

(3,589)

 

 

(10,767)

 

 

(11,022)

 

Extinguishment of Issuance Costs Upon Redemption of Series A Preferred Shares

 

 

 -

 

 

 -

 

 

 -

 

 

(2,250)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Applicable to Common Shareholders

 

$

4,047 

 

$

(1,126)

 

$

47,793 

 

$

65 

 

 

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

 

4


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Applicable to Common Shareholders

 

$

0.02 

 

$

0.01 

 

$

0.25 

 

$

0.02 

 

 

Loss from Discontinued Operations Applicable to Common Shareholders

 

 

0.00 

 

 

(0.02)

 

 

(0.01)

 

 

(0.02)

 

 

Net Income (Loss) Applicable to Common Shareholders

 

$

0.02 

 

$

(0.01)

 

$

0.24 

 

$

0.00 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DILUTED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Applicable to Common Shareholders

 

$

0.02 

 

$

0.01 

 

$

0.25 

 

$

0.02 

 

 

Loss from Discontinued Operations Applicable to Common Shareholders

 

 

0.00 

 

 

(0.02)

 

 

(0.01)

 

 

(0.02)

 

 

Net Income (Loss) Applicable to Common Shareholders

 

$

0.02 

 

$

(0.01)

 

$

0.24 

 

$

0.00 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

198,597,517 

 

 

198,878,496 

 

 

199,270,719 

 

 

198,186,963 

 

 

Diluted*

 

 

200,621,986 

 

 

201,644,633 

 

 

201,105,852 

 

 

201,488,088 

 

 

 

*Income (loss) allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and common units of limited partnership interest (“Common Units”) in the Operating Partnership have been omitted from the denominator for the purpose of computing diluted earnings per share since the effect of including these shares and units in the numerator and denominator would have no impact.  In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) from continuing operations applicable to common shareholders.

 

The following table summarizes potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

 

2014

 

2013

 

2014

 

2013

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Units of Limited Partnership Interest

 

 

6,914,716 

 

 

6,914,716 

 

 

6,914,716 

 

 

6,986,004 

 

Total Potentially Dilutive Securities Excluded from the Denominator

 

 

6,914,716 

 

 

6,914,716 

 

 

6,914,716 

 

 

6,986,004 

 

 

The Accompanying Notes Are an Integral Part of These Consolidated Financial Statements.

 

 

 

5


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2014

 

2013

 

2014

 

2013

Net Income

$

7,587 

 

$

2,299 

 

$

59,660 

 

$

12,709 

Other Comprehensive Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

Change in Fair Value of Derivative Instruments

 

1,173 

 

 

(669)

 

 

1,427 

 

 

2,302 

Less: Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income

 

(368)

 

 

(331)

 

 

(1,141)

 

 

(938)

 

$

805 

 

$

(1,000)

 

$

286 

 

$

1,364 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income

 

8,392 

 

 

1,299 

 

 

59,946 

 

 

14,073 

Less:  Comprehensive Loss (Income) Attributable to Noncontrolling Interests

 

49 

 

 

164 

 

 

(1,100)

 

 

628 

Less:  Preferred Distributions

 

(3,589)

 

 

(3,589)

 

 

(10,767)

 

 

(11,022)

Less:  Extinguishment of Issuance Costs Upon Redemption of Series A Preferred Shares

 

 -

 

 

 -

 

 

 -

 

 

(2,250)

Comprehensive Income (Loss) Attributable to Common Shareholders

$

4,852 

 

$

(2,126)

 

$

48,079 

 

$

1,429 

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

 

6


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS, EXCEPT SHARES]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

Noncontrolling Interests

 

 

Common Shares

Class A Common Shares ($)

Class B Common Shares ($)

Preferred Shares

Preferred Shares ($)

Additional Paid-In Capital ($)

Accumulated Other Comprehensive Loss ($)

Distributions in Excess of Net Earnings ($)

Total Shareholders' Equity ($)

 

Common Units

Common Units ($)

Consolidated Variable Interest Entity ($)

Total Noncontrolling Interests ($)

Total Equity ($)

Balance at December 31, 2013

202,759,419 
2,028 

 -

7,600,000 
76 
1,200,798 
(376)
(364,568)
837,958 

 

6,914,716 
29,523 
(342)
29,181 
867,139 

Repurchase of Common Shares

(2,626,854)
(26)

 -

 -

 -

(13,637)

 -

(1,621)
(15,284)

 

 -

 -

 -

 -

(15,284)

Dividends and Distributions declared:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares ($0.19 per share)

 -

 -

 -

 -

 -

 -

 -

(38,171)
(38,171)

 

 -

 -

 -

 -

(38,171)

Preferred Shares

 -

 -

 -

 -

 -

 -

 -

(10,767)
(10,767)

 

 -

 -

 -

 -

(10,767)

Common Units ($0.19 per share)

 -

 -

 -

 -

 -

 -

 -

 -

 -

 

 -

(1,309)

 -

(1,309)
(1,309)

Dividend Reinvestment Plan

6,123 

 -

 -

 -

 -

34 

 -

 -

34 

 

 -

 -

 -

 -

34 

Share Based Compensation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grants

591,243 

 -

 -

 -

403 

 -

 -

409 

 

 -

 -

 -

 -

409 

Amortization

 -

 -

 -

 -

 -

4,326 

 -

 -

4,326 

 

 -

 -

 -

 -

4,326 

Change in Fair Value of Derivative Instruments

 -

 -

 -

 -

 -

 -

286 

 -

286 

 

 -

 -

 -

 -

286 

Net Income

 -

 -

 -

 -

 -

 -

 -

58,560 
58,560 

 

 -

1,657 
(557)
1,100 
59,660 

Balance at September 30, 2014

200,729,931 
2,008 

 -

7,600,000 
76 
1,191,924 
(90)
(356,567)
837,351 

 

6,914,716 
29,871 
(899)
28,972 
866,323 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

 

7


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS, EXCEPT SHARES]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

Noncontrolling Interests

 

Redeemable Noncontrolling Interests

 

Common Shares

Class A Common Shares ($)

Class B Common Shares ($)

Preferred Shares

Preferred Shares ($)

Additional Paid-In Capital ($)

Accumulated Other Comprehensive Loss ($)

Distributions in Excess of Net Earnings ($)

Total Shareholders' Equity ($)

 

Common Units

Common Units ($)

Consolidated Variable Interest Entity ($)

Total Noncontrolling Interests ($)

Total Equity ($)

 

Common Units

Common Units ($)

Balance at December 31, 2012

198,672,356 
1,986 

 -

7,000,000 
70 
1,178,292 
(1,786)
(348,734)
829,828 

 

4,048,254 
15,484 
476 
15,960 
845,788 

 

3,064,252 
15,321 

Unit Conversion/Redemption

27,790 

 -

 -

 -

(234)

 -

 -

(233)

 

(197,790)
(767)

 -

(767)
(1,000)

 

 -

 -

Reallocation of Noncontrolling Interest

 -

 -

 -

 -

 -

 -

 -

 -

 -

 

3,064,252 
15,321 

 -

15,321 
15,321 

 

(3,064,252)
(15,321)

Preferred Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Share Offering, Net of Costs

 -

 -

 -

3,000,000 
30 
72,340 

 -

 -

72,370 

 

 -

 -

 -

 -

72,370 

 

 -

 -

Preferred Share Redemption

 -

 -

 -

(2,400,000)
(24)
(59,976)

 -

 

(60,000)

 

 -

 -

 -

 -

(60,000)

 

 -

 -

Dividends and Distributions declared:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares ($0.18 per share)

 -

 -

 -

 -

 -

 -

 -

(37,572)
(37,572)

 

 -

 -

 -

 -

(37,572)

 

 -

 -

Preferred Shares

 -

 -

 -

 -

 -

 -

 -

(11,022)
(11,022)

 

 -

 -

 -

 -

(11,022)

 

 -

 -

Common Units ($0.18 per share)

 -

 -

 

 -

 

 -

 -

 -

 -

 

 -

(1,254)

 -

(1,254)
(1,254)

 

 -

 -

Dividend Reinvestment Plan

5,122 

 -

 -

 -

 -

27 

 -

 -

27 

 

 -

 -

 -

 -

27 

 

 -

 -

Share Based Compensation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grants

3,968,534 
40 

 -

 -

 -

285 

 -

 -

325 

 

 -

 -

 -

 -

325 

 

 -

 -

Amortization

 -

 -

 -

 -

 -

8,026 

 -

 -

8,026 

 

 -

 -

 -

 -

8,026 

 

 -

 -

Change in Fair Value of Derivative Instruments

 -

 -

 -

 -

 -

 -

1,364 

 -

1,364 

 

 -

 -

 -

 -

1,364 

 

 -

 -

Net Income

 -

 -

 -

 -

 -

 -

 -

13,337 
13,337 

 

 -

(630)
(628)
12,709 

 

 -

 -

Balance at September 30, 2013

202,673,802 
2,027 

 -

7,600,000 
76 
1,198,760 
(422)
(383,991)
816,450 

 

6,914,716 
28,786 
(154)
28,632 
845,082 

 

 -

 -

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

 

 

8


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

Operating Activities:

 

 

 

 

 

 

Net Income

 

$

59,660 

 

$

12,709 

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

 

 

 

 

 

 

Gain on Hotel Acquisitions, net

 

 

(13,594)

 

 

(12,108)

Contingent Consideration

 

 

1,000 

 

 

 -

Development Loan Recovery

 

 

(22,494)

 

 

 -

Gain on Disposition of Hotel Properties

 

 

(7,139)

 

 

(1,032)

Impairment of Hotel Assets

 

 

1,800 

 

 

10,314 

Deferred Taxes

 

 

(806)

 

 

(2,205)

Depreciation

 

 

52,056 

 

 

47,153 

Amortization

 

 

1,468 

 

 

1,930 

Loss on Debt Extinguishment

 

 

644 

 

 

471 

Equity in Loss of Unconsolidated Joint Ventures

 

 

(606)

 

 

21 

Distributions from Unconsolidated Joint Ventures

 

 

911 

 

 

313 

Loss Recognized on Change in Fair Value of Derivative Instrument

 

 

68 

 

 

18 

Share Based Compensation Expense

 

 

4,156 

 

 

6,819 

Change in Assets and Liabilities:

 

 

 

 

 

 

(Increase) Decrease in:

 

 

 

 

 

 

Hotel Accounts Receivable

 

 

(1,624)

 

 

194 

Escrows

 

 

(537)

 

 

(895)

Other Assets

 

 

(844)

 

 

(1,672)

Due from Related Parties

 

 

4,321 

 

 

2,170 

Increase (Decrease) in:

 

 

 

 

 

 

Due to Related Parties

 

 

(1,719)

 

 

2,821 

Accounts Payable, Accrued Expenses and Other Liabilities

 

 

1,782 

 

 

3,172 

Net Cash Provided by Operating Activities

 

$

78,503 

 

$

70,193 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Purchase of Hotel Property Assets

 

$

(175,309)

 

$

(166,388)

Deposits on Hotel Acquisitions, Net

 

 

 -

 

 

1,264 

Capital Expenditures

 

 

(29,297)

 

 

(35,984)

Cash Paid for Hotel Development Projects

 

 

(3,375)

 

 

(16,862)

Proceeds from Disposition of Hotel Properties

 

 

30,128 

 

 

12,000 

Net Changes in Capital Expenditure Escrows

 

 

3,282 

 

 

(1,601)

Proceeds from Insurance Claims

 

 

1,881 

 

 

2,189 

Repayment of Development Loans Receivable

 

 

 -

 

 

15,122 

Distributions from Unconsolidated Joint Venture

 

 

96 

 

 

1,422 

Net Cash Used in Investing Activities

 

$

(172,594)

 

$

(188,838)

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

 

9


 

Table of Contents

 

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013 [UNAUDITED]

[IN THOUSANDS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

Financing Activities:

 

 

 

 

 

 

Proceeds from (Repayments of) Borrowings Under Line of Credit, Net

 

$

27,000 

 

$

79,700 

Proceeds from Unsecured Term Loan Borrowing

 

 

100,000 

 

 

50,000 

Principal Repayment of Mortgages and Notes Payable

 

 

(18,775)

 

 

(52,589)

Proceeds from Mortgages and Notes Payable

 

 

54,500 

 

 

60,000 

Cash Paid for Deferred Financing Costs

 

 

(3,338)

 

 

(2,237)

Proceeds from Issuance of Preferred Shares, Net

 

 

(86)

 

 

72,370 

Redemption of Series A Preferred Shares

 

 

 -

 

 

(60,000)

Repurchase of Common Shares

 

 

(15,284)

 

 

 -

Redemption of Common Partnership Units

 

 

 -

 

 

(1,000)

Settlement of Interest Rate Cap

 

 

(8)

 

 

(565)

Dividends Paid on Common Shares

 

 

(36,251)

 

 

(37,305)

Dividends Paid on Preferred Shares

 

 

(10,767)

 

 

(10,933)

Distributions Paid on Common Partnership Units

 

 

(1,245)

 

 

(1,267)

Net Cash Provided by Financing Activities

 

$

95,746 

 

$

96,174 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash and Cash Equivalents

 

$

1,655 

 

$

(22,471)

Cash and Cash Equivalents - Beginning of Period

 

 

36,213 

 

 

69,059 

 

 

 

 

 

 

 

Cash and Cash Equivalents - End of Period