Humphrey Hospitality Trust, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2001
COLUMBIA, Md.–(BUSINESS WIRE)–April 2, 2002–Humphrey Hospitality Trust, Inc. (NASDAQ:HUMP), a real estate investment trust (REIT) with 90 limited service hotel properties, today announced its results for the fourth quarter and year ended December 31, 2001.
Fourth Quarter Results
Funds from operations (FFO) represented a loss of $1.2 million, or ($.10) per basic and diluted share (per share), for the fourth quarter of 2001, versus $4.1 million, or $.34 per share for the same quarter in 2000.
Earnings per share represented a net loss of ($.29) per share, or ($3.2) million for the fourth quarter of 2001, compared to earnings of $1.7 million, or $.14 per share, for the 2000 fourth quarter.
Revenue per available room (RevPAR) was $27.01 for the fourth quarter of 2001, down $1.94, or 6.7%, from the same quarter last year. The RevPAR decline was driven by lower occupancy (55.3%) during the fourth quarter of 2001, down 4.2 points from an occupancy level of 59.5% reported for the same quarter in 2000.
Average daily rate (ADR) of $48.80 was up $.16, or .3%, for the fourth quarter of 2001, versus ADR of $48.65 for the 2000 fourth quarter.
Full-Year Results
FFO was $10.6 million, or $.88 per share, for the year ended December 31, 2001, versus $16.3 million, or $1.36 per share, for the year ended December 31, 2000. Net earnings for 2001 were $.7 million, or $.06 per share, compared to $7.0 million, or $.62 per share, for 2000.
RevPAR was $31.42 for the year ended December 31, 2001, down $1.36, or 4.1%, from the same period last year. Occupancy for the year ended December 31, 2001 was 62.2%, down 2.8 points from an occupancy level of 65.0% reported for the same period in 2000. ADR of $50.47 was up $.08, or .2%, for the year ended December 31, 2001, versus ADR of $50.39 for the same period in 2000.
The net loss reported by the company for the fourth quarter of 2001 reflects the payment of a $400,000 lease termination fee to the Company's lessee, Humphrey Hospitality Management, Inc. (the Lessee), as well as the negotiated reduction of rents payable by the Lessee during the 2001 fourth quarter ($3.7 million).
Our fourth quarter 2001 earnings reflect a number of non-recurring restructuring transactions that should help to better position our company for the future said Randy Whittemore, Humphrey Hospitality Trust's President and CEO. By forming a taxable REIT subsidiary (TRS) and terminating our leases with the Lessee, we should be better positioned to benefit from the recovering economy and the expected improvement in the hotel industry, noted Mr. Whittemore.
While the terrorist attacks of September 11, 2001 were unprecedented, and the effects from the dramatic events continue to impact the national economy, such events should not significantly impact the long-term operations of our Company. Our hotels are primarily located in markets that are more dependent on transient highway travelers, with only four of our properties being located near major airports, added Mr. Whittemore.
Mr. Whittemore stated, The reductions in RevPAR for our portfolio are due principally to the lingering effects of the 2001 recession, as well as the significant growth in new hotel development that has penetrated some of our key markets such as Texas (market represents 11% or 10 hotels of our 90 hotel portfolio). Our strategy, to divest of non-strategic hotels, includes a focus on reducing our exposure to significant concentrations of hotels in areas experiencing continued new hotel development and declining demand. Additionally, the use of proceeds from divestitures, to more rapidly reduce our outstanding debt, will improve the Company's ability to manage its operations during periods of economic uncertainty.
Humphrey Hospitality Trust, Inc. is a real estate investment trust specializing in limited-service lodging. The company owns 90 hotels in 19 mid-western and eastern states. More information on Humphrey Hospitality can be found at www.humphreyhospitality.com.
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 risks are discussed in the Company's filings with the Securities and Exchange Commission.
(in thousands except per share data)
Quarters ended Years ended
December 31, December 31,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Revenues
Base and
percentage
rents $2,198 8,145 22,883 32,844
Room rentals and
other hotel
services 1,849 — 5,327 —
Other 132 170 267 351
4,179 8,315 28,477 33,195
Expenses
Interest 2,565 2,868 10,522 10,843
Depreciation 1,935 2,170 8,204 8,382
General and
administrative 890 514 2,730 2,383
Hotel and property
operations 1,569 858 4,237 3,639
Lease cancellation
expense 400 — 400 —
7,359 6,410 26,093 25,247
Earnings before gain
(loss) on disposition
of assets and
provision for
impairment loss and
minority interest (3,180) 1,905 2,384 7,948
Gain (loss) on
disposition of assets
and provision for
impairment loss 37 (33) (1,153) (401)
Minority interest (86) (179) (522) (588)
Net earnings (3,229) 1,693 709 6,959
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Net earnings per
share – basic and
diluted $(0.29) 0.14 0.06 0.62
======== ======== ======== ========
Reconciliation of
net earnings to FFO
Net earnings $(3,229) 1,693 709 6,959
Depreciation 1,935 2,170 8,204 8,382
(Gain) loss on
disposition of
assets and
provision for
impairment loss (37) 33 1,153 401
Minority interest 86 179 522 588
FFO $(1,245) 4,075 10,588 16,330
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FFO per share $(0.10) 0.34 0.88 1.36
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