Per-share EBITDA before special charge in the fourth quarter 1998 was $0.31 per diluted share. The diluted weighted average shares outstanding in the fourth quarter 1999 were 141.6-million shares, compared with 57.5-million shares in the fourth quarter 1998. Aggregate EBITDA for the fourth quarter 1999 was $27.3 million, compared to $17.6 million before special charge in the fourth quarter 1998. 

Homestead reported diluted net earnings before special charge of $0.08 per share in the fourth quarter 1999, compared with a net loss before special charge of $(0.09) per share in the fourth quarter of 1998. Aggregate earnings for the fourth quarter 1999 were $9.3 million, compared to a net loss before special charge of $(3.6) million in the fourth quarter 1998.  

James Potts, the chief operating officer of Homestead, said, �In the fourth quarter of 1999, Homestead�s management team continued to maximize the profitability of Homestead�s assets. We are particularly pleased with the company�s performance in the fourth quarter, since it is typically one of the most difficult quarters for the lodging industry. Early indications for the first quarter 2000 suggest that our properties are continuing to perform well.�

Homestead�s fourth quarter property-level performance reflected an increase in RevPAR (revenue per available room) for the total portfolio and on a same-store basis. Fourth quarter 1999 weekly RevPAR for the total portfolio increased 19.8% to $246, compared to $206 in the fourth quarter 1998. The average weekly rate increased 10.5% to $345 in the fourth quarter (from $312 in the prior year period), while fourth quarter occupancy increased 560 basis points, from 65.8% in fourth quarter 1998 to 71.4% in fourth quarter 1999. The property-level operating margin for the total portfolio was 56.3% in the fourth quarter 1999 compared to 58.2% margin in the fourth quarter 1998. The fourth quarter 1999 operating margin is in-line with management�s expectations; the higher margin in the fourth quarter 1998 was the result of several factors, including a larger number of pre-stabilized properties in the company�s portfolio.
 
 

Weekly RevPAR for the company�s 89 same-store properties was $224 in the fourth quarter 1999, a 4.9% increase over the same-store RevPAR of $213 for the year ago period. The company�s �same-store� results include only properties that were both operational and stabilized during both periods. Same-store weekly rate increased 6.2% to $318 from $300, while occupancy declined 80 basis points from 71.1% in the fourth quarter 1998 to 70.3% in the fourth quarter 1999. Thirty-eight of
Homestead�s same-store properties are in Texas, New Mexico and the Southeast, markets that have been generally impacted by an oversupply of extended-stay properties.

Results for Full-Year 1999

Homestead�s full-year 1999 EBITDA before special charge was $0.88 per diluted share.  Per-share EBITDA before special charge in the full-year 1998 was $0.98 per diluted share.  The weighted average diluted shares outstanding in 1999 increased 76.5% over 1998, from 60.9-million weighted average shares in 1998 to 107.6-million weighted average shares in 1999.  Aggregate EBITDA before special charge for the year 1999 was $94.6 million, compared to $59.8 million in 1998.  Homestead reported a diluted net loss before special charge of $(0.07) per share in 1999, compared with a net loss before special charge of $(0.58) per share in 1998.

Homestead�s full-year 1999 property-level performance reflected an increase in RevPAR for the total portfolio and on a same-store basis. Full-year 1999 weekly RevPAR for the total portfolio increased 15.6% to $245, compared to $212 in 1998. The average weekly rate increased 16.0% to $349 in 1999 (from $301 in the prior year). Average occupancy in 1999 was 70.2%, 20 basis points lower than the average occupancy for 1998 of 70.4%.  The goal of Homestead�s management is for the property-level operating margin to be between 55% and 57% on a calendar-year basis. For the full-year 1999, the property-level operating margin was 56.3%, compared with an operating margin of 59.2% in 1998. Under the new management team, Homestead�s average operating margin was 58.2% in the third and fourth quarters of 1999, compared to the 54.2% average operating margin in the first and second quarters of 1999.

Land-Held-for-Sale

Homestead has sold twelve of its 23 parcels of land-held-for-sale with net proceeds of $73.1 million.  An additional five land parcels are under contract with estimated net proceeds of approximately $17.7 million.  The total net proceeds from these 17 parcels would be approximately $90.8 million or 95% of
the $95.5 million carrying value of the land-held-for-sale.  Proceeds from the land sales have been used primarily to retire debt.  David Dressler, president of Homestead, said, �While the timing of the sales, as well as the proceeds, can vary until a purchaser has waived all contingencies in a contract or the
transaction has closed, we anticipate that the proceeds from land sales will be adequate to recover the company�s carrying value in the assets.�

Reduction in Overhead Costs

In May 1999, Homestead�s management established a goal of reducing its overhead to reflect a company with stabilized operations of 136 properties.

In the first quarter 1999, total overhead costs were $48.6 million on an annualized basis.  In the fourth quarter 1999, on an annualized basis overhead costs had been reduced 44% to $27.2 million.  In the first quarter of 2000, the overhead run rate is approximately $25 million on an annualized basis.

Reduction in Debt and Long-Term Liabilities

Homestead has been using some of its cash from operations and most of the proceeds from the land-held-for-sale transactions to pay-down its debt obligations.  As of December 31, 1999, Homestead�s debt obligations totaled approximately $487.6 million, including the company�s $141-million capital lease obligation.  As of January 31, 2000, the total debt and long-term
liabilities had been reduced to $480.3 million, a 32.2% reduction from yearend 1998.  As of January 31, 2000, debt and long-term liabilities were 42.7% of total assets, compared to 58.2% at yearend 1998.

C. Ronald Blankenship, the interim chairman and chief executive officer of Homestead, stated that, �The combination of Homestead�s reduced debt levels and the expectation of continued growth in the company�s cash flow from operations will allow Homestead�s management to take advantage of market opportunities and to concentrate on strategies for enhancing shareholder value.�

Homestead Village, based in Atlanta, Georgia, is an owner and operator of 136 extended stay lodging facilities in 28 states.  Focused on the business traveler, Homestead has developed an operating system designed to ensure a consistent, high-quality, uniform lodging experience.

In addition to historical information, this news release contains forward-looking statements under the federal securities laws.  These statements are based on current expectations, estimates and projections about the industry and markets in which Homestead operates, management�s beliefs, and assumptions made by management.