Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — JP Morgan Conference March 2008
20 slides from Ashford Hospitality Trust's conference presentation, Mar 28, 2008
Slide 1: JP Morgan Conference March 2008
JP Morgan Conference March 2008
Slide 2: Safe Harbor
Safe Harbor In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely r
Slide 3: Ashford Advantage
Ashford Advantage AHT's diversified platform should perform better in periods of economic uncertainty AHT's risk profile is mitigated by its capital recycling strategies AHT's strategies are designed to further secure the dividend AHT's dividend is covered by the operating business. Its capital recy
Slide 4: Ashford Snapshot
Ashford Snapshot Portfolio Statistics AHT Total Enterprise Value (1) $3.7 Bil Peer Comparison (2) 3rd largest # of Hotels 110 # of Rooms 25,483 ADR (3) $137.80 RevPAR (3) $101.61 RevPAR Growth (3) 7.2% Financial Statistics # Shares Outstanding(4) 141.7 M Avg. Daily Trading Volume (3 Month) 1.5 M 200
Slide 5: Despite economic uncertainty, AHT provides attractive risk adjusted returns
Despite economic uncertainty, AHT provides attractive risk adjusted returns: Diversified hotel portfolio yields less volatile income stream Chain scale Brand Geography Investment strategy Flexible capital recycling provides opportunities throughout the entire hotel cycle Mezz Stock buybacks ROI cape
Slide 6: Attractive Dividend
Attractive Dividend Dividend covered by operating business Strong dividend CAD/AFFO coverage: 2007 - 1.20x CAD coverage 2007 - 1.52x AFFO coverage Consistently paid one of the highest covered dividends of lodging REIT peers Highest in peer group with dividend yield of 13.4%(1) Assumes 3/20/08 stock
Slide 7: Capital Strategy
Capital Strategy Because of AHT's flexible capital recycling platform, several accretive opportunities exist in the near-term AHT's capital recycling strategies are currently match funded through asset sales and cash flow above our dividend 2008 Capital Strategy 2008 Capital Strategy Sources of Capi
Slide 8: Potential Asset Sales
Potential Asset Sales Since its IPO, AHT has sold 41 assets, including 2 office buildings, for $522 million Weighted average cap on TTM NOI of 6.7% In 2007, AHT sold 22 assets for $380 million AHT plans to dispose of at least $600 million of hotel assets through outright sale or JVs AHT is actively
Slide 9: Mezzanine Opportunities
Mezzanine Opportunities 2003 - 2005 2006 - Early 2007 Late 2007 - Present Market Spreads Float Fixed Float Fixed L + 800 - 1,200 N/A L + 275 - 500 N/A L + 600 - 900 12.0% - 14.0% Covenants Covenants Covenants Tight Loose Tight AHT Loans Float Fixed Float Fixed 12 2 3 0 2 2 $ Value of Loans(1) Float
Slide 10: PREI Joint Venture
PREI Joint Venture AHT has partnered with Prudential Real Estate Investors (PREI) to form a hotel lending joint venture Advantage of JV structure Provides opportunity to achieve outsized yields at same or less risky LTVs Creates access to a greater number of deals, which increases diversity, reduces
Slide 11: Recent Mezzanine Originations
Recent Mezzanine Originations Westin Resort Portfolio Hotel La Jolla Ritz-Carlton Key Biscayne JER Portfolio Properties 2 Westin resorts (Tucson, AZ) (Hilton Head, SC) Hotel La Jolla (La Jolla, CA) Ritz-Carlton Key Biscayne (Miami, FL) 22 full-service 7 select-service Keys 899 108 302 188 Condo Unit
Slide 12: 2008 Capex Plan
2008 Capex Plan $190 million of potential capital expenditure in 2008 AHT is contractually obligated or has already initiated $80 million of projects and has the flexibility to defer other projects to 2009 - 2010 $60 million are normal capex projects $50 million are discretionary ROI projects Severa
Slide 13: Share Buybacks
Share Buybacks $50m share repurchase program approved by the Board in December 2007 AHT repurchased 2.4m shares of common stock at an average price of $7.67 during the fourth quarter Approx. $25 million of share repurchase authorization remains Accretive use of capital given AHT's current stock pric
Slide 14: Debt Swap Strategy
Debt Swap Strategy AHT swapped $1.8 billion of its existing fixed-rate debt for floating-rate debt in March 2008 5-year swap Weighted average interest rate on fixed-rate debt of 5.84% Interest rate on swapped fixed-rate debt of L + 264 25 bps reduction in LIBOR yields annual net interest expense sav
Slide 15: Debt Maturity Schedule
Debt Maturity Schedule 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total 74 126 122 257 339 0 111 261 396 981 Clear 74 126 122 257 339 0 111 261 396 981 Debt Maturities ($m) Note: Company estimates as of 4Q '07. Last dollar of debt includes debt attributable to JV partners, mezzanine platform
Slide 16: Ashford has the broadest diversification of hotel assets
Ashford has the broadest diversification of hotel assets Advantages: Diversifies exposure across economic markets High quality select service assets provide stability 35% of 2007 EBITDA High concentration of EBITDA in top 25 markets 77% of 2007 EBITDA Less concentrated risk to new supply Mezzanine l
Slide 17: Broad Portfolio Mix
Broad Portfolio Mix Marriott Hilton Hyatt Starwood IHG Other 0.483 0.332 0.08 0.071 0.029 0.005 Marriott Remington Hilton Hyatt Starwood Interstate Hotel Equities 0.423 0.262 0.179 0.08 0.026 0.017 0.013 Brand Manager Note: Proforma based on TTM 12/31/07 owned EBITDA for the 110 hotels in continuing
Slide 18: Recession Plan
Recession Plan In light of uncertainty regarding 2008 economic environment, all property managers have created contingency plans Submit plans based on 2%, 5% or 10% decline in revenues Goal to maintain 50% GOP flow through cost-cutting initiatives AHT asset management is proactively monitoring hotel
Slide 19: Ashford Advantage
Ashford Advantage AHT's diversified platform should perform better in periods of economic uncertainty AHT's risk profile is mitigated by its capital recycling strategies AHT's strategies are designed to further secure the dividend AHT's dividend is covered by the operating business. Its capital recy
Slide 20: JP Morgan Conference March 2008
JP Morgan Conference March 2008
Ashford Hospitality Trust — JP Morgan Conference March 2008 on 6ix