Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (May 2019)
34 slides from Ashford Hospitality Trust's investor presentation, May 22, 2019
Slide 1: Ashford Hospitality Trust May 2019
JAW ASHFORD HOSPITALITY TRUST May 201 9 A
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures 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.
Slide 3: Goals and Strategy
Goals OUTPERFORM Deliver strong shareholder returns vs. peers Strategy PROTECT Protect shareholder investment through disciplined capital Opportunistically own, management strategies finance, and asset manage predominantly full–service, upper upscale hotels GROW Increase the quality and performance
Slide 4: Experienced Management Team
Experienced Management Team Jeremy Welter Deric Eubanks Douglas Kessler J. Robison Hays Robert Haiman C h i e f O p e r a t i n g Chief Financial C h i e f E x e c u t i v e C h i e f S t r a t e g y EVP, General O f f i c e r O f f i c e r Officer/President O f f i c e r C o u n s e l . 14 years of
Slide 5: Reasons to Own Ashford Hospitality Trust
Reasons to Own Ashford Hospitality Trust PORTFOLIO QUALITY STRATEGIC FOCUS INSIDER OWNERSHIP ERFP PROGRAM High quality portfolio presents a Strategy intended to maximize Highest insider ownership among peers Innovative program provides a potentially attractive investment investment opportunity and v
Slide 6: Key Metrics Portfolio Overview
Key Metrics Portfolio Overview 121 25,579 31 $126 $6.1B HOTELS (1) HOTEL ROOMS ( 1 ) STATES R e v P A R ( 1 ) ( 2 ) GROSS ASSETS Portfolio by Hotel EBITDA(1)(2) IHG INTERSTATE 2% HYATT LUXURY MARRIOTT <1% 5% UPPER HYATT 4% 56% REMINGTON MIDSCALE 4% SELECT-SERVICE 3% 59% 28% INDEPENDENT HILTON 5% IND
Slide 7: Portfolio Position Geographically Diverse
Portfolio Position Geographically Diverse Portfolio by Hotel EBITDA(1)(2) INTERSTATE <1% OTHER RESORT 10% 8% 3% TOP 50 18% AIRPORT SMALL TOWN/ METRO 15% Location MSA’s Type (3) Top 10 Markets 2019 Q1 TTM % of Total Washington DC $46,943 9.8% San Fran/Oakland, CA $42,385 8.8% New York/New Jersey $37,
Slide 8: Strategic Rationale Full-Service & Upper Upscale
Strategic Rationale Full-Service & Upper Upscale 2018 DEAL FLOW(1) VALUE-ADD Full-Service Limited-Service (Luxury) $13.8B $6.6B 28% 14% 41% OF TOTAL UPPER UPSCALE ROOMS ARE FRANCHISED(2) YIELD 6.5% - 8.5% Full-Service ESTIMATED CAP RATES (Non-Luxury) 27.9B 58% Limited-Service Full-Service (Non-Luxur
Slide 9: Highest Insider Ownership Among Peers
Highest INSIDER OWNERSHIP AMONG PEERS 20% 18% 17.2% 16% 14.3% 14% 12% 10.6% 10% 8% 6.5% 6% 3.7% 3.6% 4% 2.7% 2.3% 1.7% 1.6% 1.3% 1.1% 2% 1.0% 0.9% 0.5% 0% AHT(1) BHR(1) HT APLE Peer CLDT CHSP INN RLJ XHR PEB HST SHO DRH PK Avg. #1 4.6x $117M Aligned Management Team(3) More insider ownership vs. Tota
Slide 10: Enhanced Return Funding Program
Maximize Value Enhanced Return Funding Program • $50M ERFP commitment from Ashford Inc. • 2 year term • 10% of purchase price • Funding comes in form of purchased FF&E • Potential to upsize to $100M by mutual agreement GOALS • Enhance overall shareholder returns • Apply towards $500M new acquisition
Slide 11: Hotel EBITDA Performance Relative to Peers
Relative to Peers Hotel EBITDA Performance Cumulative Hotel EBITDA Growth 30% AHT Peer Avg. 5 years of cumulative 25% EBITDA growth 20% outperformance 15% 10% 2014 2015 2016 2017 2018 2019 Q1 Peer group: CHSP, DRH, HT, HST, LHO, RLJ, PK, PEB, XHR, SHO Note: comparable results as reported 11
Slide 12: Track Record Disciplined Capital Management
Track Record Disciplined Capital Management COMMON SHARE BUYBACKS Track record of enhancing shareholder returns by capitalizing upon cyclical changes and 73.6M ~50% $3.28 advantageous pricing situations(1) SHARES SHARES AVERAGE OUTSTANDING BUYBACK $1,400 PRICE Financial Crisis $1,200 $200 PREFERRED
Slide 13: Affiliate Competitive Advantages
Affiliate Competitive Advantages AFFILIATED COMPANIES PLATFORM Intended to drive performance, guest satisfaction, and revenue Intended to maximize outperformance vs. peers Mobile interface for guest check-in and room access Scale with major hotel brands Audio visual services for banquets, meetings,
Slide 14: Transactions
WIN ASHFORD HOSPITALITY TRUST Transac tions A
Slide 15: Acquisitions Using ERFP
“Making Good Deals Great”( 1 ) Acquisitions Using ERFP Hilton Alexandria La Posada de Embassy Suites Hilton Santa Cruz O l d T o w n Santa Fe M a n h a t t a n Scott’s Valley Acquisition Price $111M Acquisition Price $50M Acquisition Price $195M Acquisition Price $50M ERFP ERFP ERFP ERFP $11.1M $5M
Slide 16: Asset Sales Financially Calibrated
Asset Sales Financially Calibrated ASSETS SOLD SINCE 2015 SALE OF MAINLY SELECT-SERVICE HOTELS HAMPTON INN TERRE HAUTE $375M COURTYARD MARRIOTT VILLAGE LAKE BUENA VISTA SALES PROCEEDS SPRINGHILL SUITES LAKE BUENA VISTA FAIRFIELD INN LAKE BUENA VISTA DISPOSING OF LOWER REVPAR HOTELS RESIDENCE INN ATL
Slide 17: Balance Sheet
WIN ASHFORD HOSPITALITY TRUST Balance Sheet A
Slide 18: Strategic Rationale Non-Recourse Debt
Strategic Rationale Non-Recourse Debt Benefits of Non - Recourse Debt Total Enterprise Value • Non-recourse debt seeks to lower risk profile Stock Price(1) $5.48 of platform Fully Diluted Shares Outstanding(2) 124.0 • Intended to maximize flexibility in a variety Equity Value $679.7 economic environ
Slide 19: Value Enhancement Through Recent Refinancings
Value Enhancement Through Recent Refinancings Strategic Rationale L+4.95% L+2.92% L+4.39% L+3.20% Extend Maturity 8 - P a c k – J a n 2 0 1 8 22- P a c k – A p r 2 0 1 8 Greater Flexibility ~$11.0M in annual debt service ~$6.8M in annual debt savings over prior loan terms service savings over pr
Slide 20: Well-Laddered Debt Maturity Schedule
Well- Laddered Debt Maturity Schedule (1) Weighted average maturity is now 5.5 years $4,000 $3,500 $3,000 $2,500 $2,000 $3,383.5 n Millions)n I $1,500 ($ ($ $1,000 $500 $113.1 $230.7 $25.0 $5.2 $52.6 $220.5 $0 $93.0 2019 2020 2021 2022 2023 Thereafter Fixed-Rate Floating-Rate 5.74% 2019 Total Portfo
Slide 21: Strategic Cash Target
Strategic Cash Target Financial Crisis Current Cycle Positioned to buy back approximately 50% of Flexibility to execute opportunistic outstanding common shares for about $240M growth and maintain hedge against an leading to outsized total shareholder returns economic downturn Financial Crisis Curren
Slide 22: Asset Management Initiatives
Asset Management Initiatives
Slide 23: Capital Improvements Contribute to Growth
Capital Improvements Contribute to Growth Hotel CapEx Invested $250,000 15.4% 16.0% $221,960 $225,000 $207,325 15.1% $204,040 15.0% $200,000 $175,159 14.5% $175,000 14.0% $150,000 13.7% $125,000 $120,105 13.1% 13.0% $96,285 $100,000 ($ ($ InThousands) 12.0% $75,000 $50,000 $37,982 11.0% $25,000 10.6
Slide 24: Case Study: Hyatt Regency Savannah Capital Improvements
C a s e S t u d y Hyatt Regency Savannah Capital Improvements $ 1 0 . 7 M $ 8 . 4 M Invested in lobby, meeting space, and Invested in guestrooms and corridors restaurant $10 Renovation Period Performance Comparison Hotel EBITDA $9 RevPAR Index(3) $8 109.2 130.2 (3) ($ ($ InMillions) $7 Value Added $
Slide 25: Case Study: Marriott Beverly Hills Rebranding
C a s e S t u d y Marriott Beverly Hills Rebranding (1) O n l y f u l l - Incremental Value Added $ 1 1 . 0 M service Marriott Revenue: 5,950bps Occ: 950bps incremental w i t h i n 6 - m i l e ADR: 4,640bps RevPAR: $90.14 C a p E x r a d i u s Value Creation(2): $68.8M 130 $13 125 $12 120 $11 115 11
Slide 26: Case Study: Marriott DFW Franchise Conversion
C a s e S t u d y Marriott DFW Franchise Conversion 491 18,522 s q . f t . Keys Meeting Space • Realigned and retrained sales staff to effectively target under-performing market segments • Shifted business mix by prioritizing transient and enforcing group ceilings over high demand periods • Implemen
Slide 27: Opportunity Revenue Initiatives
Opportunity Revenue Initiatives Aggressive strategy to increase ancillary revenue $2.2M $3.7M $400K $4.6M Resort Fee Parking Early Arrival/ Other Charge Late Departure Total Added Revenue(1): $10.9M (1) 2018 estimated ancillary revenue 27
Slide 28: Valuation
WIN ASHFORD HOSPITALITY TRUST Valuation A
Slide 29: Valuation TEV / 2019E EBITDA Multiple
Valuation TEV / 2019E EBITDA MULTIPLE(1),(2) 15.0x 14.3x 14.0x 13.2x 13.0x 12.6x 12.1x 11.9x 11.9x 12.0x 11.5x 11.4x 10.9x 11.0x 11.0x 10.0x 9.0x HST RLJ CLDT SHO DRH AHT Peer Avg HT INN CHSP (1) Balance sheet data as of March 31, 2019; stock price as of May 8, 2019 (2) Based on consensus estimates.
Slide 30: Reasons to Own Ashford Hospitality Trust
STRATEGIC FOCUS PORTFOLIO QUALITY ERFP PROGRAM DIVIDEND YIELD Reasons to Own Ashford Hospitality Trust ASSET MANAGEMENT TRACK RECORD(1) AFFILIATE ADVANTAGES INSIDER OWNERSHIP (1) Past performance is not indicative of future results
Slide 31: Appendix
JAW ASHFORD HOSPITALITY TRUST APPENDIX A
Slide 32: GAAP Reconciliation Embassy Suites Manhattan
GAAP Reconciliation Ashford Hospitality Trust Embassy Suites Manhattan Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income (Unaudited, in millions) 12 Months Ended December 31, 2018 Hotel Net Income $ 1.0 Adjustment: Depreciation and amortization $ 2.3 Interest expense
Slide 33: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA (In thousands) 2019 2018 2018 2018 Q1 2019 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter TTM Net income (loss) $ 38,235 $ 10,820 $ 42,925 $ 68,862 $ 160,842 Non-property adjustments (268 ) 20,730 (17 ) (394 ) 20,051 Interest income (76
Slide 34: Ashford Hospitality Trust
JAW ASHFORD HOSPITALITY TRUST May 201 9 A
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