Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — NAREIT REITweek June 2012
32 slides from Ashford Hospitality Trust's conference presentation, Jun 12, 2012
Slide 1: NAREIT REITweek June 2012
JAN. NF NAREIT REITWEEK June 2012
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: Economic & Industry Overview
Economic & Industry Overview
Slide 4: U.S. Starting to Deleverage
0% 50% 100% 150% 200% 250% 300% 350% 400% 450% Home Mortgage Consumer Credit Other Household Debt Nonfinancial Business State & Local Government Federal Government Domestic Financial U.S. Starting to Deleverage Total U.S. Debt as a % of GDP 4 Source: U.S. Federal Reserve & Historical Statistics of t
Slide 5: Real GDP Growth
-20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Real GDP Growth % 5 2011 Real GDP Growth: 1.7% Source: U.S. Dept. of Commerce: BEA&Historical Statistics of the United States: - Cambridge
Slide 6: Hotel Demand Driven by Economy
-8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 Real GDP Growth Hotel Demand Growth Hotel Demand Driven by Economy Source: Smith Travel Research & U.S. Dept. of Commerce: BEA Hotel Demand Growth % vs. Real GDP Growth 6 R-squared = 0.61
Slide 7: U.S. Demand Will Outpace Supply
-8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 Y ea r- o v e r- Y ea r % G ro w th Supply Growth Demand Growth U.S. Demand Will Outpace Supply 7 PKF Forecast Source: Smith Travel Research & PKF
Slide 8: Real RevPAR is Cyclical
Real RevPAR is Cyclical Source: Smith Travel Research & U.S. Dept. of Labor: BLS Seasonally-Adjusted Real RevPAR (2012$, Trailing 3-Mo Average) 8 $52 $54 $56 $58 $60 $62 $64 $66 $68 $70 $72 $74
Slide 9: RevPAR Forecast - PKF
7.9% 6.1% -2.0% -16.7% 5.4% 8.2% 5.8% 6.6% 6.9% 4.4% 0.4% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Historical RevPAR Growth Forecasted RevPAR Growth RevPAR Forecast - PKF Source: Smith Travel Research & PKF 9 5-Year RevPAR Growth CAGR: 4.
Slide 10: Potential Industry EBITDA Growth Rates
Potential Industry EBITDA Growth Rates 10 − With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth − PKF estimates 5-year cumulative EBITDA growth of about 40%* *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resu
Slide 11: Attractive Shareholder Returns
Attractive Shareholder Returns 11 − From current real RevPAR levels to cycle peak stock prices, previous cycles averaged 26% total return CAGRs 26% 27% 26% 0% 5% 10% 15% 20% 25% 30% Oct '92 - May '01 Dec '03 - May '07 Average Source: Smith Travel Research, Bloomberg & U.S. Dept. of Labor: BLS Equal-
Slide 12: Projected Hotel Room Value Growth
Projected Hotel Room Value Growth 12 $100,000 $95,000 $81,000 $56,000 $65,000 $78,000 $92,000 $108,000 $116,000 $124,000 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 Private Value of US Hotel Room Source: HVS
Slide 13: Advantages of Lodging REITs
Advantages of Lodging REITs Benefits Dividend paying Tax benefits Inflation hedge High- quality real estate retains value Hard asset Not a financial asset Non- recourse debt Liquidity 13
Slide 14: Company Highlights
Company Highlights
Slide 15: Best-in-Class Asset Management
Best-in-Class Asset Management 15 Best-in-class asset management Strategic relationship with Remington Analytical rigor − Aligned with owners − Rapid response − Check against brands − Constant focus on performance − Question everything − Avoid traditional thinking − Decisions are quantitative − Opti
Slide 16: Remington Outperformance
Remington Outperformance 16 400 bps 700 bps 1,900 bps - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Total Revenue Improvement RevPAR Index Improvement GOP Flow 2007 – 2011 Cumulative Outperformance Remington vs. Non-Remington AHT Managers (bps)
Slide 17: Best-in-Class Asset Management: EBITDA Flow Throughs
Best-in-Class Asset Management 17 − Ashford consistently beats peers in hotel EBITDA flow throughs 39% 8% 49% 41% 50% 51% 37% 53% 104% 63% 0% 20% 40% 60% 80% 100% 120% 2007 2008 2009 2010 2011 Peer Avg AHT Peers include: BEE, CHSP, DRH, FCH, HST, HT, LHO, PEB, SHO Source: Company Filings
Slide 18: Best-in-Class Asset Management: EBITDA Margin Change
Best-in-Class Asset Management 18 − Ashford consistently beats peers in hotel EBITDA margin change 78 (106) (487) 53 132 114 (58) (406) 86 184 (600) (500) (400) (300) (200) (100) - 100 200 300 2007 2008 2009 2010 2011 Peer Avg AHT In basis points Peers include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, LH
Slide 19: Attractive Dividend Yield & Coverage
Attractive Dividend Yield & Coverage 19 − Ashford has both a high dividend yield and strong dividend coverage 6.0% 5.3% 4.9% 4.6% 3.2% 3.0% 2.5% 2.2% 1.6% - - - 1.4x 4.3x 1.4x 1.6x 2.0x 3.7x 2.5x 2.1x 5.1x - 1.0 2.0 3.0 4.0 5.0 6.0 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% CLDT AHT CHSP HT DRH LHO Pee
Slide 20: Total Shareholder Return
-3% 15% 97% -26% -48% -37% -19% 8% -37% 20% 104% 64% -11% -3% 18% 43% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 1-Yr 2-Yr 3-Yr 4-Yr 5-Yr 6-Yr 7-Yr 8-Yr Peer Avg. AHT Total Shareholder Return 20 Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, LHO, PEB, SHO Trailing Total Shareholder Retu
Slide 21: Most Highly-Aligned Management
Most Highly-Aligned Management 21 21% 15% 5% 3% 3% 2% 2% 1% 1% 1% 1% 0% 5% 10% 15% 20% 25% AHT HT CLDT FCH HST CHSP SHO DRH BEE LHO PEB Insider ownership % Source: Company Filings
Slide 22: Upcoming Maturities & Debt Yields
Upcoming Maturities & Debt Yields 22 − Upcoming maturities through 2014 include: − TTM March 2012 weighted average debt yields on these maturities are 13.1% (excluding Hilton El Conquistador, which has negative NOI) Aareal Torrey Pines / Capital Hilton $144.7M Matures Aug 2013 13.2% TTM Debt Yield H
Slide 23: Available Liquidity
Available Liquidity 23 Available Liquidity Undrawn $145m credit facility $150m of unrestricted cash at end of Q1 ‘12 Preferred equity ATM facility Common equity ATM facility Potential refinancing proceeds Excess cash flow
Slide 24: Safety & Optionality
Safety & Optionality 24 • Approximately 100-120% of equity value • ~$2.0 billion of debt • Positive cash flow • Weighted average maturity of 3.6 years • All debt non-recourse Portfolio A: Safety • Approximately 0-(20)% of equity value • $1.0 to $1.2 billion of debt • Positive cash flow • Weighted av
Slide 25: Highland Hospitality Update
& Highland Hospitality Update
Slide 26: Highland Opportunities
Highland Opportunities 26 Franchise properties • Looking for opportunities to create long-term value and operational efficiency through Remington management • Hilton Back Bay, Hyatt Windwatch and two more in process Operating flow throughs • Right-sizing the cost structure • Bringing best practices
Slide 27: Highland Year One GOP Flows
Highland Year One GOP Flows 27 25.20% 102.70% 0% 20% 40% 60% 80% 100% 120% One Year Pre-Takeover One Year Post-Takeover
Slide 28: Highland NOI Exceeds Underwriting
Highland NOI Exceeds Underwriting 28 $79 $82 $86 $88 $91 $87 $72 $74 $76 $78 $80 $82 $84 $86 $88 $90 $92 Mar 2011 TTM Jun 2011 TTM Sep 2011 TTM Dec 2011 TTM Mar 2012 TTM U/W for Mar 2012 NOI $ (in m il lion s )
Slide 29: Significant Operational Upside
Significant Operational Upside 29 60% 65% 70% 75% 80% 85% 90% 95% 100% 2007 2008 2009 2010 2011 TTM Mar 2012 Legacy Highland 700 bps Opportunity % of Peak EBITDA − If Highland EBITDA was same % of peak level as Legacy, its EBITDA would be nearly $10 million higher ($1.40 of equity value at 12x multi
Slide 30: Next Steps for Ashford
ke Next Steps for Ashford
Slide 31: Next Steps for Ashford
• Focus on growing Highland revenues • Growing EBITDA is best way to create shareholder value Intense operational focus to grow EBITDA • Build cash balance in preparation for next downturn Grow cash balance • Must be long-term accretive to stock price • Franchised, full-service preferred • Domestic
Slide 32: NAREIT REITweek June 2012
JAN. NF NAREIT REITWEEK June 2012
Ashford Hospitality Trust — NAREIT REITweek June 2012 on 6ix