Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (July 2015)
31 slides from Ashford Hospitality Trust's investor presentation, Jul 15, 2015
Slide 1: Company Presentation - July 2015
1 Company Presentation - July 2015
Slide 2: Safe Harbor
2 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
Slide 3: Compelling Opportunity
Compelling Opportunity 3
Slide 4: Opportunistic Strategy
4 Opportunistic Strategy Predominantly focused on opportunities to invest in upper upscale, full- service hotels in all market locations with the following characteristics: Value-add opportunities Strong yields and outsized growth prospects Markets with favorable supply/demand dynamics Abi
Slide 5: Compelling Opportunity
5 Compelling Opportunity Attractive industry fundamentals with demand growth exceeding supply growth Currently seeking accretive hotel acquisition opportunities Affiliated property manager results in strong operating results and flow- throughs Upcoming refinancings with potential for signifi
Slide 6: Recent Announcements
6 Recent Announcements In June, the Company announced the planned sale of 23 select-service hotels with a total of 4,308 keys, $44.0 million in TTM NOI, and encumbered by approximately $190 million of fixed rate debt and $187 million of maturing or floating rate debt. The proceeds from the sale
Slide 7: Strong Track Record & Performance
7 Strong Track Record & Performance
Slide 8: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 8 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Trailing Total Shareholder Returns as of 7/6/15 Source: Bloomberg Total Shareho
Slide 9: Highly-Aligned Management
Highly-Aligned Management 9 • With insider ownership* of approximately 15% for AHT, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 10: Attractive Dividend Yield & Coverage
10 Attractive Dividend Yield & Coverage • Ashford has both a high dividend yield and strong dividend coverage. 6.3% 5.6% 5.0% 4.5% 4.3% 4.3% 3.9% 3.9% 3.8% 3.8% 3.7% 3.6% 2.9% 2.6% 1.6% 1.3% 1.2x 2.3x 1.7x 1.6x 2.2x 1.9x 1.8x 2.0x 2.6x 2.1x 2.0x 2.3x 2.0x 3.4x 6.3x 6.2x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x
Slide 11: Strong RevPAR Growth
11 Strong RevPAR Growth FY 2014 RevPAR Growth Source: Company filings. • Ashford Trust has delivered strong RevPAR growth versus its peers 11.6% 10.9% 10.5% 9.9% 8.8% 8.0% 7.2% 6.8% 6.1% 5.9% 5.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Q1 2015 RevPAR Growth 13.1% 11.9% 8.5% 7.9% 7.0% 6.9% 6.9% 5
Slide 12: Strong EBITDA Margin Growth
12 Strong EBITDA Margin Growth FY 2014 EBITDA Margin Growth (bps) Source: Company filings. • Ashford Trust has delivered strong EBITDA margin growth versus its peers 274 204 184 160 141 125 119 114 101 94 71 0 50 100 150 200 250 300 Q1 2015 EBITDA Margin Growth (bps) 500 361 245 216 162 140 118 47 3
Slide 13: Attractive Relative Valuation vs. Peers
13 Attractive Relative Valuation vs. Peers Source: Citibank research. • Ashford Trust is trading at an attractive valuation relative to its peers TEV/2016 EBITDA 13.0x 12.1x 12.0x 12.3x 11.7x 11.7x 11.5x 11.0x 9.8x 8.9x 8.9x 6.0 8.0 10.0 12.0 14.0 HT LHO RLJ HST INN SHO DRH FCH CHSP CLDT AHT
Slide 14: Strong Asset Performance
14 2013 2014 Var Q1 2014 Q1 2015 Var RevPAR $95.94 $105.39 9.8% $102.04 $110.69 8.5% Hotel Revenue $1,031,840 $1,117,739 8.3% $305,113 $326,443 7.0% Hotel EBITDA $312,766 $354,513 13.3% $92,757 $104,545 12.7% EBITDA Flow 48.6% 55.3% The above table assumes the properties owned and included in contin
Slide 15: Portfolio Ashford Trust Hotels
15 Portfolio Ashford Trust Hotels
Slide 16: Portfolio Overview
Portfolio Overview 16 52% 30% 4% 3% 5% 6% Ashford Trust Brands by EBITDA Marriott Hilton Hyatt IHG Starwood Independent 31% 60% 5% 3% 1% Ashford Trust Managers by EBITDA Marriott Remington Hilton Hyatt Interstate 71% 20% 9% Ashford Trust MSA by EBITDA Top 25 Top 50 Other 35% 53% 3% 5% 4% Ashford Tru
Slide 17: Capital Structure
Capital Structure 17 • Target Net Debt/Gross Assets of 55-60% • Maintain mix of fixed and floating rate debt – currently 38.3% fixed/61.7% floating* • Ladder maturities • Proactively refinance upcoming maturities • All debt is property-level and non-recourse Balance Sheet Initiatives Debt Maturities
Slide 18: Significant Liquidity
Significant Liquidity 18 • Maintain excess cash balance to capitalize on opportunities – target cash and cash equivalents of 25-35% of equity market capitalization • In Q1 2015 raised over $300 million in excess proceeds from refinancings • Significant additional value through net working capital ba
Slide 19: Attractive Industry Fundamentals
Attractive Industry Fundamentals 19
Slide 20: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 20 Attractive Supply/Demand Imbalance Source: PKF -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F Supply Growth Demand Growth Yea r- o ve r- Yea r % G ro w th PKF Forecast
Slide 21: PKF RevPAR Growth Forecasts
PKF RevPAR Growth Forecasts 21 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.3% 7.2% 6.8% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth
Slide 22: Potential Industry EBITDA Growth Rates
22 Potential Industry EBITDA Growth Rates *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resulting from PKF EBITDA change regression equation. • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estima
Slide 23: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 23 Historical Industry Stock Returns Index includes AHT, BEE, DRH, FCH, HST, HT, LHO, and SHO. Companies are included in the data from the time of their IPO Current data as of May 31, 2015 % 50% 100% 150% 20
Slide 24: Growth & Acquisition Strategy
Growth & Acquisition Strategy 24
Slide 25: Competitive Strengths
25 Competitive Strengths Broad and multi-faceted relationships with both owners and brokers Deep market knowledge across U.S. markets given existing geographic footprint Remington relationship provides ability to underwrite both more thoroughly and more quickly Ability to commit to and perfo
Slide 26: Recent Developments
26 Recent Developments Q1 2015 RevPAR up 8.5%, Hotel EBITDA up 12.7% and EBITDA flow-through was 55% YTD Announced / Closed Transactions: Total Value Fwd Cap Rate JV Share of Highland $490.3 million 7.4% Hampton Inn & Suites Gainesville $25.3 million 9.1% Le Pavillon, New Orleans $62.5 million 7
Slide 27: Marriott Fremont Transaction
27 Marriott Fremont Transaction *TTM through 5/31/15 Strengths/Performance: • Closed on acquisition in August 2014 • Excellent location in strong Silicon Valley hotel market with a diversified customer base • High quality asset with minimal capex needs – recently renovated guestrooms, meeting space
Slide 28: Le Pavillon Transaction
28 Le Pavillon Transaction *TTM through 3/31/15 ** Net of $4 million of key money from Ashford Inc. Strengths/Opportunities: • Excellent location in heart of New Orleans adjacent to historic French Quarter and other major demand generators • New Orleans has a vibrant and growing economy and continue
Slide 29: Accretive Growth
29 Accretive Growth - Ashford Trust management is focused on accretive growth - Our definition of accretion: the 5-year Total Return (TR) post-transaction must be greater than the 5-year Total Return pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (Lever
Slide 30: Corporate Governance Enhancements
30 Corporate Governance Enhancements Recently, Ashford Trust has made a number of positive corporate governance enhancements: Amendment to bylaws providing for a majority voting standard in the election of directors in uncontested elections Amendment to bylaws to permit shareholders to amend t
Slide 31: 31 Company Presentation - July 2015
31 Company Presentation - July 2015
Ashford Hospitality Trust — Investor Presentation (July 2015) on 6ix