Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (March 2018)
25 slides from Ashford Hospitality Trust's investor presentation, Mar 15, 2018
Slide 1: March 2018
March 2018
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures 2 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 projecte
Slide 3: Overview
Overview 3 Opportunistic platform focused on upper upscale, full-service hotels Disciplined capital management Targets debt levels of 55-60% net debt/gross assets Targets cash level of 25-30% of total equity market cap Highest insider ownership Attractive dividend yield Value added asset management
Slide 4: Management Team
Management Team 4 33 years of real estate & hospitality experience 15 years with Ashford 10 years with Goldman Sachs Stanford BA, MBA DOUGLAS A. KESSLER Chief Executive Officer & President 18 years of hospitality experience 15 years with Ashford 3 years with ClubCorp CFA charterholde
Slide 5: Portfolio Overview
Marriott 31% Hilton 6% Hyatt 3% Remington 59% Interstate <1% Portfolio Overview 5 (1) As of December 31, 2017, net rooms, excludes Worldquest (2) Hotel EBITDA in thousands Note: the company recently sold SpringHill Suites Glen Allen 120 Hotels(1) 25,031 Rooms(1) $5.7B Gross Assets(1) 31 States(1) TO
Slide 6: Geographically Diverse
6 <1% Geographically Diverse Washington D.C. – 9.9% Los Angeles – 7.2% San Francisco – 7.5% New York – 6.7% Boston – 5.6% Nashville – 5.5% Atlanta – 5.5% Dallas / Ft. Worth – 5.5% Minneapolis – 3.1% Tampa – 2.6% Houston – 2.7% Miami – 2.7% Orlando – 2.2% San Diego – 1.5% Philadelphia – 1.6% Portland
Slide 7: High Quality
High Quality 7 Crowne Plaza La Concha Key West, FL W Atlanta Downtown Atlanta, GA Marriott Beverly Hills Beverly Hills, CA Le Pavillon New Orleans, LA One Ocean Jacksonville, FL Le Meridien Minneapolis Minneapolis, MN W Minneapolis Minneapolis, MN The Silversmith Chicago, IL Hyatt Coral Gables Coral
Slide 8: Full-Service Rationale
Full-Service Rationale 8 ESTIMATED CAP RATES 6.5% 8.5+% VALUE-ADD OPPORTUNITIES 39% Franchised Upper Upscale Rooms as a % of Total Upper Upscale Chain Scale Segment(1) W Atlanta Downtown Atlanta, GA Limited Service $10.5b 43% Full Service (Non-Luxury) $11.6b 47% Full Service (Luxury) $ 2.5b 10% Limi
Slide 9: Disciplined Capital Management
Disciplined Capital Management 9 Track record of increasing shareholder returns by capitalizing upon cyclical changes and advantageous pricing situations COMMON SHARE BUYBACKS Financial Crisis 73.6M 50% $3.28 Shares Of Outstanding Shares Average Buyback RECENT PREFERRED EQUITY ACTIVITY 9.0% Old Co
Slide 10: Leverage Target
Leverage Target 10 Non-recourse, property level mortgage debt Leverage policy consistent since IPO (1) (1) (1) Based on public filings; adjusted for unconsolidated Highland JV from 2011 – 2014 Note: Gross Assets and Net Debt adjusted for cash & cash equivalents and other liquid cash-like items as re
Slide 11: Cash Target
Cash Target 11 (1) Based on public filings; adjusted for unconsolidated Highland JV from 2011 - 2014 (2) Source: Bloomberg FINANCIAL CRISIS CURRENT CYCLE FINANCIAL CRISIS Positioned to buy back approximately 50% of outstanding common shares for about $240 million leading to outsized total shareholde
Slide 12: Net Working Capital
Net Working Capital 12 (1) As of December 31, 2017, except as footnoted, in millions (2) At market value as of 3/6/2018 Net Working Capital(1) 25-30% CASH TO EQUITY MKT CAP TARGET 48% CURRENT CASH TO EQUITY MKT CAP(2) Ability to execute opportunistic investments BENEFITS Hedge against economic uncer
Slide 13: Non-Recourse Debt
Non-Recourse Debt 13 (1) As of 3/6/2018 (2) As of December 31, 2017 (3) Includes Investment in Ashford Inc. at market value as of 3/6/2018 Total Enterprise Value 100% NON-RECOURSE DEBT 100% PROPERTY LEVEL, MORTGAGE DEBT 0% CORPORATE LEVEL DEBT Non-recourse debt lowers risk profile of the platform BE
Slide 14: Value Enhancement through Refinancing
Value Enhancement through Refinancing 14 INDIGO ATLANTA – MAY 2017 5.98% L+2.90% Old Interest Rate New Interest Rate ~$0.5mm in annual debt service savings BOSTON BACK BAY – OCT 2017 ~$2.8mm in annual debt service savings 17-PACK – OCT 2017 L+5.52% Old Interest Rate ~$9.8mm in annual debt servic
Slide 15: Debt Maturity
Debt Yield: 10.8% Debt Yield: 12.8% Debt Yield: 11.0% Debt Yield: 13.6% Debt Maturity(1),(2) 15 (1) As of December 31, 2017 assumes extension options are exercised (2) Pro forma for January 2018 refinance of 8-hotel portfolio Note: All debt yield statistics are based on EBITDA to principal 2018 NO D
Slide 16: Highest Insider Ownership
Highest Insider Ownership 16 REIT average includes: AHP, HT, APLE, CLDT, CHSP, RLJ, PEB, INN, HST, DRH, SHO, XHR, LHO, PK REIT Source: Latest proxy. (1) As of 3/6/2018 (2) Includes direct interests and interests of related parties Most highly aligned management team among the lodging REIT sector #1
Slide 17: Attractive Dividend Yield
Attractive Dividend Yield 17 Source: Company filings and market data (1) As of 3/6/2018 (2) Annualized based on most recent dividend announcement (3) Includes: AHP, APLE, CLDT, PK, LHO, CHSP, HT, RLJ, XHR, DRH, PEB, HST, INN, SHO Highest dividend yield in the industry(1) 7.5% 7.1% 7.1% 7.0% 6.8% 6.6
Slide 18: Value Creation Through Active Asset Management
Value Creation Through Active Asset Management 18 PORTFOLIO HOTEL EBITDA FLOW-THROUGH (1) FY2016 (2) Peers include DRH, HST, INN, LHO, CHSP, HT, SHO, RLJ, and PEB Ashford management creates value in both brand and non-brand managed assets Hotel EBITDA flow-through has outperformed the peer avera
Slide 19: Case Study – Aggressive Asset Management
Case Study – Aggressive Asset Management 19 237 keys, 9,000 sq. ft. of meeting space Close proximity to the downtown and midtown demand generators: Centennial Olympic Park, the Atlanta Aquarium, and Mercedes Benz Stadium Replaced unprofitable restaurant manager and re-positioned restaurant N
Slide 20: Case Study – Conversion to Remington Managed
Case Study – Conversion to Remington Managed 20 357 keys, 15,000 sq. ft. of meeting space Ideally located off Interstate 880 at the gateway to Silicon Valley. Announced forward cap rate and EBITDA multiple of 8.1% and 10.0x, respectively Current cap rate and EBITDA multiple of 15.7% and 5.7x
Slide 21: Asset Management Initiatives – Recently Completed
Asset Management Initiatives – Recently Completed 21 W Hotel Atlanta Downtown: Terminated existing restaurant management agreement and brought the operation in-house with a projected annual positive GOP impact of almost $300,000. Le Meridien Minneapolis: Worked with existing restaurant tenant to res
Slide 22: Asset Management Initiatives – Upcoming
Asset Management Initiatives – Upcoming 22 Renaissance Nashville: Partnered with developer on the adjacent $430 million Fifth & Broadway mixed use development. Extensive lobby, meeting space, and restaurant upgrade. Ritz-Carlton Atlanta Downtown: Extensive guestroom renovation scheduled for Q4 2018
Slide 23: Valuation Opportunity
Valuation Opportunity 23 PRICE / 2018E AFFO / SHARE MULTIPLE(1),(2) TTM CAP RATE(1) TEV / 2018E EBITDA MULTIPLE(1),(2) Discount to average peer trading cap rate (bps) VALUATION OPPORTUNITY 120 Discount to average peer trading AFFO multiple 5.3x Discount to average peer trading EBITDA multiple 1.2x O
Slide 24: Key Takeaways
Key Takeaways 24 Opportunistic platform focused on upper upscale, full-service hotels Disciplined capital management Targets debt levels of 55-60% net debt/gross assets Targets cash level of 25-30% of total equity market cap Highest insider ownership Attractive dividend yield Value added asset manag
Slide 25: March 2018
March 2018
Ashford Hospitality Trust — Investor Presentation (March 2018) on 6ix