Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (May 2006)
28 slides from Ashford Hospitality Trust's investor presentation, May 23, 2006
Slide 1: Ashford Hospitality Trust May 2006
Z& ASHFORD W HOSPITALITY TRUST May 2006
Slide 2: Safe Harbor / 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. When we use the words "will likely result," "may
Slide 3: Overview
Overview Sea Turtle Inn - Jacksonville, FL Hilton - Forth Worth, TX Marriott - Research Triangle Park, NC JW Marriott - San Francisco
Slide 4: Overview: At IPO vs Today
At IPO Today Note: "At IPO" represents completion of IPO in August 2003 and "Today" represents the quarter ending March 31, 2006 pro forma for recent acquisitions (1) Enterprise Value, Net Debt/TEV and Dividend Yield as of the May 19, 2006 closing price (2) Source: Capital IQ (3) Includes announced
Slide 5: Portfolio
Upper Upscale 46.1 Upscale 40.3 Midscale w/o F&B 8.8 Luxury 4.8 Hilton 27 Marriott 36.3 Hyatt 7.8 Radisson 8 Starwood 6.5 Other 14.4 Primary Markets 85.6 Other 14.4 Chain Scale Brand Portfolio EBITDA Property Management Note: Represents breakdown by rooms for total portfolio as of May 19, 2006. EBIT
Slide 6: Sustainable Multi-Cycle Strategy
HOTEL OWNERSHIP Current yield Capital appreciation Undervalued assets Reposition Timing: Trough/Mid- Stage Recovery FIRST MORTGAGE Stable returns High volume Counter cyclical Timing: Peak/Early Decline MEZZANINE Wide index spreads Inefficient market Foreclosure options Timing: Late Decline/Early Rec
Slide 7: Management Discipline and Judgment
Source: Smith Travel Research & Ashford Hospitality Trust as of May 19, 2006. * Includes predecessor companies Mgmt's Acquisitions / Debt Investments (1) Mgmt's Sales/Loan Payoffs % U.S. Supply Change '90 0.034 '91 0.017 '92 6700 0.009 '93 12174 311 0.006 '94 3876 821 0.013 '95 360 2589 0.016 '96 12
Slide 8: Strategy Implementation
Strategy Implementation Embassy Suites - Phoenix, AZ Hilton Nassau Bay - Houston, TX Hyatt Dulles Airport- Herndon, VA Doubletree Suites - Columbus, OH
Slide 9: Accomplishments
(1) Current annual dividend yield based on closing stock price as of May 19, 2006. Accomplishments
Slide 10: Numerous Growth Strategies
Numerous Growth Strategies Brand/Reposition Pan Pacific/JW Marriott Ft. Worth Radisson/Hilton Capex Upgrade Sheraton Bucks County Hyatt Anaheim Immediate Margin Improvement Hilton Santa Fe Sea Turtle Inn Outsize Market Recovery Hyatt Dulles JW Marriott San Francisco High Initial Yield Hilton/Marriot
Slide 11: RevPAR Growth
Pro forma statistics include only the 64 hotel properties included in income from continuing operations. Source: Smith Travel Research year to date March 2006 RevPAR Growth
Slide 12: Operational Growth
1Q 2005 1Q 2006 Hotel Revenue 96.54 105.735 1Q 2005 1Q 2006 Office Retail Lodging Operating Profit 28.835 29.593 15.2 15 10.9 $ in millions Hotel Revenue 1Q 2005 1Q 2006 Office Retail Lodging Hotel Revenue 74.418 82.398 15.2 15 10.9 $ in millions Hotel Revenue Hotel Operating Profit 1Q 2005 1Q 2006
Slide 13: Capex Growth
Capex Growth 2004 Capex - $14.2 million 2005 Capex - $38.3 million 2006 - 2007 Planned Capex - $88 million Budgeted Doubletree Suites Columbus Embassy Suites East Syracuse Hyatt Regency Orange County Doubletree Suites Dayton Embassy Suites Phoenix Airport Sheraton Bucks County Courtyard Bloomington
Slide 14: External Growth - Direct Hotel Investment
Direct Hotel Investments Yields (TTM EBITDA at Acquisition) (1) Based on cost of debt of 5.6% and 60% leverage to cost. (Average Yield - Cost of Debt * % Debt) / % Equity. External Growth - Direct Hotel Investment
Slide 15: External Growth - Debt Investment
(1) Based on cost of debt of 3-month LIBOR (5.13%) + 225bps and 60% leverage to cost. (Average Yield - Cost of Debt * % Debt) / % Equity. Mezzanine Loan Yields at Origination External Growth - Debt Investment
Slide 16: External Growth - Primary Markets
External Growth - Primary Markets (1) Includes 64 hotels from continuing operations as of March 31, 2006 plus pro forma for the JW Marriott and Marriott Crystal Gateway acquisitions. (2) Source: Torto Wheaton Research and Wachovia Securities analyst report dated February 24, 2006 Majority of Ashford
Slide 17: Recent Investment Case Study
Recent Investment Case Study 338 room luxury Pan Pacific Hotel located near Union Square in San Francisco Mobil 4-Star, AAA 4-Diamond rated hotel The hotel has been up-branded to a JW Marriott Converting to a JW Marriott will significantly improve operating statistics by utilizing Marriott's reserva
Slide 18: Next Steps
Next Steps Selectively pursue accretive investments Continue internal growth strategies Complete 2006 capital expenditures Increase operating margins Exceed national RevPAR growth performance and gain market share Evaluate selective hotel rebranding opportunities Expand research coverage and meet mo
Slide 19: Lodging Overview
Lodging Overview Four Seasons - Nevis Residence Inn Sea World - Orlando, FL Hyatt - Anaheim, CA Marriott - Cool Springs, TN
Slide 20: Favorable Lodging Fundamentals
Room Supply/Demand % Change RevPAR % Change % Change in RevPAR % Change in Room Supply % Change in Room Demand 1995 0.052 0.016 0.021 1996 0.062 0.024 0.021 1997 0.048 0.035 0.025 1998 0.034 0.039 0.027 1999 0.03 0.038 0.03 2000 0.063 0.028 0.035 2001 -0.069 0.023 -0.035 2002 -0.027 0.016 0.005 2003
Slide 21: Lodging Sector is Attractively Priced
Source: 2006 First Call Consensus as of May 19, 2006. Apartment Office Retail Industrial Lodging AHT 2006 Consensus FFO 19.4 15.8 14.7 14.4 12.1 9.6 2006E FFO Multiple Despite strong fundamentals lodging trades at a discount Lodging Sector is Attractively Priced
Slide 22: AHT Position vs. 14 Peers
Note: As of quarter ended March 31, 2006. Peer composite represents average of BOY, DRH, EHP, ENN, FCH, HIH, HMT, HPT, HT, KPA, LHO, SHO, BEE and WXH except HT for average debt interest rate and WXH for all debt stats (1) Based on AHT Total Enterprise Value as of the May 19, 2006 closing price less
Slide 23: Conclusion
Conclusion Ashford Overview Unique multidimensional approach Strategy Implementation Achieving internal and external growth Lodging Overview Sector is attractively priced Peer Analysis Statistics highlight favorable comparisons
Slide 24: Addendum
Addendum Courtyard - Weston, FL Sheraton Gunter - San Antonio, TX Crowne Plaza - Beverly Hills, CA Embassy Suites - Dallas, TX
Slide 25: Summary Selected Financial Information
(1) Stock price as of the May 19, 2006 closing price. (2) Based on actual TTM results as of March 31, 2006. Net Debt 0.424 Perpetual Preferred 0.039 Convertible Preferred 0.05 Market Value of Equity 0.487 Capital Structure Debt Summary ($ in millions) 1Q 2006 Long Term Debt $719.8 Cash Balance (88.3
Slide 26: Summary Selected Financial Information (cont'd)
($ in millions, except per share data) 2005 1Q 2006 1Q 2005 EBITDA $79.3 $31.6 $10.5 FFO $32.7 $17.1 $4.6 Adjusted FFO $52.9 $19.2 $7.2 CAD $48.4 $17.3 $6.9 Weighted Average Shares (mm) 55.1 70.9 41.9 Dividends / Share $0.71 $0.20 $.16 Adjusted FFO Payout Ratio 74.0% 74.1% 94.1% CAD Payout Ratio 80.
Slide 27: Portfolio Diversity
Portfolio Diversity Luxury Upper Upscale Upscale Upscale cont. Midscale w/o F&B Hotel Market Rooms Hotel Market Rooms
Slide 28: Ashford Hospitality Trust May 2006
Z& ASHFORD W HOSPITALITY TRUST May 2006
Ashford Hospitality Trust — Investor Presentation (May 2006) on 6ix