Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (November 2019)
30 slides from Ashford Hospitality Trust's investor presentation, Nov 12, 2019
Slide 1: Ashford Hospitality Trust November 2019
JW®. ASHFORD HOSPITALITY TRUST November 2019
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 projecte
Slide 3: Ashford Hospitality Trust Advantages
Ashford Hospitality Trust Advantages INVESTMENT FOCUS Portfolio consists primarily of upper upscale full-service hotels Provide an integrated value- add approach to optimize ASSET MANAGEMENT Widespread initiatives designed operating performance and to enhance operational maximize shareholder returns
Slide 4: Management Team
Management Team Proven Experience 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 ye
Slide 5: Insider Ownership
Insider Ownership “Think and Act L ike Owners” 20% 18% 17.4% 16% 14.3% 14% 12% 10.6% 10% 8% 6.5% 6% 3.8% 3.6% 4% 2.3% 1.7% 1.6% 2% 1.3% 1.1% 1.0% 0.9% 0.5% 0% (1) (1) AHT BHR HT APLE Peer Avg. CLDT INN RLJ XHR PEB HST SHO DRH PK #1 4.6x $60M Aligned Management Team(2) More insider ownership vs. Tota
Slide 6: Portfolio High Quality
Portfolio High Quality W Atlanta Downtown Marriott Beverly Hills La Concha Le Pavillon Atlanta, GA Beverly Hills, CA Key West, FL New Orleans, LA One Ocean Le Meridien Minneapolis W Minneapolis The Silversmith Jacksonville, FL Minneapolis, MN Minneapolis, MN Chicago, IL Hyatt Coral Gables The Church
Slide 7: Portfolio Overview
Portfolio Overview Key Metrics 118 25,044 30 $128 $6.1B HOTELS (1) HOTEL ROOMS ( 1 ) STATES (1) R e v P A R ( 1 ) GROSS ASSETS ( 1 ) Portfolio by Hotel EBITDA(1) IHG INTERSTATE 2% HYATT LUXURY <1% 5% UPPER HYATT 3% MIDSCALE 4% SELECT-SERVICE 2% 28% INDEPENDENT HILTON 6% INDEPENDENT 7% 6% PROPERTY SE
Slide 8: Geographically Diverse Portfolio Location
3% Geographically Diverse SMALL METRO Portfolio Location RESORT 7% <1% (1)(2) Portfolio by Hotel EBITDA AIRPORT INTERSTATE 16% LOCATION TYPE 35% 39% URBAN SUBURBAN OTHER 10% TOP 50 Top 10 Markets 2019 Q3 TTM % of Total 17% Washington, D.C. $48,041 10.1% San Francisco/Oakland, CA $41,057 8.6% New Yor
Slide 9: Portfolio Benefits: Comparative Segments
Portfolio Benefits Comparative Segments Select-Service: Full-Service: Average Price per Room: Select-Service vs Full-Service 28% of TTM EBITDA 72% of TTM EBITDA $400,000 $350,000 • Operational efficiency • More revenue generators $300,000 • Less CapEx per key • More variable costs to control $250,00
Slide 10: Transaction Opportunity
Transaction Opportunity Strategic Rationale 16% $6.6B 51% FULL-SERVICE $21.3B Value-Add Opportunity (LUXURY) FULL-SERVICE (NON-LUXURY) ~41% Of total upper upscale rooms are franchised(2) DEAL FLOW(1) Attractive Yield ~6.5% - 8.5% Estimated upper upscale cap rates 33% $13.8B LIMITED-SERVICE (1) 2018
Slide 11: Enhanced Return Funding Program
Enhanced Return Funding Program Maximize Value Structure • $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 of ne
Slide 12: Acquisitions Using ERFP
Acquisitions Using ERFP “Making Good Deals Great”( 1 ) 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 Scotts Valley Acquisition Price $111M Acquisition Price $50M Acquisition Price $195M Acquisition Price $50M ERFP ERFP ERFP ERFP $11.1M $5.0M
Slide 13: Capital Recycling: Disciplined Asset Rotation
Capital Recycling Disciplined Asset Rotation Assets Sold Since 2016 Assets Bought Since 2016 Sales Proceeds: $438.4M Acquisitions: $406.0M Lower RevPAR: $83 TTM RevPAR(1) Higher RevPAR: $178 TTM RevPAR(3) Cap Rate: 6.6%(2) Cap Rate: 7.9%(4) 15 Select-Service 4 Full-Service 4 Full-Service • Low RevPA
Slide 14: Portfolio Performance: EBITDA Growth
Portfolio Performance EBITDA Growth Outperformed Our Peers Nearly 5 Out of the Last 6 Years Cumulative Outperformance: 350bps(1) Year Peers AHT 4.3%(1) YTD 2019(2) 1.3% 1.6% AHT CAGR 2018 1.6% -2.6% 2017 -0.4% 1.0% 3.9%(1) 2016 3.2% 4.5% Peers CAGR 2015 6.2% 9.0% 2014 11.6% 13.3% (1) Assumes 2019 YT
Slide 15: Asset Enhancements
Asset Enhancements Asset Management Initiatives Hotel CapEx Invested $250,000 $221,960 17.0% $225,000 15.4% $204,040 $207,325 15.1% 15.0% $200,000 14.5% $175,159 13.7% $175,000 13.1% 13.0% $150,000 $120,105 $121,746 $125,000 10.2% 11.0% 10.6% $96,285 Thousands $100,000 9.0% $75,000 Peer 3-Yr Average
Slide 16: Competitive Advantages: Affiliate Companies & Corporate Structure
Competitive Advantages Affiliate Companies & Corporate Structure AFFILIATE COMPANIES RESULTS To drive performance, guest satisfaction, and revenue Operational Improvements Mobile interface for guest check-in and room access Data insight & guest satisfaction Audiovisual services for banquets, meeting
Slide 17: La Posada de Santa Fe Case Study
La Posada de Santa Fe Case Study – Acquisition STRATEGY IMPLEMENTED • Eliminated unnecessary positions, saving ~$350K annually • Created a new strategy for Group pricing • Removed OTA promotions that were not producing a ROI 7.6% (1) 5.5%(1) Occupancy ADR (1) (1) 13.5% 32.9% RevPAR EBITDA Estimated
Slide 18: Renaissance Nashville Case Study
Renaissance Nashville Case Study – Long Term Growth Renovation $29 $200 EBITDA $24 $180 RevPAR RevPAR $160 $19 Acquisition Millions $140 $14 $120 $9 $100 2010 2011(1) 2012 2013 2014 2015 2016 2017 2018 TTM(2) 2019 +207.4%(3) +97.9%(3) EBITDA Growth RevPAR Growth STRATEGY IMPLEMENTED • Eliminated low
Slide 19: Ritz-Carlton Atlanta Case Study
Ritz-Carlton Atlanta Case Study – Renovation Renovation $200 $14.0 EBITDA $190 $12.0 $180 $170 $10.0 RevPAR $160 RevPAR $8.0 $150 Millions Acquisition $6.0 $140 $130 $4.0 $120 $2.0 $110 2010 2011(1) 2012 2013 2014 2015 2016 2017 2018 TTM (2) 2019 $17.0M +539.7% +75.5% Guestroom Renovation EBITDA Gro
Slide 20: La Concha Autograph Rebrand Opportunity
La Concha – Autograph Rebrand Opportunity – R e b r a n d i n g Strategic Rebrand from Crowne Plaza to Autograph MARKET Incremental CapEx: $7.8M • Marriott has interest to increase brand presence, resulting in contribution of key money • Opportunity to improve demand and RevPAR (1) • Strengthens pos
Slide 21: Disciplined Capital Management
Disciplined Capital Management Track Record COMMON SHARE BUYBACKS • Lodging cycles require capital markets expertise • Analyze correlations and research alternatives • Capitalize on advantageous pricing situations 73.6M ~50% Track record of enhancing shareholder returns(1) • SHARES SHARES OUTSTANDIN
Slide 22: Potential Capital Access
Potential Capital Access Opportunity for Growth Investor Rationale • Institutional • Private Equity • Access lower cost alternative capital • Family Office Incentive Fees • Maintain transaction pipeline 5%-20% (GP) 80%-95% (LP) Benefits • Promoted structure • Diversification Joint Venture • Accretiv
Slide 23: Leverage
Leverage Similar Leverage Since IPO • Leverage may enhance returns • Non-recourse debt limits risk(1) • Floating-rate may hedge cash flow • Refinance frequently to capitalize on pricing & proceeds Net Debt(2) to Adj. EBITDA 14.0x 12.5x 12.0x 11.2x 10.6x 10.7x 10.5x 10.0x 8.7x 9.0x 8.9x 9.1x Average
Slide 24: Recent Refinancings
Recent Refinancings Value Enhancement Strategic Rationale • Proactively taking advantage of 73% $3.4B capital markets Refinanced 86 out of our 118 Refinanced 82% of our • Refinanced assets at lower spreads hotels in the past 2 years debt in the past 2 years • Pushed out maturities • Increased flexib
Slide 25: Debt Maturity Schedule
Debt Maturity Schedule (1) Well- Laddered • Predominantly floating rate Only 14% of debt maturing • Attractive maturity schedule through 2023 • All non-recourse to the company(2) $4,000 $3,500 $3,000 $2,500 $2,000 $3,328.5 Millions $1,500 $1,000 $500 $223.0 $98.5 $219.5 $0 $92.5 $113.1 $52.3 2019 20
Slide 26: Cash Target
Cash Target S t r a t e g i c Financial Crisis Current Cycle Flexibility to execute opportunistic Bought back ~50% of outstanding common shares growth and maintain hedge against an for ~$240M economic downturn Financial Crisis Current Cycle $1,400 80% 75% 70% $1,200 60% Cap Market Equity Cash/Avg. $
Slide 27: Net Working Capital Valuation Disconnect
Net Working Capital Valuation Disconnect Net Working Capital (1)(2) Cash & Cash Equivalents $256.1 $2.79 100% Restricted Cash 148.6 Investment in Securities 14.4 NWC Per Share(1)(2)(3)(4) NWC to Market Cap(1)(3)(5) Accounts Receivable, net 53.8 Prepaid Expenses 29.8 Due from Third Party Hotel Manage
Slide 28: Ashford Hospitality Trust Reasons to Own
Ashford Hospitality Trust Reasons to Own Diversified Portfolio Offers Leveraged Returns with Value Appreciation Opportunity & Stability Downside Protection(1) • Select and Full-Service Hotels • Enhances Returns to Equity • Broad Market Exposure • Non-recourse to the company • Recent Renovations Posi
Slide 29: Appendix
JAW ASHFORD HOSPITALITY TRUST APPENDIX A
Slide 30: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA (In thousands) 2019 2019 2019 2018 September 30, 2019 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter TTM Net income (loss) $ 42,625 $ 63,002 $ 38,235 $ 10,820 $ 154,682 Non-property adjustments (2,274) 6,205 (268) 20,730 24,393 Interest
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