Ashford Hospitality Trust Inc · NYSE:AHT

Ashford Hospitality Trust — Merger or Acquisition (November 2013)

47 slides from Ashford Hospitality Trust's merger presentation, Nov 4, 2013

  1. Slide 1: Spin-Off Investor Presentation

    1 Spin-Off Investor Presentation

  2. 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

  3. Slide 3: Distribution Summary – Ashford Prime

    3 Distribution Summary – Ashford Prime Fully Diluted Shares Following Spin-Off 24,890,000 Distribution Ratio 5:1 Record Date November 8, 2013 Advisor Bank of America Merrill Lynch When-Issued Trading Period November 6-19, 2013 Distribution Date November 19, 2013 Expected Annual Dividend $0.20/share

  4. Slide 4: Strategic Opportunity

    4 Strategic Opportunity Demonstrated Industry Leading Track Record • Ashford Trust total shareholder return significantly exceeds the peer average for the past decade • High insider ownership aligns interests • Focused efforts on informational transparency •Management's extensive experience and tenu

  5. Slide 5: Strong Track Record & Performance

    Strong Track Record & Performance 5

  6. Slide 6: Demonstrated 10-Year Track Record

    6 Demonstrated 10-Year Track Record 63% 70% 52% 80% 53% 99% 33% 67% 30% 85% -26% -23% 4% 24% 69% -40% -20% 0% 20% 40% 60% 80% 100% 1-Yr 2-Yr 3-Yr 4-Yr 5-Yr 6-Yr 7-Yr 8-Yr 9-yr 10-yr Total Shareholder Return AHT Peer Avg • Disciplined growth, operational expertise, and capital allocation to maximize

  7. Slide 7: Asset Management Outperformance

    7 Asset Management Outperformance • Ashford Trust and pro forma Ashford Prime consistently outperform public peers in hotel EBITDA flow-through. Peers include: CHSP, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO. Source: Company filings. 90% 64% 56% 70% 104% 63% 65% 54% 39% 48% 53% 41% 0% 20% 40% 60% 8

  8. Slide 8: Disciplined Track Record of Growth

    • Ashford Trust has purchased 180 hotels representing over $6 billion in overall transaction value since its IPO in 2003. 8 Disciplined Track Record of Growth $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2

  9. Slide 9: Highly-Aligned Management

    19% 19% 19% 4% 4% 4% 4% 3% 3% 2% 2% 2% 2% 1% 1% 0% 5% 10% 15% 20% 25% O w n ersh ip P erce n ta g e 9 Highly-Aligned Management • With insider ownership* anticipated to be approximately 19%, management is highly-aligned with shareholder interests. Public Lodging REITs include: BEE, CHSP, CLDT, DRH,

  10. Slide 10: Experienced Management Team

    10 Experienced Management Team Demonstrated Capital Markets Expertise and Timing Proven Acquisition, Disposition and Financing Capabilities Extensive Network for Transaction Sourcing Strong Asset Management Track Record Branding Expertise and Relationships Affiliated Hotel Property Manager Adds Valu

  11. Slide 11: Compelling Opportunity

    * i is Wor Compelling Opportunity } ASHEORP © ASHEORR VY TALITY TRUST Y

  12. Slide 12: Spin-Off Strategic Rationale

    12 Spin-Off Strategic Rationale Creation of Two Focused Companies Creates Investment Strategy Clarity Potential for Higher Aggregate Market Value for Stockholders Tailored Capital Structure More Efficient

  13. Slide 13: Transaction Overview

    13 Transaction Overview 123 Hotels 25,716 Rooms TTM RevPAR: $103 TTM Hotel EBITDA: $391.8mm 8 Hotels 3,146 Rooms TTM RevPAR: $147 TTM Hotel EBITDA: $77.0mm 115 Hotels 22,569 Rooms TTM RevPAR: $97 TTM Hotel EBITDA: $314.8mm 20% Ownership of Ashford Prime Taxable Spin-Off Contributed Capital Purchase

  14. Slide 14: Differentiated Investment Strategy

    14 Differentiated Investment Strategy Ashford Prime Ashford Trust Investment Focus High-quality, high-RevPAR hotels in major markets with RevPAR of at least 2x the national average All segments of the hospitality industry excluding the high-RevPAR hotels targeted by Ashford Prime Investment Type Dir

  15. Slide 15: Ashford Snapshots

    15 Ashford Snapshots AHT Pre Spin-Off AHT Post Spin-Off Ashford Prime Number of Hotels 123 115 8 Occupancy (TTM) 73% 73% 78% Average Daily Rate (TTM) $140 $133 $187 RevPAR (TTM) $103 $97 $147 Cash (1) $335.5 million $175.5 million $160.0 million Debt $3,245.9 million $2,621.9 million $624.0 million

  16. Slide 16: Ashford Prime Overview

    16 Ashford Prime Overview High Quality Hotel Portfolio •Geographically diversified and concentrated predominantly in top 20 U.S. markets •Premium portfolio RevPAR of $147 •Strong market share as evidenced by RevPAR penetration index of 110.7; 6 of the 8 hotels rank either 1st or 2nd in their competi

  17. Slide 17: Revolutionary Advisor Model

    17 Revolutionary Advisor Model • Publicly-traded advisor is not typical of other externally advised REIT structures • Increases transparency • Significant insider ownership of both Ashford Trust and Ashford Prime creates further alignment of interests Publicly –Traded External Advisor • Board of dir

  18. Slide 18: Ashford Prime Properties

    18 Ashford Prime Properties San Francisco San Francisco Courtyard 405 Rooms Seattle Marriott Seattle Waterfront 358 Rooms Seattle Courtyard 250 Rooms Philadelphia Philadelphia Courtyard 498 Rooms Dallas Marriott Plano Legacy 404 Rooms San Diego Hilton Torrey Pines 394 Rooms Hotel Market Rooms Ritz-C

  19. Slide 19: Ashford Prime Property Descriptions

    19 Ashford Prime Property Descriptions Hilton Torrey Pines  Built in 1989  394 rooms  60,000 SF of meeting space  2 F&B outlets  RevPAR of $127  Penetration index: 100.0  EBITDA of $9mm  Located on the famous Torrey Pines Golf Course overlooking Pacific Ocean  Public spaces renovated in 201

  20. Slide 20: Ashford Prime Property Descriptions

    20 Ashford Prime Property Descriptions Philadelphia Courtyard  Built in 1999  498 rooms  11,000 SF of meeting space  2 F&B outlets  RevPAR of $128  Penetration index: 118.1  EBITDA of $11mm  Located in heart of downtown Philadelphia business district proximate to convention center  Comprehe

  21. Slide 21: Ashford Prime Property Descriptions

    21 Ashford Prime Property Descriptions Note: RevPAR, penetration and EBITDA reflect pro forma TTM 9/30/13 figures. Penetration index reflects the quotient of the subject hotel's RevPAR divided by the average RevPAR of the hotels in its competitive set. Marriott Seattle Waterfront  Built in 2003  3

  22. Slide 22: High RevPAR Focus

    22 High RevPAR Focus • Ashford Prime's RevPAR compares favorably to the public lodging REIT universe and through targeted acquisitions, Ashford Prime is expected to increase its comparative RevPAR profile over time. $140 $127 $99 $94 $65 $55 $65 $75 $85 $95 $105 $115 $125 $135 $145 Public Lodging RE

  23. Slide 23: RevPAR & EBITDA multiples

    23 RevPAR & EBITDA multiples • There is a strong correlation between RevPAR and EBITDA multiples. • We have not determined that there is any statistical evidence of the effect of external management on valuation of equity REITs. R² = 0.8672 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x $50 $70 $90

  24. Slide 24: Market Capitalization & EBITDA multiples

    24 Market Capitalization & EBITDA multiples • There is no correlation between Equity Market Capitalization and EBITDA Multiple for the Hotel REIT universe. R² = 0.0005 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 EBI T D A M u lt ip le Mark

  25. Slide 25: Well Positioned For Growth

    25 Well Positioned For Growth • Unique built in pipeline of option hotels and right of first offer hotels • Targeted acquisitions consistent with investment guidelines • Internal growth from asset performance • Opportunistic, value add transactions • Internal growth from asset performance • Excess c

  26. Slide 26: Option and Right of First Offer Properties

    26 Option and Right of First Offer Properties Note: RevPAR, penetration and EBITDA reflect pro forma TTM 9/30/13 figures. Penetration index reflects the quotient of the subject hotel's RevPAR divided by the average RevPAR of the hotels in its competitive set. *An agreement has been reached to conver

  27. Slide 27: Pier House Resort & Spa – Case Study

    27 Pier House Resort & Spa – Case Study 3 Months Prior Year(1) 3 Months Post-AHT Purchase(1) Variance $ Variance % RevPAR $232.28 $260.09 $27.80 12% Total Revenue $3,994,710 $4,374,128 $379,418 9.5% EBITDA $895,575 $1,529,955 $634,380 70.8% EBITDA Flow 167.2% (1) Post-AHT takeover is June-August 201

  28. Slide 28: Pier House - Stated Price Option

    28 Pier House - Stated Price Option • Ashford Prime's option to acquire Pier House Resort & Spa over the next 18 months is expected to be value enhancing. Purchased May 2013 Original Acquisition Price = $90 million 3-month operational improvement in EBITDA = $634,380 Transaction EBITDA multiple = 14

  29. Slide 29: Right of First Offer Properties

    29 Right of First Offer Properties (1) Denotes Highland Joint Venture Asset – AHT 71.74% ownership; exercise of ROFO subject to joint venture approval. (2) An agreement has been reached to convert the hotel to the Marriott brand in 2015. Property City State # of Rooms AHT Ownership # of Rooms Owned

  30. Slide 30: Debt Maturity Schedule

    30 Debt Maturity Schedule • Ashford Prime and Ashford Trust have limited near-term debt maturities and strong in-place yields. $0 $500 $1,000 $1,500 2013 2014 2015 2016 2017 2018+ De b t Mat u ri ti e s (m m 's ) Ashford Trust TTM EBITDA Yield: 11.8% 12.6% 12.4% 12.2% 14.0% $0 $500 $1,000 $1,500 201

  31. Slide 31: Dividends

    31 Dividends • The combined AHP and AHT shareholders will benefit from strong dividends relative to other lodging REIT's. Note: Ashford Prime yield based on expected initial pricing. Source: Company filings. 5% 5% 4% 4% 4% 4% 4% 3% 3% 3% 2% 1% 1% 0% 0% 0% 1% 2% 3% 4% 5% 6% INN AHT-P CHSP CLDT HT LHO

  32. Slide 32: Industry Overview

    Industry Overview A ASHFORD

  33. Slide 33: Historical Industry Stock Returns

    • Historically, attractive returns remain for investors from this point in the lodging cycle. 33 Historical Industry Stock Returns % 50% 100% 150% 200% 250% 300% 350% 0 12 24 36 48 60 72 84 96 108 T S R Months from Peak to Peak 1989-1997 1997-2007 2007-Current Index includes AHT, BEE, DRH, FCH, HST,

  34. Slide 34: Attractive Supply/Demand Imbalance

    • Demand expected to exceed supply through at least 2015. 34 Attractive Supply/Demand Imbalance -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 2013F 2014F 2015F Y ea r- o v e r- Y ea r % Gro w th Supply vs. Demand Supply Growth Demand Growth PKF Forecast Source: PKF

  35. Slide 35: Real RevPAR

    • Real RevPAR remains well below the previous peak and each recent new peak has exceeded prior cycles. 35 Real RevPAR Source: Smith Travel Research $54.00 $56.00 $58.00 $60.00 $62.00 $64.00 $66.00 $68.00 $70.00 $72.00 $74.00 $76.00 Seasonally-Adjusted Real RevPAR (as of August 2013) Average 3-mo Avg

  36. Slide 36: Attractive Point in Hotel Cycle

    • RevPAR growth forecasts for Ashford Prime's target chain scales are well above their long-term averages for the next three years. 36 Attractive Point in Hotel Cycle 7.4% 7.5% 7.0% 0.0% 2.0% 4.0% 6.0% 8.0% 2013F 2014F 2015F RevPA R % Luxury Source: Forecasts per PKF Hospitality Research Hotel Horiz

  37. Slide 37: Projected Hotel Room Value Growth

    37 Projected Hotel Room Value Growth Source: JLL/HVS $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 U .S . H o te l T ra n sa ct io n V o lume in $B il

  38. Slide 38: Strategic Opportunity

    38 Strategic Opportunity Demonstrated Industry Leading Track Record • Ashford Trust total shareholder return significantly exceeds the peer average for the past decade • High insider ownership aligns interests • Focused efforts on informational transparency •Management's extensive experience and ten

  39. Slide 39: Appendix

    Appendix ZS ASHFORD A ASHFORD D 48

  40. Slide 40: Mr. Kessler, President of Ashford Hospitality Trust

    Mr. Kessler is the President of Ashford Hospitality Trust and a member of the Board of Directors. He previously served as Chief Operating Officer and Head of Acquisitions for the Company. Mr. Kessler has spearheaded virtually all of Ashford's key initiatives including: IPO, investments, sales, capit

  41. Slide 41: Experienced Management

    41 Experienced Management David A. Brooks Chief Operating Officer, General Counsel & Secretary David J. Kimichik Chief Financial Officer Prior to joining Remington Hotel Corporation and Ashford Financial Corporation in January of 1992, Mr. Brooks, a former licensed CPA and attorney, practiced law wi

  42. Slide 42: Experienced Management

    42 Experienced Management Deric S. Eubanks Senior Vice President, Finance J. Robison Hays Senior Vice President, Corporate Strategy & Finance As Senior Vice President of Finance, Mr. Eubanks is responsible for assisting the CEO and CFO with all corporate finance and financial reporting initiatives a

  43. Slide 43: Experienced Management

    43 Experienced Management Jeremy J. Welter Executive Vice President of Asset Management Mark L. Nunneley Chief Accounting Officer Mr. Welter has served as the Executive Vice President of Asset Management for Ashford Hospitality Trust since January 2011. In his current role, Mr. Welter presides over

  44. Slide 44: Ashford Platforms – Chain Scale

    44 Ashford Platforms – Chain Scale *TTM 9/30/13 EBITDA 3% 57% 3% 37% Existing Ashford Trust* 37% 63% Ashford Prime* 5% 55% 3% 37% Post Spin-Off Ashford Trust* Luxury Upper Upscale Upscale Upper Midscale

  45. Slide 45: Ashford Platforms – Markets

    45 Ashford Platforms – Markets *TTM 9/30/13 EBITDA 67% 18% 15% Post Spin-Off Ashford Trust* Top 25 Top 50 Other

  46. Slide 46: Ashford Platforms – Brand Family

    46 Ashford Platforms – Brand Family *TTM 9/30/13 EBITDA 29% 71% Ashford Prime* 29% 3% 5% 54% 4% 5% Existing Ashford Trust* 29% 4% 6% 50% 5% 6% Post Spin-Off Ashford Trust* Hyatt Hilton Other IHG Marriott Starwood

  47. Slide 47: Spin-Off

    47 Spin-Off Investor Presentation

Ashford Hospitality Trust — Merger or Acquisition (November 2013) on 6ix