Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (June 2006)
34 slides from Ashford Hospitality Trust's investor presentation, Jun 5, 2006
Slide 1: Ashford Hospitality Trust, June 2006
Z& ASHFORD W HOSPITALITY TRUST June 2006
Slide 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 result," "may
Slide 3: Agenda
Agenda Ashford Overview Portfolio Management and Internal Growth Strategies Lodging Overview and Peer Analysis
Slide 4: Ashford Overview
Ashford Overview
Slide 5: Sample of Ashford Hospitality Trust Properties
Sample of Ashford Hospitality Trust Properties Hilton - Ft. Worth, TX Marriott RTP - Durham, NC JW Marriott - San Francisco, CA Embassy Suites - Phoenix, AZ Marriott - Arlington, VA Hyatt Dulles - Herndon, VA Hilton Nassau Bay - Houston, TX Hilton - Santa Fe, NM Hyatt - Anaheim, CA Residence Inn - O
Slide 6: Overview: At IPO and Today
At IPO Today Note: "At IPO" represents completion of IPO in August 2003 and "Today" represents the quarter ending June 1, 2006 pro forma for recent acquisitions (1) Enterprise Value, Net Debt/TEV and Dividend Yield as of the June 1, 2006 closing price, Net Debt as reported quarter ending March 31, 2
Slide 7: Ashford's Strategies
RevPAR Growth Market Penetration Margin Improvement Higher Quality Assets Guest Satisfaction/Loyalty Value Creation Capital Appreciation Dividend Growth Investment Allocation Efficient Capital Structure Risk/Reward Balance Internal Growth Strategy Portfolio Management Strategy Ashford's Strategies
Slide 8: Portfolio Management Strategy
Portfolio Management Strategy
Slide 9: Portfolio Management Strategy
Investment Strategy Primary: Direct Hotel Ownership Secondary: Mezzanine Loans, 1st Mortgages, Sale Leasebacks Asset Mix Strategy Geography Segment Brand Manager Capital Strategy Minimize Cost of Capital Portfolio Management Strategy Ashford uses a portfolio management approach to maximize returns a
Slide 10: Investment Strategy
Investment Strategy PRIMARY STRATEGY: Direct Hotel Ownership (currently 94% of portfolio) Expansion Early Decline Late Decline Recovery SECONDARY STRATEGIES: Mezzanine Lending 1st Mortgages Sale Leasebacks (currently 6% of portfolio) Ashford's primary strategy is direct hotel investments, supplement
Slide 11: Investment Strategy - Primary
Investment Strategy - Primary Note: Trailing twelve month EBITDA yield at acquisition (1) Based on cost of debt of 5.6% and 60% leverage to cost. (Average Yield - Cost of Debt * % Debt) / % Equity.
Slide 12: Investment Strategy - Secondary
Note: Yield is at loan origination (1) Based on cost of debt of 1-month LIBOR (5.11%) + 200bps and 60% leverage to cost. (Average Yield - Cost of Debt * % Debt) / % Equity. Investment Strategy - Secondary
Slide 13: Asset Mix Strategy
Upper Upscale 42 Upscale 43.25 Midscale w/o F&B 11.56 Luxury 2.61 Hilton 28.06 Marriott 45.17 Hyatt 7.48 Radisson 10.45 Starwood 3.16 Other 5.69 Top 25 Markets 55.7 Top 50 Markets 21.6 Other 15.5 Secondary Investment Strategies 5.5 Segment Brand Portfolio EBITDA Property Management Note: Segment, Br
Slide 14: Asset Mix Strategy: Hotels in top markets
Asset Mix Strategy Hotels in top 25 markets Hotels in top 50 markets Source: U.S. Census Bureau. Grouped by Metropolitan Statistical Areas and sorted by population size excluding mezzanine investments (1) Source: Torto Wheaton Research and Wachovia Securities report dated February 24, 2006 except Lo
Slide 15: Capital Strategy
Source: SEC Filings, Ashford Hospitality Trust. Total Debt Fixed Debt Net Debt/TEV 4Q 03 50.2 6.4 -0.099 1Q 04 100 6.4 0.165 2Q 04 133.2 22 0.288 3Q 04 286.4 126.9 0.357 4Q 04 300.8 126.8 0.388 1Q 05 427.4 246.8 0.443 2Q 05 801.5 615 0.541 3Q 05 800.5 614.3 0.509 4Q 05 908.6 790.5 0.546 1Q 06 719.8
Slide 16: Capital Strategy
Capital Strategy # of Public Secondary Raises 3 3 4 6 3 2 1 3 1 2 1 0 0 # of Public Preferred Raises 3 1 2 3 1 1 0 1 1 2 1 1 0 Six hotel REITs (half of AHT's peers) have either raised more money or have come to market as often as AHT since August 2003 (IPO) $282 $973 $239 $190 $640 $128 $866 $224 $1
Slide 17: Internal Growth Strategy
Internal Growth Strategy
Slide 18: Internal Growth Strategy
Internal Growth Strategy 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/Marriott
Slide 19: Internal Growth Strategy: RevPAR Growth
Source: Smith Travel Research. Note: AHT RevPAR Growth only includes hotels not under renovation. AHT RevPAR Growth Industry RevPAR Growth 4Q 03 0.013 0.036 1Q 04 0.022 0.077 2Q 04 0.06 0.086 3Q 04 0.067 0.064 4Q 04 0.089 0.084 1Q 05 0.125 0.072 2Q 05 0.126 0.083 3Q 05 0.123 0.083 4Q 05 0.127 0.099
Slide 20: Value Added Capital Expenditures
Source: Internal Estimates Note: 2006-2007 capex included JW Marriott and Marriott Crystal Gateway (1) Pro forma for hotels not under renovation as of the quarter ended March 31, 2006 Total Capex Value Added Capex 2004 14.2 11.4 2005 38.3 30.6 2006-2007 88 70.4 $ Capex Maintenance Capital Expenditur
Slide 21: Non-Core Properties Sold Since IPO
Internal Growth Strategy 18 Non-Core Properties Sold Since IPO Reasons we sell: Original investment strategy (portfolio acquisition) Property needs non-value add capex Shift in capital or hotel markets Supply/demand concerns Higher yielding alternatives FGS Portfolio Best Western - Dallas, TX Gull W
Slide 22: Recent Investment Case Study: Pan Pacific Hotel
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 23: Recent Investment Case Study: Marriott Crystal Gateway
Recent Investment Case Study 697 room hotel with 33,000 square feet of meeting space located in Crystal City, VA Acquired at attractive yield of 9.0% on a trailing cap rate Seller is taking operating partnership units as payment Sourced through off market transaction The hotel completed a $9.5 milli
Slide 24: Lodging Overview and Peer Analysis
Lodging Overview and Peer Analysis
Slide 25: Lodging Overview: Supply/Demand and RevPAR
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 26: Lodging Trades at a Discount
Source: Freidman Billings Ramsey "Property Week" as of 5/30/06 except for Lodging and AHT. First Call Estimates used for Lodging and AHT - stock price as of 6/01/06; Lodging composite represents median of DRH, EHP, ENN, FCH, HIH, HMT, HPT, HT, KPA, LHO, SHO, BEE and WXH Note: Lodging FFO multiple an
Slide 27: Peer Analysis: FFO Multiples
Peer Analysis Ashford is currently trading below peer average multiples 2006E FFO Multiples 2007E FFO Multiples Average: 11.7x Average: 10.0x Note: First Call estimates used - Stock price as of close 5/30/06.
Slide 28: Peer Analysis: Yield and Payout Coverage
Source: Company and SEC Filings. CAD for peer group is calculated by subtracting 4% of revenue from Adjusted Funds From Operations Peer composite represents DRH, EHP, ENN, FCH, HIH, HMT, HPT, HT, KPA, LHO, SHO, BEE and WXH Based upon the closing price as of June 1, 2006 $ Dividend Yield AHT Dividend
Slide 29: AHT Position vs. 13 Peers
Note: As of quarter ended March 31, 2006. Peer composite represents 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) FFO Multiple per First Call Consensus as of June 1, 2006 (2) Based on AHT Total Enterprise Val
Slide 30: Conclusion
Conclusion Ashford Overview Unique among its peers Portfolio Management and Internal Growth Strategies Drive performance Lodging Overview and Peer Analysis Sector is attractively priced Statistics highlight favorable comparisons
Slide 31: Capital Structure and Debt Summary
(1) Stock price as of the June 1, 2006 closing price. Net Debt as of the quarter ended March 31, 2006 (2) Based on actual TTM results as of March 31, 2006. Net Debt 0.402 Perpetual Preferred 0.037 Convertible Preferred 0.048 Market Value of Equity 0.513 Capital Structure Debt Summary ($ in millions)
Slide 32: Summary Selected Financial Information
($ 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 Diluted 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 R
Slide 33: Portfolio Diversity
Portfolio Diversity Luxury Upper Upscale Upscale Upscale cont. Midscale w/o F&B Hotel Market Rooms Hotel Market Rooms
Slide 34: Ashford Hospitality Trust, June 2006
Z& ASHFORD W HOSPITALITY TRUST June 2006
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