Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — NAREIT June 2015
30 slides from Ashford Hospitality Trust's conference presentation, Jun 9, 2015
Slide 1: Ashford Hospitality Trust - NAREIT June 2015
ZX. ASHFORD HOSPITALITY TRUST NAREIT - June 2015
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
Slide 3: Compelling Opportunity
Compelling Opportunity 3
Slide 4: Opportunistic Strategy
4 Opportunistic Strategy Predominantly focused on opportunities to invest in upper-upscale, full- service hotels in all market locations with the following characteristics: Value-add opportunities Strong yields and outsized growth prospects Markets with favorable supply/demand dynamics Abi
Slide 5: Compelling Opportunity
5 Compelling Opportunity Attractive industry fundamentals with demand growth exceeding supply growth Currently seeking accretive hotel acquisition opportunities Affiliated property manager results in strong operating results and flow- throughs Upcoming refinancings with potential for signifi
Slide 6: Strong Track Record & Performance
6 Strong Track Record & Performance
Slide 7: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 7 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Trailing Total Shareholder Returns as of 6/5/15 Source: Bloomberg Total Shareho
Slide 8: Highly-Aligned Management
Highly-Aligned Management 8 • With insider ownership* of approximately 15% for AHT, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 9: Strong RevPAR Growth
9 Strong RevPAR Growth FY 2014 RevPAR Growth Source: Company filings. • Ashford Trust has delivered strong RevPAR growth versus its peers 11.6% 10.9% 10.5% 9.9% 8.8% 8.0% 7.2% 6.8% 6.1% 5.9% 5.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Q1 2015 RevPAR Growth 13.1% 11.9% 8.5% 7.9% 7.0% 6.9% 6.9% 5.
Slide 10: Strong EBITDA Margin Growth
10 Strong EBITDA Margin Growth FY 2014 EBITDA Margin Growth (bps) Source: Company filings. • Ashford Trust has delivered strong EBITDA margin growth versus its peers 274 204 184 160 141 125 119 114 101 94 71 0 50 100 150 200 250 300 Q1 2015 EBITDA Margin Growth (bps) 500 361 245 216 162 140 118 47 3
Slide 11: Attractive Relative Valuation vs. Peers
11 Attractive Relative Valuation vs. Peers Source: Citibank research. • Ashford Trust is trading at an attractive valuation relative to its peers TEV/2016 EBITDA 12.9x 12.2x 12.1x 12.1x 11.8x 11.8x 11.5x 11.1x 10.0x 9.0x 8.9x 6.0 8.0 10.0 12.0 14.0 HT LHO RLJ HST INN SHO DRH FCH CHSP CLDT AHT
Slide 12: Strong Asset Performance
12 2013 2014 Var Q1 2014 Q1 2015 Var RevPAR $95.94 $105.39 9.8% $102.04 $110.69 8.5% Hotel Revenue $1,031,840 $1,117,739 8.3% $305,113 $326,443 7.0% Hotel EBITDA $312,766 $354,513 13.3% $92,757 $104,545 12.7% EBITDA Flow 48.6% 55.3% The above table assumes the properties owned and included in contin
Slide 13: Portfolio Ashford Trust Markets
13 Portfolio Ashford Trust Markets
Slide 14: Portfolio Overview
Portfolio Overview 14 *FY 2014 Hotel EBITDA 50% 30% 4% 5% 5% 5% Ashford Trust Brands by EBITDA Marriott Hilton Hyatt IHG Starwood Independent 33% 57% 6% 3% 1% Ashford Trust Managers by EBITDA Marriott Remington Hilton Hyatt Interstate 73% 17% 10% Ashford Trust MSA by EBITDA Top 25 Top 26-50 Other 35
Slide 15: Ashford Trust – Capital Structure
Ashford Trust – Capital Structure 15 • Target Net Debt/Gross Assets of 50-60% • Maintain mix of fixed and floating rate debt – currently 38.3% fixed/61.7% floating* • Ladder maturities • Proactively refinance upcoming maturities • All debt is property-level and non-recourse Balance Sheet Initiatives
Slide 16: Significant Liquidity
Significant Liquidity 16 • Maintain excess cash balance to capitalize on opportunities – in Q1 2015 raised over $300 million in excess proceeds from refinancings • Significant additional value through net working capital balance Net Working Capital (1) (2) Enterprise Value (1) Ashford Trust's pro ra
Slide 17: Attractive Industry Fundamentals
Attractive Industry Fundamentals 17
Slide 18: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 18 Attractive Supply/Demand Imbalance Source: PKF -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 2013 2014 2015F Supply Growth Demand Growth Yea r- o v e r- Year % Gro w th PKF Forecast
Slide 19: PKF RevPAR Growth Forecasts
19 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.3% 7.2% 6.8% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth PKF RevPAR Growth Forecasts
Slide 20: Potential Industry EBITDA Growth Rates
20 Potential Industry EBITDA Growth Rates *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resulting from PKF EBITDA change regression equation. • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estima
Slide 21: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 21 Historical Industry Stock Returns Index includes AHT, BEE, DRH, FCH, HST, HT, LHO, and SHO. Companies are included in the data from the time of their IPO Current data as of May 31, 2015 % 50% 100% 150% 20
Slide 22: Growth & Acquisition Strategy
Growth & Acquisition Strategy 22
Slide 23: Growth & Acquisition Strategy
23 Highly quantitative approach focused on long-term accretion Proven track record of value-creating opportunistic acquisitions Disciplined capital allocation Multiple ways to grow platform: Internal growth from asset performance Portfolio/single asset acquisitions Excess cash from pot
Slide 24: Competitive Strengths
24 Competitive Strengths Broad and multi-faceted relationships with both owners and brokers Deep market knowledge across U.S. markets given existing geographic footprint Remington relationship provides ability to underwrite both more thoroughly and more quickly Ability to commit to and perfo
Slide 25: Ashford Trust Recent Developments
25 Ashford Trust Recent Developments Q1 2015 RevPAR up 8.5%, Hotel EBITDA up 12.7% and EBITDA flow-through was 55% In January 2015, the Company refinanced two mortgage loans resulting in excess proceeds of over $100 million after closing costs and reserves Also in February 2015, the Company cl
Slide 26: Marriott Fremont Transaction
26 Marriott Fremont Transaction *TTM through 4/30/15 Strengths/Performance: • Closed on acquisition in August 2014 • Excellent location in strong Silicon Valley hotel market with a diversified customer base • High quality asset with minimal capex needs – recently renovated guestrooms, meeting space
Slide 27: Marriott Memphis Transaction
27 Marriott Memphis Transaction *TTM through 4/30/15 Strengths/Opportunities: • Excellent physical condition with minimal capex needs –recent renovation prior to conversion to Marriott • No new material competitive supply projected for the submarket and stable corporate demand generators • Opportuni
Slide 28: Accretive Growth
Accretive Growth 28 - Ashford Trust management is focused on accretive growth - Our definition of accretion: the 5-year Total Return (TR) post-transaction must be greater than the 5-year Total Return pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (Lever
Slide 29: Corporate Governance Enhancements
29 Corporate Governance Enhancements Recently, Ashford Trust has made a number of positive corporate governance enhancements: Amendment to bylaws providing for a majority voting standard in the election of directors in uncontested elections Amendment to bylaws to permit shareholders to amend t
Slide 30: Ashford Hospitality Trust - NAREIT June 2015
ZX. ASHFORD HOSPITALITY TRUST NAREIT - June 2015