Attached files
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| 8-K - FORM 8-K - ASHFORD HOSPITALITY TRUST INC | d321437d8k.htm |
 Company Presentation
March 2012
Exhibit 99.1 |
 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,”
“anticipate,”
“estimate,”
“should,”
“expect,”
“believe,”
“intend,”
or similar expressions, we intend to
identify forward-looking statements. Such forward-looking
statements include, but are not limited to, our business and
investment strategy, our understanding of our competition, current market trends and
opportunities, projected operating results, and projected capital
expenditures. These forward-looking statements are subject to
known and unknown risks and uncertainties, which could cause actual
results to differ materially from those anticipated including, without limitation:
general volatility of the capital markets and the market price of our common
stock; changes in our business or investment strategy; availability,
terms and deployment of capital; availability of qualified personnel;
changes in our industry and the market in which we operate, interest rates or the general
economy, and the degree and nature of our competition. These and other
risk factors are more fully discussed in the Company’s filings
with the Securities and Exchange Commission. EBITDA is defined as net
income before interest, taxes, depreciation and amortization. EBITDA yield is
defined as trailing twelve month EBITDA divided by the purchase price.
EBITDA, FFO, AFFO, CAD and other terms are non-GAAP measures,
reconciliations of which have been provided in prior earnings
releases and filings with the SEC.
This overview is for informational purposes only and is not an offer to
sell, or a solicitation of an offer to buy or sell, any securities of
Ashford Hospitality Trust, Inc. and may not be relied upon in connection
with the purchase or sale of any such security.
2
Safe Harbor
Safe Harbor |
 Agenda
Agenda
•
Hotel Industry Overview
•
Ashford Overview
•
Remington Advantage
•
Asset Management Expertise
•
Most Highly-Aligned Management Team
•
Ashford Outperformance
•
Attractive Dividend
3 |
 Hotel Industry Overview
Hotel Industry Overview
4
•
Hotel demand is generally driven by the overall economy
Source: Smith Travel Research, U.S. Dept. of
Commerce BEA
Hotel
Demand
Growth
vs.
Real
GDP
Growth
Real GDP Growth
Hotel Demand Growth |
 Hotel Industry Overview
Hotel Industry Overview
5
•
Supply growth occurs in cycles and growth above the long-term average
is a significant drag on industry fundamentals
•
We are currently experiencing minimal supply growth, and based on
historical cyclical trends and the lack of development financing, very
low supply growth is expected for the next several years
Source: Smith Travel Research & PWC
Supply Growth
Long-term avg
supply growth = 2.1 |
 Hotel Industry Overview
Hotel Industry Overview
6
Source: Smith Travel Research (non-seasonally
adjusted nominal monthly figures)
•
Real RevPAR is cyclical/mean-reverting, and it appears that it
is still relatively early in the current up-cycle, as Real RevPAR
is still below the long-term average
Long-term avg real
RevPAR = $65
$54.00
$56.00
$58.00
$60.00
$62.00
$64.00
$66.00
$68.00
$70.00
$72.00
$74.00
$52.00
T-3 Mo Avg Seasonally Adjusted Real RevPAR
|
 Hotel Industry Overview
Hotel Industry Overview
7
Source: Smith Travel Research
•
Despite some of the volatility in the economy here in the U.S. and
abroad, RevPAR growth has remained consistently strong
Trailing 28-Day U.S. RevPAR % Change
Week Ended
0.0%
2.0%
4.0%
6.0%
10.0%
12.0%
8.0% |
 •
Hotels have historically been a good inflation hedge during periods
of high inflation
Hotel Industry Overview
Hotel Industry Overview
8
Source: Smith Travel Research, PKF & U.S. Dept. of Labor
BLS During periods of high inflation,
ADR growth has met or exceeded
inflation
ADR vs. CPI Growth
ADR Growth
CPI Growth |
 Ashford Highlights
Ashford Highlights
9
Portfolio Statistics*
Total Enterprise Value
$4.1 B
Total Gross Assets
$5.2 B
Peer Comparison
2
nd
Largest (out of 15)
# of Hotels
124
# of Owned Rooms
26,195
# of Property Managers
6
$ ADR
$130.12
$ RevPAR
$93.76
RevPAR Growth %
6.0%
Financial Statistics*
Recent Share Price
$9.29 (3/22/12)
# Fully Diluted Shares
84.3 M
Leverage Ratio
58.8%
Debt Wtd. Avg. Maturity
4.1 Years
Debt Wtd. Avg. Cost
3.38%
Quarterly Dividend
$0.11
Dividend Yield
4.7%
2011 AFFO per Share
$1.86
Cash on Hand
$167.6 M
* As of December 31, 2011 |
 Highland Transaction Summary
10
Transformational 28-hotel, $1.3 billion acquisition with 8,084 rooms
($158k per room), completed 3/10/11
Primarily upper-upscale and luxury full-service assets
Expands Ashford’s presence in key markets (Washington D.C and
NY/NJ) and into new markets (Boston and Nashville)
Significant growth potential with affiliate manager Remington taking
over management of 19 hotels
2010 EBITDA flows of 18% vs. AHT’s of 104% and NOI 36% below
peak |
 11
High-Quality Portfolio
High-Quality Portfolio
Capital Hilton
Renaissance Palm Springs
Hyatt Regency Coral Gables
Marriott DFW Airport
Renaissance Tampa
Marriott Plaza San Antonio
Embassy Suites Las Vegas
Hilton Tampa Westshore
Embassy Suites Portland
Marriott Bridgewater
Courtyard Seattle Downtown
Ritz-Carlton Atlanta
Marriott Seattle Waterfront
Renaissance Portsmouth
Embassy Suites Silicon Valley |
 Hilton Parsippany
Hilton La Jolla Torrey Pines
The Melrose –
D.C.
Courtyard SF Downtown
Hyatt Regency Wind Watch
Marriott Suites Market Center
Boston Back Bay Hilton
Marriott Legacy Center
Renaissance Nashville
Marriott Sugar Land
Hyatt Regency Savannah
Hilton Costa Mesa
Westin Princeton
Courtyard Philadelphia
The Silversmith -
Chicago
12
High-Quality Portfolio |
 73%
16%
11%
MSA*
Top 25
Top 50
Other
58%
38%
3%
Chain Scale*
Luxury
Upper Upscale
Upscale
Upper Midscale
53%
Marriott
Hilton
Hyatt
Starwood
Intercontinental
Independent
32%
3%
5%
4%
3%
Brand Family*
49%
23%
24%
4%
Demand Mix
Transient -
Corporate
Transient -
Leisure
Group
Contract
Focused Portfolio
13
1%
* %’s based on 2011 EBITDA |
 Advantages of Remington
Less
disruption
during
renovations
Aligned with
ownership
Immediate
attention
Company
“drivers”
are
operationally
focused
Check against
other
managers
More owner-
friendly cost
structure
Additional
brand
advocate
Constant
accessibility
Reacts rapidly
to real-time
changes
Operate the
hotels as if
they owned
them
Share best
practices
across brands
Keeps project
management
in-house
14 |
 Asset Management Expertise
15
53%
%
HOTEL EBITDA FLOWS
(Peers include: BEE, CHSP, DRH, FCH, HST, HT, LHO, PEB & SHO)
39%
8%
49%
41%
50%
51%
37%
104
63%
0%
20%
40%
60%
80%
100%
120%
2007
2008
2009
2010
2011
Peer Avg
AHT |
 Asset
Management
Expertise
–
Highland
Portfolio
16
GOP
Margin
Change
BPS
GOP Flow
8.8%
Pre-Ashford
<95>
Pre-Ashford
94.9%
Post-Ashford
231
Post-Ashford
78.6%
Post-Ashford
288
Post-Ashford
149.6%
Post-Ashford
186
Post-Ashford |
 17
Source: 2011 Proxy Filings
Most Highly-Aligned Management Team
19%
16%
6%
4%
3%
3%
2%
2%
1%
1%
1%
1%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
AHT
HT
CLDT
INN
FCH
HST
PEB
CHSP
DRH
SHO
BEE
LHO
Insider Ownership % |
 •
Management’s large ownership stake in the company drives
decisions that maximize shareholder return
•
Just prior to the downturn, management proactively managed
interest expense through a hedging strategy, which will have
provided about $240m in cash flow at expiration in 2013
•
Because of this significant cash flow cushion, Ashford was able to
buy back about half of the company during the financial crisis
through common share repurchases
•
Common shares were repurchased at an average of $3.26 vs. today’s
price of about $9
Unique Owner’s Mentality
Unique Owner’s Mentality
18 |
 Consistent Earnings Growth
Consistent Earnings Growth
19
•
Ashford strives to achieve consistently growing, stable earnings
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1
80
$2.00
2003
2004
2005
2006
2007
2008
2009
2010
2011
$-
$0.41
$0.
96
$1.13
$1.28
$1.
31
$1.12
$1.
50
$1
.86
Ashford's Historical AFFO per Share |
 Earnings Outperformance
Earnings Outperformance
20
•
Ashford has significantly outperformed REIT peers on an AFFO per
share basis since the previous peak of mid-2007
0%
20%
40%
60%
80%
100%
120%
140%
160%
+48
%
65%
Trailing Twelve Months AFFO Per Share (2007Q
2 =
100%)
Peers Include: BEE, DRH, FCH, HST, HT, LHO, SHO
-
Ashford
Peer Average
Source: SNL & Company Filings |
 Shareholder Return Outperformance
Shareholder Return Outperformance
21
•
Ashford has also significantly outperformed REIT peers and c-corp
peers on a total shareholder return basis since the previous peak of
mid-2007
Source: Bloomberg
Total Shareholder Return Since
2007
Q2
(as of 3/
22/
12) |
 Attractive Dividend Yield & Coverage
Attractive Dividend Yield & Coverage
22
•
Ashford’s dividend yield AND dividend coverage exceed the
peer average
5.3%
4.7%
4.5%
4.7%
3.3%
2.5%
2.1% 2.1x
1.5%
1.5%
1.3x
4.7x
1.4x
1.7x
1.9x
2.9x
3.6x
6.6x
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
CLDT
AHT
CHSP
HT
DRH
Peer Avg
PEB
LHO
HST
BEE
FCH
SHO
Dividend Yield (as of 3/22/12)
2011 AFFO Per Share Dividend Coverage
Ashford recently announced a 10%
dividend increase for 2012 |
 Conclusion
Conclusion
•
Best brands / high-quality portfolio
•
Proven operational outperformance due to Ashford asset
management expertise
•
Management thinks and acts like owners due to significant
ownership stake
•
These factors have led to earnings and shareholder return
outperformance
•
Very attractive dividend
23 |
 Company Presentation
March 2012 |