2014

Ashford Hospitality Trust Reports Fourth Quarter And Year End Results RevPAR Growth of 8.6% for all hotels in the Highland Hospitality Portfolio

Hotel EBITDA Margin growth of 295 bps for all hotels in the Highland Hospitality Portfolio

Adjusted EBITDA increased 10.9% for the Fourth Quarter

Adjusted EBITDA increased 14.3% for the Full Year 2012

DALLAS, Feb. 27, 2013 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) today reported the following results and performance measures for the fourth quarter ended December 31, 2012.  The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) are proforma.  Unless otherwise stated, all reported results compare the fourth quarter ended December 31, 2012, with the fourth quarter ended December 31, 2011 (see discussion below).  The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS

  • Adjusted EBITDA increased $8.2 million or 10.9% during the fourth quarter and $42.3 million or 14.3% for the full-year 2012
  • RevPAR for all hotels in continuing operations, including the Highland Hospitality portfolio, increased 5.3% during the quarter
  • RevPAR increased 8.6% for all hotels in the Highland Hospitality portfolio, driven by a 4.8% increase in ADR and a 242 basis point increase in occupancy
  • RevPAR increased 4.4% for all Legacy hotels in continuing operations, driven by a 2.5% increase in ADR and a 124 basis point increase in occupancy
  • For the full-year 2012, RevPAR for all hotels in continuing operations, including the Highland Hospitality portfolio, increased 5.1%
  • Hotel operating profit for all hotels, including the Highland Hospitality portfolio, increased by $8.2 million, or 9.5%
  • Hotel operating profit margin increased 133 basis points for all Legacy hotels not under renovation in continuing operations
  • Hotel operating profit margin increased 337 basis points for all Highland Hospitality hotels not under renovation in continuing operations
  • Net loss attributable to common shareholders was $21.1 million, or $0.32 per diluted share, compared with net loss attributable to common shareholders of $18.3 million, or $0.28 per diluted share, in the prior-year quarter
  • Adjusted funds from operations (AFFO) was $0.39 per diluted share for the quarter as compared with $0.42 from the prior-year quarter; Interest Rate Derivative Income decreased by $8.2 million as the benefits from our Flooridor terminated in 2011, impacting AFFO per share by $0.10
  • At the end of the fourth quarter 2012, Ashford had cash and cash equivalents of $186 million

CAPITAL ALLOCATION  

  • Capex invested in the quarter for the Legacy portfolio was $18.8 million bringing the full-year total to $81.4 million
  • Ashford's pro rata share of capex invested in the quarter for the Highland Hospitality portfolio was $6.8 million bringing the full-year total to $26.7 million

CAPITAL STRUCTURE
At December 31, 2012, Ashford had total assets of $3.5 billion in continuing operations, and $4.5 billion overall including the Highland portfolio which is not consolidated.  As of December 31, the Company had $2.3 billion of mortgage debt in continuing operations and $3.1 billion overall including Highland Hospitality.  The Company's total combined debt had a blended average interest rate of 4.5%, with a weighted average debt maturity of 3.7 years.

During the fourth quarter of 2012, Ashford successfully refinanced a $154 million non-recourse mortgage loan with a 12.72% interest rate.  The loan was refinanced with a new $211 million mortgage loan with a two-year initial term and three one-year extension options, subject to the satisfaction of certain conditions.  The new loan is interest only and provides for a floating interest rate of LIBOR + 6.15% with a 0.25% LIBOR Floor.  The refinance resulted in over $50 million of excess proceeds and the annual interest savings will be about $6 million per year, resulting in AFFO per share accretion of approximately $0.07.  This new debt financing was neutral to the company on a net debt basis.  The new loan remains secured by the same five hotels including: the Embassy Suites Crystal City, Embassy Suites Orlando Airport, Embassy Suites Santa Clara, Embassy Suites Portland and the Hilton Costa Mesa. 

On November 27, 2012, Ashford completed the sale of the Doubletree Guest Suites in Columbus, Ohio.  The transaction generated approximately $7.3 million in net proceeds. 

On December 18, 2012, the Company announced that it and its joint venture partner, Prudential Real Estate Investors or PREI®, closed a $103.0 million loan secured by the Hilton Boston Back Bay Hotel in Boston, Massachusetts.  The Hilton Boston Back Bay is part of the Highland Hospitality Portfolio of which Ashford has a 71.74% ownership interest.  The new financing has a five-year term and bears interest at a fixed interest rate of 4.38%, replacing an existing $63.0 million loan on the property with a fixed interest rate of 5.96%.  At closing, $31.9 million of the excess loan proceeds were used to pay down the mezzanine debt balance on the overall Highland Hospitality Portfolio, which had an average interest rate of 8.4%, thereby achieving annual interest savings of approximately $2.0 million.

On December 19, 2012, the Company transferred ownership of the Hilton El Conquistador in Tucson to the lender as part of a consensual foreclosure agreement previously disclosed.  Transferring this hotel to the lender has served to lower Ashford's overall debt level by $19.7 million while increasing both EBITDA and AFFO.

On December 27, 2012 the Company, along with its joint venture partner, Prudential Real Estate Investors or PREI®, closed a $112.6 million loan secured by the Renaissance Hotel in Nashville, Tennessee and the Westin Hotel in Princeton, New Jersey.  These hotels are part of the Company's Highland Hospitality Portfolio of which Ashford has a 71.74% ownership interest.  The new financing, which has a five-year term and bears interest at a fixed interest rate of 4.44%, replaces two existing loans with a combined balance of $76.8 million and a weighted average interest rate of 6.05%.  At closing, $30 million of the excess loan proceeds were deposited into reserve accounts to be used predominantly for future capital expenditures and $3.8 million were used to pay down the mezzanine debt balance on the overall Highland Hospitality Portfolio.

Subsequent to the end of the fourth quarter, the Company refinanced its sole remaining 2013 debt maturity, which was set to mature in August.  The prior $142 million loan was refinanced with a new $200.0 million loan that matures in February of 2018.  The new loan provides for a floating interest rate of LIBOR + 3.50%, with no LIBOR Floor and continues to be secured by the Capital Hilton in Washington, DC and the Hilton La Jolla Torrey Pines in La Jolla, CA.  Ashford has a 75% ownership interest in the properties, with Hilton holding the remaining 25%.  The excess loan proceeds above closing costs and reserves were distributed to the partners on a pro rata basis.  Ashford's share of the excess loan proceeds was approximately $40.0 million, which was added to the Company's unrestricted cash balance.  As a result, the refinancing was neutral to the Company on a net debt basis.

PORTFOLIO REVPAR
As of December 31, 2012, the Company's Legacy portfolio consisted of direct hotel investments with 94 properties classified in continuing operations.  During the fourth quarter of 2012, 75 of the hotels included in continuing operations were not under renovation.  The Company believes reporting its operating metrics for continuing operations on a proforma total basis (all 94 hotels) and proforma not under renovation basis (75 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its direct hotel portfolio.  Details of each category are provided in the tables attached to this release.

  • Proforma RevPAR increased 4.4% to $91.16 for all hotels in the Legacy portfolio on a 2.5% increase in ADR and a 124 basis point increase in occupancy
  • Proforma RevPAR increased 5.1% to $94.02 for hotels not under renovation in the Legacy portfolio on a 2.4% increase in ADR and a 184 basis point increase in occupancy
  • Proforma RevPAR increased 8.6% to $98.91 for all hotels in the Highland Hospitality portfolio on a 4.8% increase in ADR and a 242 basis point increase in occupancy
  • Proforma RevPAR increased 9.3% to $98.08 for hotels not under renovation in the Highland Hospitality portfolio on a 5.2% increase in ADR and a 253 basis point increase in occupancy

HIGHLAND HOSPITALITY PORTFOLIO UPDATE 
The Highland Hospitality portfolio experienced RevPAR growth of 8.6% during the fourth quarter of 2012, with RevPAR growth for hotels not under renovation in continuing operations of 9.3%.  The Highland Hospitality portfolio continued to experience strong EBITDA flow-through during the fourth quarter as a result of improved RevPAR growth, strong property management and the benefits of capital expenditures previously completed.  For all 28 hotels in the Highland Hospitality portfolio, Hotel EBITDA Margin increased 295 bps and Hotel EBITDA flow-through was 77%.  For the 20 hotels not under renovation during the third quarter 2012, Hotel EBITDA Margin increased 337 basis points and Hotel EBITDA flow-through was 76%.  Hotel EBITDA increased 18.4% in the fourth quarter for all hotels in the Highland Hospitality portfolio, and 13.7% for the full-year 2012. 

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
During the quarter, Hotel operating profit (Hotel EBITDA) for all Legacy hotels increased 7.0% to $72.2 million.  For the 75 hotels that were not under renovation, Proforma Hotel EBITDA increased 9.4% to $60.6 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 133 basis points to 30.9% for the 75 Legacy hotels not under renovation.  For all 94 Legacy hotels included in continuing operations, Proforma Hotel EBITDA margin increased 85 basis points to 30.2%.

For the Company's 71.74% share of all hotels in the Highland Hospitality portfolio, Hotel operating profit (Hotel EBITDA) increased 18.4% to $22.6 million.  For the 20 hotels in the Highland Hospitality portfolio that were not under renovation, Proforma Hotel EBITDA increased 21.7% to $16.0 million.  Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 337 basis points to 28.0% for the 20 Highland Hospitality hotels not under renovation.  For all 28 Highland Hospitality hotels included in continuing operations, Proforma Hotel EBITDA margin increased 295 basis points to 28.4%.

Starting with its second quarter 2012 financial results, the Company added additional disclosure information regarding property level trailing 12-month Hotel EBITDA by debt pool.  The Company believes this additional disclosure will assist the investment community in analyzing Ashford and help analysts and investors see the benefits of the non-recourse nature of its property level debt.  Prior to providing this information, the investment community could only reference the Company's total EBITDA and total debt when applying a valuation multiple.

Ashford believes year-over-year Hotel EBITDA and Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company's hotels than sequential quarter-over-quarter comparisons.  Given the substantial seasonality in the Company's portfolio and its active capital recycling, to help investors better understand this seasonality, the Company provides quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and certain prior-year periods based upon the number of core hotels in the portfolio as well as its pro-rata share of the Highland Hospitality portfolio as of the end of the current period.  As Ashford's portfolio mix changes from time to time so will the seasonality for Proforma Hotel EBITDA and Proforma Hotel EBITDA margin.  The details of the quarterly calculations for the previous four quarters for the current portfolio of 94 Legacy hotels included in continuing operations together with Ashford's pro-rata share of the Highland portfolio are provided in the table attached to this release.

BOARD OF DIRECTORS
On December 24, 2012, Ashford announced that former Chairman Archie Bennett, Jr. would retire on his 75th birthday, January 18, 2013, consistent with the Company's Corporate Governance Guidelines.  On January 19, 2013, he assumed the role of Chairman Emeritus and advisor to the Company providing his expertise and insights to the Company on various initiatives and projects.  Monty J. Bennett, who has served as Director and Chief Executive Officer of the Company since its formation in August 2003, succeeded him in his role as Chairman, effective January 19, 2013.

The Company also announced that the Board of Directors had appointed W. Michael Murphy as its new lead Director, replacing Mr. Martin L. Edelman.  Mr. Murphy, the Head of Lodging and Leisure Capital Markets for First Fidelity Companies, has been a Director since the Company's formation in August 2003.

In connection with these events, the Board of Directors modified the Company's Corporate Governance Guidelines to increase the size of the Board from seven to nine members and to rotate several members and chairmanships of the Board's committees.  Effective as of January 19, 2013, Mr. Douglas A. Kessler, Ashford's President, and Mr. Kamal Jafarnia were appointed to the Board.  Mr. Kessler continues to serve the Company as President, as he has done since January 2009.  Prior to being appointed President, Mr. Kessler was Ashford's Chief Operating Officer and Head of Acquisitions since the Company's formation.  Mr. Jafarnia, who holds a B.A. from the University of Texas, a J.D. from Temple University School of Law, and an L.L.M. from Georgetown University Law Center, has over 15 years of experience in the real estate and financial services industry as an attorney, owner, principal, compliance officer and executive.  Mr. Jafarnia is currently counsel in the Financial Services & Products Group and a member of the REIT Practice Group in the New York office of Alston & Bird, LLP.

Effective January 19, 2013, Ashford announced that the Board's Committees will be comprised of the following members:

  • Audit Committee:  Thomas E. Callahan – Chairman, W. Michael Murphy, Philip S. Payne
  • Nominating/Corporate Governance Committee: Martin L. Edelman – Chairman, Benjamin J. Ansell, Kamal Jafarnia
  • Compensation Committee:  Benjamin J. Ansell – Chairman, Thomas E. Callahan, Kamal Jafarnia

On January 24, 2013, the Board of Directors appointed Alan L. Tallis to fill the last vacancy on the Board.  From March 2008 through February 2011, Mr. Tallis served as Executive Vice President, Asset Management for Ashford.  From February 2011 through January 2012, Mr. Tallis continued to serve as a consultant to the Company.  Prior to joining the Company in March 2008, Mr. Tallis served as a senior advisor to Blackstone Real Estate Advisors following their acquisition of La Quinta Corporation from June 2006 to May 2007.  From July 2000 until May 2006, Mr. Tallis served in various positions with La Quinta Corporation, most recently serving as President and Chief Development Officer of LQ Management LLC and President of La Quinta Franchising LLC.  With the appointment of Mr. Tallis, Ashford's Board of Directors consists of nine members, six of whom are independent. 

COMMON STOCK DIVIDEND
On December 17, 2012, Ashford announced that its Board of Directors had declared a quarterly cash dividend of $0.11 per diluted share for the Company's common stock for the fourth quarter ending December 31, 2012, payable on January 15, 2013, to shareholders of record as of December 31, 2012.

The Board also approved the Company's dividend policy for 2013.  The Company expects to pay a quarterly cash dividend of $0.12 per share for 2013, or $0.48 per share on an annualized basis.  The Company believes a conservative approach to its dividend policy is prudent during the continuing global economic uncertainty and our nation's continuing economic recovery.  The adoption of a dividend policy does not commit the Board of Directors to declare future dividends or the amount thereof. The Board will continue to review its dividend policy on a quarter-to-quarter basis. 

"Our fourth quarter results demonstrate the significant progress we have made in improving our operating performance and unlocking the value of our Highland Hospitality portfolio through increased EBITDA growth driven by strong revenue growth and significant cost savings," commented Monty J. Bennett, Ashford's Chairman and Chief Executive Officer.  "Further, our capital market strategies have successfully addressed all of our near-term debt maturities while improving our liquidity position.  We believe we are well positioned from a cash and liquidity standpoint in terms of both safety and growth should opportunities to capitalize on accretive investments appear.  Finally, on behalf of the Company and the Board of Directors, I want to thank my father, Archie Bennett, Jr., for his many years of service and leadership to Ashford.  It has been a privilege to have him as our Chairman these past nine years and we look forward to his continued contributions to our success as Chairman Emeritus."

INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday, February 28, 2013, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (480) 629-9692.  A replay of the conference call will be available through Thursday March 7, 2013, by dialing (303) 590-3030 and entering the confirmation number, 4590417.

The Company will also provide an online simulcast and rebroadcast of its fourth quarter 2012 earnings release conference call.  The live broadcast of Ashford Hospitality Trust's quarterly conference call will be available online at the Company's web site, www.ahtreit.com on Thursday, February 28, 2013, beginning at 11:00 a.m. ET.  The online replay will follow shortly after the call and continue for approximately one year.

Substantially all of our non-current assets consist of real estate investments and debt investments secured by real estate.  Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to assist in evaluating a real estate company's operations. These supplemental measures include FFO, AFFO, EBITDA, and Hotel Operating Profit.  FFO is computed in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the NAREIT definition differently than us.  Neither FFO, AFFO, EBITDA, nor Hotel Operating Profit represents cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income (loss) as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity, nor are such measures indicative of funds available to satisfy our cash needs, including our ability to make cash distributions.  However, management believes FFO, AFFO, EBITDA, and Hotel Operating Profit to be meaningful measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance.

*  *  *  *  *

Ashford is a self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure.  Additional information can be found on the Company's website at www.ahtreit.com.

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks and uncertainties.  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, the timing for closing, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures.  Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford's control.

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 Ashford'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.  A capitalization rate is determined by dividing the property's annual net operating income by the purchase price.  Net operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues.  Funds from operations ("FFO"), as defined by the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002, represents net income (loss) computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from sales of properties and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, and net of adjustments for the portion of these items related to unconsolidated entities and joint ventures. 

The forward-looking statements included in this press release are only made as of the date of this press release.  Investors should not place undue reliance on these forward-looking statements.  We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)














December 31,


December 31,






2012


2011






 (Unaudited) 

ASSETS





Investment in hotel properties, net

$     2,872,304


$     2,957,899


Cash and cash equivalents

185,935


167,609


Restricted cash

84,786


84,069


Accounts receivable, net of allowance of $265 and $212, respectively

35,116


27,311


Inventories

2,111


2,371


Notes receivable, net of allowance of $8,333 and $8,711, respectively

11,331


11,199


Investment in unconsolidated joint ventures

158,694


179,527


Investments in securities and other

23,620


21,374


Deferred costs, net

17,194


17,421


Prepaid expenses

10,145


11,308


Derivative assets

6,391


37,918


Other assets

4,594


4,851


Intangible asset, net

2,721


2,810


Due from affiliates

1,168


1,312


Due from third-party hotel managers

48,619


62,747











Total assets

$     3,464,729


$     3,589,726









LIABILITIES AND EQUITY




Liabilities:





Indebtedness

$     2,339,410


$     2,362,458


Accounts payable and accrued expenses

84,293


82,282


Dividends payable

18,258


16,941


Unfavorable management contract liabilities

11,165


13,611


Due to related party, net

3,725


2,569


Due to third-party hotel managers

1,410


1,602


Liabilities associated with investments in securities and other

1,641


2,246


Other liabilities

6,348


5,400











Total liabilities

2,466,250


2,487,109









Redeemable noncontrolling interests in operating partnership

151,179


112,796









Equity:







Preferred stock, $0.01 par value, 50,000,000 shares authorized -







Series A Cumulative Preferred Stock, 1,657,206 shares issued and outstanding at








December 31, 2012 and 1,487,900 shares issued and outstanding at December 31, 2011

17


15




Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at








December 31, 2012 and 8,966,797 shares issued and outstanding at December 31, 2011

95


90




Series E Cumulative Preferred Stock, 4,630,000 shares issued and outstanding

46


46



Common stock, $0.01 par value, 200,000,000 shares authorized, 124,896,765 shares







issued, 68,150,617 and 68,032,289 shares outstanding, respectively 

1,249


1,249



Additional paid-in capital

1,766,168


1,746,259



Accumulated other comprehensive loss

(282)


(184)



Accumulated deficit

(770,467)


(609,272)



Treasury stock, at cost (56,746,148 shares and 56,864,476 shares, respectively)

(164,884)


(164,796)




Total shareholders' equity of the Company

831,942


973,407


Noncontrolling interests in consolidated joint ventures

15,358


16,414











Total equity

847,300


989,821












Total liabilities and equity

$     3,464,729


$     3,589,726

















 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)
















 Three Months Ended 


 Year Ended 





 December 31, 


 December 31, 





2012


2011


2012


2011





 (Unaudited) 


 (Unaudited) 

REVENUE









Rooms

$    186,326


$    173,008


$    727,124


$    669,660


Food and beverage

45,106


43,362


160,488


150,651


Rental income from operating leases


1,333



5,341


Other

9,094


8,693


34,689


33,964














Total hotel revenue

240,526


226,396


922,301


859,616


Other

52


145


305


362














Total  Revenue

240,578


226,541


922,606


859,978












EXPENSES









Hotel operating expenses










Rooms

44,550


41,576


166,625


154,679



Food and beverage

29,838


28,694


108,274


102,776



Other expenses

72,961


70,372


276,949


260,088



Management fees 

10,350


9,504


38,492


35,390















Total hotel operating expenses

157,699


150,146


590,340


552,933













Property taxes, insurance, and other

11,566


11,300


44,903


45,085


Depreciation and amortization

33,287


33,613


133,979


131,243


Impairment charges

(96)


(93)


(5,349)


(4,841)


Gain on insurance settlement

(91)


(130)


(91)


(2,035)


Transaction acquisition costs


(2)



(793)


Corporate, general, and administrative:










Stock/unit-based compensation

3,739


3,963


17,440


12,391



Other general and administrative

7,283


6,577


26,610


32,131















Total Operating Expenses

213,387


205,374


807,832


766,114












OPERATING INCOME

27,191


21,167


114,774


93,864













Equity in earnings (loss) of unconsolidated joint ventures

(3,179)


(5,068)


(20,833)


14,528


Interest income

41


15


125


85


Other income

8,712


26,015


31,700


109,524


Interest expense

(34,615)


(33,199)


(138,661)


(132,670)


Amortization of loan costs

(1,892)


(1,096)


(6,135)


(4,542)


Write-off of deferred loan costs

(3,998)



(3,998)


(729)


Unrealized gain (loss) on investments

(863)


(1,614)


2,502


(391)


Unrealized loss on derivatives

(8,905)


(17,473)


(35,657)


(70,286)












INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(17,508)


(11,253)


(56,183)


9,383


Income tax (expense) benefit

509


787


(2,375)


(1,620)












INCOME (LOSS) FROM CONTINUING OPERATIONS

(16,999)


(10,466)


(58,558)


7,763

Income (loss) from discontinued operations

3,316


(1,287)


(3,650)


(7,880)












NET LOSS

(13,683)


(11,753)


(62,208)


(117)

Income from consolidated joint ventures attributable to noncontrolling interests

(1,311)


(73)


(868)


(610)

Net loss attributable to redeemable noncontrolling interests in operating partnership

2,393


1,629


9,296


2,836












NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

(12,601)


(10,197)


(53,780)


2,109

Preferred dividends

(8,491)


(8,135)


(33,802)


(46,876)












NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$    (21,092)


$    (18,332)


$    (87,582)


$    (44,767)












INCOME PER SHARE – BASIC AND DILUTED:









Basic:










Loss from continuing operations attributable to common shareholders

$        (0.36)


$        (0.26)


$        (1.25)


$        (0.60)



Income (loss) from discontinued operations attributable to common shareholders

0.04


(0.02)


(0.05)


$        (0.13)














Net loss attributable to common shareholders

$        (0.32)


$        (0.28)


$        (1.30)


$        (0.73)














Weighted average common shares outstanding – basic

67,670


67,132


67,533


61,954













Diluted:










Loss from continuing operations attributable to common shareholders

$        (0.36)


$        (0.26)


$        (1.25)


$        (0.60)



Income (loss) from discontinued operations attributable to common shareholders

0.04


$        (0.02)


(0.05)


$        (0.13)














Net loss attributable to common shareholders

$        (0.32)


$        (0.28)


$        (1.30)


$        (0.73)














Weighted average common shares outstanding – diluted

67,670


67,132


67,533


61,954













Dividends declared per common share:

$          0.11


$          0.10


$          0.44


$          0.40












Amounts attributable to common shareholders:









Income (loss) from continuing operations, net of tax

$    (15,488)


$      (9,057)


$    (50,570)


$        9,948


Loss from discontinued operations, net of tax

2,887


(1,140)


(3,210)


(7,839)


Preferred dividends

(8,491)


(8,135)


(33,802)


(46,876)














Net loss attributable to common shareholders

$    (21,092)


$    (18,332)


$    (87,582)


$    (44,767)












 


 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

 RECONCILIATION OF NET LOSS TO EBITDA 

 (in thousands) 

 (Unaudited) 












 Three Months Ended 


 Year Ended 




 December 31, 


 December 31, 




2012


2011


2012


2011











 Net loss 


$    (13,683)


$    (11,753)


$    (62,208)


$         (117)

 Income from consolidated joint ventures attributable to noncontrolling interests 

(1,311)


(73)


(868)


(610)

 Net loss attributable to redeemable noncontrolling interests in operating partnership 

2,393


1,629


9,296


2,836

 Net income (loss) attributable to the Company 

(12,601)


(10,197)


(53,780)


2,109












 Interest income 

(41)


(15)


(124)


(84)


 Interest expense and amortization of loan costs 

36,576


34,233


144,857


137,466


 Depreciation and amortization  

33,011


33,484


133,463


130,995


 Impairment charges 

(96)


(93)


(1,229)


1,395


 Income tax expense 

(532)


(787)


2,352


1,705


 Net loss attributable to redeemable noncontrolling interests in operating partnership 

(2,393)


(1,629)


(9,296)


(2,836)


 Equity in (earnings) loss of unconsolidated joint ventures 

3,179


5,068


20,833


(14,528)


 Company's portion of EBITDA of unconsolidated joint ventures 

21,054


18,622


78,730


104,807











 EBITDA 


78,157


78,686


315,806


361,029












 Amortization of unfavorable management contract liabilities 

(753)


(753)


(2,447)


(2,447)


 Gain on sale/disposition of properties 

(4,490)


(5)


(4,488)


(2,655)


 Non-cash gain on insurance settlements 

(91)


(130)


(91)


(1,287)


 Write-off of loan costs, premiums, and exit fees, net 

4,117


-


4,117


1,677


 Other income (1) 

(8,712)


(26,015)


(31,700)


(109,524)


 Transaction acquisition costs 

-


(2)


-


(793)


 Dead deal costs 

869


-


869


-


 Legal costs related to litigation settlements (2) 

28


-


2,491


6,875


 Unrealized (gain) loss on investments 

863


1,614


(2,502)


391


 Unrealized loss on derivatives 

8,905


17,473


35,657


70,286


 El Conquistador results since appointment of receiver 

505


-


1,402


-


 Debt restructuring costs 

-


823


-


823


 Equity-based compensation 

3,739


3,963


17,440


12,391


 Company's portion of adjustments to EBITDA of unconsolidated joint ventures 

(7)


(682)


219


(42,248)











 Adjusted EBITDA 

$      83,130


$      74,972


$    336,773


$    294,518











(1)

Other income primarily consisting of income from interest rate derivatives in both periods, net realized (gain) loss on investments in securities and other in both periods, and a $30.0 million litigation settlement in the year ended December 31, 2011 are excluded from Adjusted EBITDA.  


(2)

Legal costs associated with litigation settlements are excluded from Adjusted EBITDA.



































 RECONCILIATION OF NET LOSS TO FUNDS FROM OPERATIONS ("FFO") 

 (in thousands, except per share amounts) 

 (Unaudited) 














 Three Months Ended 


 Year Ended 




 December 31, 


 December 31, 




2012


2011


2012


2011











 Net loss 


$    (13,683)


$    (11,753)


$    (62,208)


$         (117)

 Income from consolidated joint ventures attributable to noncontrolling interests 

(1,311)


(73)


(868)


(610)

 Net loss attributable to redeemable noncontrolling interests in operating partnership 

2,393


1,629


9,296


2,836

 Preferred dividends 

(8,491)


(8,135)


(33,802)


(46,876)











 Net loss attributable to common shareholders 

(21,092)


(18,332)


(87,582)


(44,767)












 Depreciation and amortization on real estate 

32,957


33,419


133,246


130,741


 Impairment charges 

(96)


(93)


(1,229)


1,395


 Gain on sale/dispoistion of properties 

(4,490)


(5)


(4,488)


(2,655)


 Non-cash gain on insurance settlements 

(91)


(130)


(91)


(1,287)


 Net loss attributable to redeemable noncontrolling interests in operating partnership 

(2,393)


(1,629)


(9,296)


(2,836)


 Equity in (earnings) loss of unconsolidated joint ventures 

3,179


5,068


20,833


(14,528)


 Company's portion of FFO of unconsolidated joint ventures 

10,241


4,671


31,496


8,125











 FFO available to common shareholders 

18,215


22,969


82,889


74,188












 Dividends on convertible preferred stock 

-


-


-


1,374


 Write-off of loan costs, premiums, and exit fees, net 

4,117


-


4,117


1,677


 Transaction acquisition costs 

-


(2)


-


(793)


 Legal costs related to litigation settlements (2) 

28


-


2,491


6,875


 Dead deal costs 

869


-


869


-


 Other income (1) 

(660)


(9,515)


340


(38,663)


 Unrealized (gain) loss on investments 

863


1,614


(2,502)


391


 Unrealized loss on derivatives 

8,905


17,473


35,657


70,286


 Non-cash dividends on Series B-1 preferred stock 

-


-


-


17,363


 Debt restructuring costs 

-


823


-


823


 El Conquistador results, interest, and amortization of deferred loan costs since appointment of receiver 

924


-


2,068


-


 Equity-based compensation adjustment related to modified employment terms 

-


-


480


-


 Company's portion of adjustments to FFO of unconsolidated joint ventures 

1


1,569


234


16,682











 Adjusted FFO available to common shareholders 

$      33,262


$      34,931


$    126,643


$    150,203











 Adjusted FFO per diluted share available to common shareholders 

$          0.39


$          0.42


$          1.49


$          1.86











 Weighted average diluted shares 

85,389


83,850


85,082


80,597











(1)

Other income primarily consisting of net realized (gain) loss on investments in securities and other in both periods and a $30.0 million litigation settlement in the year ended December 31, 2011 are excluded from Adjusted FFO.  


(2)

 Legal costs associated with litigation settlements are excluded from Adjusted FFO.











 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

LEGACY PORTFOLIO ONLY

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

December 31, 2012

(dollars in thousands)

(Unaudited)


































 Fixed-Rate 


 Floating-Rate 


 Total 


 TTM Hotel 


 TTM EBITDA 

Indebtedness


Maturity


Interest Rate


 Debt 


 Debt 


 Debt 


 EBITDA 


 Debt Yield 















 Aareal - 2 hotels 

August 2013


LIBOR + 2.75%


$              -


$        141,667


$      141,667


$     24,183


17.1%

 BoA MIP - 5 hotels 

March 2014


LIBOR + 4.50%


-


173,180

(1)

173,180


18,303


10.6%

 JPM Floater - 9 hotels 

May 2014


LIBOR + 6.50%


-


135,000

(2)

135,000


16,815


12.5%

 GEMSA Manchester - 1 hotel 

May 2014


8.32%


5,285


-


5,285


471


8.9%

 Senior credit facility - Various 

September 2014


LIBOR + 2.75% to 3.5%


-


-


-


 N/A 


N/A

 Goldman Sachs - 5 hotels 

November 2014


Greater of 6.40% or LIBOR + 6.15%


-


211,000

(3)

211,000


24,028


11.4%

 UBS 1 - 8 hotels 

December 2014


5.75%


104,680


-


104,680


12,474


11.9%

 Merrill 1 - 10 hotels 

July 2015


5.22%


152,513


-


152,513


19,756


13.0%

 UBS 2 - 8 hotels 

December 2015


5.70%


96,907


-


96,907


13,169


13.6%

 Merrill 2 - 5 hotels 

February 2016


5.53%


110,169


-


110,169


17,488


15.9%

 Merrill 3 - 5 hotels 

February 2016


5.53%


91,364


-


91,364


15,265


16.7%

 Merrill 7 - 5 hotels 

February 2016


5.53%


79,140


-


79,140


12,815


16.2%

 Wachovia Philly CY - 1 hotel 

April 2017


5.91%


34,735


-


34,735


9,805


28.2%

 Wachovia 3 - 2 hotels 

April 2017


5.95%


127,289


-


127,289


14,994


11.8%

 Wachovia 7 - 3 hotels 

April 2017


5.95%


259,021


-


259,021


24,056


9.3%

 Wachovia 1 - 5 hotels 

April 2017


5.95%


114,732


-


114,732


11,303


9.9%

 Wachovia 5 - 5 hotels 

April 2017


5.95%


103,126


-


103,126


9,507


9.2%

 Wachovia 6 - 5 hotels 

April 2017


5.95%


156,918


-


156,918


15,665


10.0%

 Wachovia 2 - 7 hotels 

April 2017


5.95%


125,517


-


125,517


11,722


9.3%

 TIF Philly CY - 1 hotel 

June 2018


12.85%


8,098


-


8,098


 N/A 


N/A

 GACC Gateway - 1 hotel 

November 2020


6.26%


102,562


-


102,562


15,972


15.6%

 Zion Jacksonville RI - 1 hotel 

April 2034


Greater of 6% or Prime + 1%


-


6,507


6,507


1,186


18.2%

 Unencumbered hotels 





-


-


-


932


N/A















 Total 





$ 1,672,056


$        667,354


$   2,339,410


$   289,909


12.4%















 Percentage 





71.5%


28.5%


100.0%



















 Weighted average interest rate 


5.85%


5.29%


5.69%


















 Total indebtedness with effect of interest rate swaps 

$ 1,672,056


$        667,354


$   2,339,410


















 Percentage with the effect of interest rate swaps 


71.5%


28.5%


100.0%


















 Weighted average interest rate with the effect of interest rate swaps 

3.96%

(4)

5.29%

(4)

4.34%


















All indebtedness is non-recourse with the exception of the credit facility.







(1)This mortgage loan has a one-year extension option beginning March 2014, subject to satisfaction of certain conditions.




(2)This mortgage loan has three one-year extension options beginning May 2014, subject to satisfaction of certain conditions.




(3)This mortgage loan has three one-year extension options beginning November 2014, subject to satisfaction of certain conditions.

(4)These rates are calculated assuming the LIBOR rate stays at the December 31, 2012 level and with the effect of our interest rate derivatives.






























































HIGHLAND HOSPITALITY PORTFOLIO

(PIM HIGHLAND HOLDING LLC)

SUMMARY OF INDEBTEDNESS

ASHFORD'S PRO RATA 71.74% SHARE

December 31, 2012

(dollars in thousands)

(Unaudited)





































 Fixed-Rate 


 Floating-Rate 


 Total 


 TTM Hotel 


 TTM EBITDA 

Indebtedness


Maturity


Interest Rate


 Debt 


 Debt 


 Debt 


 EBITDA 


 Debt Yield 















 Wells Senior - 25 hotels 

March 2014


LIBOR + 2.75%


$              -


$        380,222

(1)

$      380,222


$     63,519


16.7%

 Mezz 1 - 28 hotels 

March 2014


Greater of 7.00% or LIBOR + 6.00%


-


94,213

(1)

94,213


84,581


13.4%

 Mezz 2 - 28 hotels 

March 2014


Greater of 8.00% or LIBOR + 7.00%


-


89,689

(1)

89,689


84,581


11.8%

 Mezz 3 - 28 hotels 

March 2014


Greater of 10.50% or LIBOR + 9.50%


-


76,876

(1)

76,876


84,581


10.6%

 Mezz 4 - 28 hotels 

March 2014


LIBOR + 2.00%




13,218

(1)

13,218


84,581


10.5%

 Morgan Stanley Boston Back Bay - 1 hotel 

January 2018


4.38%


73,892


-


73,892


9,193


12.4%

 Morgan Stanley Princeton/Nashville - 2 hotels 

January 2018


4.44%


80,779


-


80,779


11,869


14.7%















 Total (Ashford's 71.74% share only) 


$    154,671


$        654,218


$      808,889


$     84,581


10.5%















 Percentage 





19.1%


80.9%


100.0%



















 Weighted average interest rate 


4.41%


5.10%


4.97%




















 Percentage with the effect of interest rate swaps 


19.1%


80.9%


100.0%




















 Total Ashford plus Ashford's 71.74% share of PIM Highland Holding LLC 

$   1,826,727


$     1,321,572


$   3,148,299


$   374,490


11.9%
















 Percentage with the effect of interest rate swaps 

58.0%


42.0%


100.0%




















 Weighted average interest rate with the effect of interest rate swaps 

4.00%


5.20%


4.50%





(1)Each of these loans has two one-year extension options beginning March 2014.























 

 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

LEGACY PORTFOLIO ONLY

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 December 31, 2012 

 (in thousands) 

 (Unaudited) 







































2013


2014


2015


2016


2017


 Thereafter 


 Total 


















 Aareal - 2 hotels 

$     140,167


$                    -


$                -


$                -


$                -


$                  -


140,167

 GEMSA Manchester - 1 hotel 

-


5,004


-


-


-


-


5,004

 Senior credit facility - Various 

-


-


-


-


-


-


-

 UBS 1 - 8 hotels 

-


100,119


-


-


-


-


100,119

 BoA MIP - 5 hotels 

-


-


176,400


-


-


-


176,400

 Merrill 1 - 10 hotels 

-


-


142,922


-


-


-


142,922

 UBS 2 - 8 hotels 

-


-


90,680


-


-


-


90,680

 Merrill 2 - 5 hotels 

-


-


-


101,740


-


-


101,740

 Merrill 3 - 5 hotels 

-


-


-


84,374


-


-


84,374

 Merrill 7 - 5 hotels 

-


-


-


73,086


-


-


73,086

 JPM Floater - 9 hotels 

-


-


-


-


135,000


-


135,000

 Wachovia Philly CY - 1 hotel 

-


-


-


-


32,532


-


32,532

 Wachovia 3 - 2 hotels 

-


-


-


-


119,245


-


119,245

 Wachovia 7 - 3 hotels 

-


-


-


-


242,201


-


242,201

 Wachovia 1 - 5 hotels 

-


-


-


-


107,351


-


107,351

 Wachovia 5 - 5 hotels 

-


-


-


-


96,491


-


96,491

 Wachovia 6 - 5 hotels 

-


-


-


-


146,823


-


146,823

 Wachovia 2 - 7 hotels 

-


-


-


-


117,441


-


117,441

 Goldman Sachs - 5 hotels 

-


-


-


-


211,000


-


211,000

 TIF Philly CY - 1 hotel 

-


-


-


-


-


8,098


8,098

 GACC Gateway - 1 hotel 

-


-


-


-


-


89,886


89,886

 Zion Jacksonville RI - 1 hotel 

-


-


-


-


-


-


-


















 Principal due in future periods 

$     140,167


$           105,123


$      410,002


$      259,200


$    1,208,084


$          97,984


$     2,220,560


















 Scheduled amortization payments remaining 

29,570


28,164


26,635


16,723


15,255


2,503


118,850


















 Total indebtedness of continuing operations 

$     169,737


$           133,287


$      436,637


$      275,923


$    1,223,339


$        100,487


$     2,339,410


















 NOTE: These maturities assume no event of default would occur. 



























































































HIGHLAND HOSPITALITY PORTFOLIO

 (PIM HIGHLAND HOLDING LLC) 

 INDEBTEDNESS BY MATURITY 

 ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 ASHFORD'S PRO RATA 71.74% SHARE 

 December 31, 2012 

 (in thousands) 

 (Unaudited) 







































2013


2014


2015


2016


2017


 Thereafter 


 Total 


















 Wells Senior - 25 hotels 

$              -


$                    -


$                -


$      380,222


$                -


$                  -


$        380,222

 Mezz 1 - 28 hotels 

-


-


-


94,213


-


-


94,213

 Mezz 2 - 28 hotels 

-


-


-


89,689


-


-


89,689

 Mezz 3 - 28 hotels 

-


-


-


76,876


-


-


76,876

 Mezz 4 - 28 hotels 

-


-


-


13,218


-


-


13,218

 Morgan Stanley Boston Back Bay - 1 hotel 

-


-


-


-


-


67,358


67,358

 Morgan Stanley Princeton/Nashville - 2 hotels 

-


-


-


-


-


73,702


73,702


















 Principal due in future periods 

$              -


$                    -


$                -


$      654,218


$                -


$        141,060


$        795,278


















 Scheduled amortization payments remaining 

2,319


2,640


2,758


2,882


3,012


-


13,611


















 Total indebtedness of continuing operations (Ashford's 71.74% share only) 

2,319


2,640


2,758


657,100


3,012


141,060


808,889


















 Total indebtedness of continuing operations plus Ashford's 














     71.74% share of PIM Highland Holding LLC 

$     172,056


$           135,927


$      439,395


$      933,023


$    1,226,351


$        241,547


$     3,148,299


















 

ASHFORD HOSPITALITY TRUST, INC.

KEY PERFORMANCE INDICATORS - PRO FORMA

LEGACY PORTFOLIO ONLY

(dollars in thousands)

(Unaudited)
































Three Months Ended


Year Ended




December 31,


December 31,




2012


2011


% Variance


2012


2011


% Variance















ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:













Room revenues (in thousands)

$  185,343


$  177,550


4.39%


$  722,797


$  686,211


5.33%


RevPAR

$      91.16


$      87.32


4.40%


$      98.80


$      93.93


5.18%


Occupancy

69.68%


68.44%


1.24%


73.80%


72.52%


1.28%


ADR

$    130.82


$    127.59


2.53%


$    133.87


$    129.52


3.36%















NOTES: