Ashford Hospitality Trust Reports Second Quarter Results

RevPAR Growth of 7.6% for Highland Hotels Not Under Renovation

RevPAR Growth of 7.3% for Legacy Hotels Not Under Renovation

205 Basis Point Improvement in Hotel EBITDA Margin for All Highland Hotels

01 Aug, 2012, 16:05 ET from Ashford Hospitality Trust, Inc.

DALLAS, Aug. 1, 2012 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) today reported the following results and performance measures for the second quarter ended June 30, 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 second quarter ended June 30, 2012, with the second quarter ended June 30, 2011 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS

  • RevPAR increased 6.2% for all Legacy hotels in continuing operations, driven by a 3.7% increase in ADR and a 182 basis point increase in occupancy
  • RevPAR increased 6.4% for all hotels in the Highland Hospitality Portfolio, driven by a 3.1% increase in ADR and a 239 basis point increase in occupancy
  • Hotel operating profit for all hotels, including Highland, increased by $10.7 million, or 10.8%
  • Hotel operating profit margin increased 159 basis points for all Legacy hotels not under renovation in continuing operations
  • Hotel operating profit margin increased 221 basis points for the 22 hotels in the Highland Hospitality Portfolio not under renovation in continuing operations 
  • Net loss attributable to common shareholders was $13.3 million, or $0.20 per diluted share, compared with net loss attributable to common shareholders of $29.1 million, or $0.49 per diluted share, in the prior-year quarter
  • Adjusted funds from operations (AFFO) was $0.52 per diluted share for the quarter as compared with $0.65 from the prior-year quarter; Interest Rate Derivative Income decreased by $10.2 million as the benefits from our Flooridor terminated in 2011, impacting AFFO per share by $0.12; Increases in Income Taxes, Interest Expense, Equity Based Compensation, and Preferred Dividends impacted AFFO per share by an additional $0.07
  • Fixed charge coverage ratio was 1.48x under the senior credit facility covenant versus a required minimum of 1.35x
  • During the second quarter 2012, Ashford sold 300,802 shares of its Series A and Series D Cumulative Preferred Stock through its At-the-Market program for total gross proceeds of $7.4 million
  • At the end of the second quarter 2012, Ashford had cash and cash equivalents of $139 million

CAPITAL ALLOCATION  

  • Capex invested in the quarter for the Legacy portfolio was $20.8 million 
  • Capex invested in the quarter for the Highland Hospitality Portfolio was $7.0 million

CAPITAL STRUCTURE

During the second quarter, Ashford successfully refinanced its sole 2012 debt maturity.  The $167.2 million loan set to mature in May 2012 was refinanced with a new $135.0 million loan that matures in May of 2014 and has three one-year extension options subject to satisfaction of certain conditions.  The new loan provides for a floating interest rate of LIBOR + 6.50%, with no LIBOR Floor.  Additionally, the new loan is secured by nine hotels as the Doubletree Guest Suites in Columbus, Ohio, was unencumbered as a result of this refinancing.  The Company is currently actively marketing the Doubletree Columbus for sale.

Ashford is presently engaged in discussions regarding the refinancing of its $101 million of loans in the Highland Hospitality Portfolio set to mature in early 2013.  The trailing 12-month debt yield on this high quality portfolio is currently in excess of 16%.  At this time, given the potential loan proceeds, there is no anticipated pay down required.  The Company is well positioned for essentially all upcoming debt maturities in 2013 and 2014.

During the second quarter, the Company took an impairment charge of $4.1 million on the Hilton El Conquistador Resort in Tucson, AZ.  The Company is currently in discussions with the lender on the property for a potential deed-in-lieu or consensual foreclosure and receivership transaction.

Additionally, in the second quarter 2012, the Company sold 48,575 shares of its 8.55% Series A Cumulative Preferred Stock at $24.61 per share and sold 252,227 shares of its 8.45% Series D Cumulative Preferred Stock at $24.49 per share through its At-the-Market program for total gross proceeds of $7.4 million

HIGHLAND HOSPITALITY PORTFOLIO UPDATE 

The Highland Hospitality Portfolio experienced RevPAR growth of 6.4% during the second quarter of 2012, with RevPAR growth for hotels not under renovation in continuing operations of 7.6%.  For all 28 hotels in the Highland Hospitality Portfolio, Hotel EBITDA Margin increased 205 bps and Hotel EBITDA flow-through was 80%.  For the 22 hotels not under renovation during the second quarter 2012, Hotel EBITDA Margin increased 221 basis points and Hotel EBITDA flow-through was 71%.  Hotel EBITDA increased 11.3% in the second quarter for all hotels in the Highland Hospitality Portfolio, and since the closing of the acquisition, trailing 12-month EBITDA has increased 15.8%.

PORTFOLIO REVPAR

As of June 30, 2012, the Company's Legacy portfolio consisted of direct hotel investments with 96 properties classified in continuing operations.  During the second quarter, 87 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 96 hotels) and proforma not under renovation basis (87 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its direct hotel portfolio.  The Company's reporting by region and brand includes the results of all 96 hotels in continuing operations.  Details of each category are provided in the tables attached to this release.

  • Proforma RevPAR increased 6.2% to $106.40 for all hotels in the Legacy portfolio on a 3.7% increase in ADR and a 182 basis point increase in occupancy
  • Proforma RevPAR increased 7.3% to $105.06 for hotels not under renovation in the Legacy portfolio on a 4.0% increase in ADR and a 237 basis point increase in occupancy
  • Proforma RevPAR increased 6.4% to $111.89 for all hotels in the Highland Hospitality Portfolio on a 3.1% increase in ADR and a 239 basis point increase in occupancy
  • Proforma RevPAR increased 7.6% to $110.97 for hotels not under renovation in the Highland Hospitality Portfolio on a 3.0% increase in ADR and a 328 basis point increase in occupancy

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

During the quarter, Hotel operating profit (Hotel EBITDA) for all Legacy hotels increased 10.7% to $82.6 million.  For the 87 hotels that were not under renovation, Proforma Hotel EBITDA increased 12.4% to $72.9 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 159 basis points to 34.1% for the 87 Legacy hotels not under renovation.  For all 96 Legacy hotels included in continuing operations, Proforma Hotel EBITDA margin increased 142 basis points to 33.4%.

For the Company's 71.74% share of all hotels in the Highland Hospitality Portfolio, Hotel operating profit (Hotel EBITDA) increased 11.3% to $26.9 million.  For the 22 hotels in the Highland Hospitality Portfolio that were not under renovation, Proforma Hotel EBITDA increased 13.5% to $21.4 million.  Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 221 basis points to 32.2% for the 22 Highland hotels not under renovation.  For all 28 Highland Hospitality hotels included in continuing operations, Proforma Hotel EBITDA margin increased 205 basis points to 33.2%.

Beginning with this quarterly release, the Company has added additional disclosure information regarding property level trailing 12-month Hotel EBITDA by debt pool.  The decision to add this additional disclosure comes after the Company had received feedback from multiple investors and analysts.  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.  With this new disclosure, analysts and investors can analyze the EBITDA of the Company by debt pool and when using a valuation multiple approach, can see where the market might be inadvertently implying negative equity value to certain debt pools.  Implied negative equity value in any debt pools may underestimate the benefits of non-recourse debt, and all of the Company's property level debt is non-recourse.  Also, as a result of the feedback received from analysts and investors, the Company has added some additional performance tables to the release while other tables have been removed.

Additionally, the Company has started adding back the non-cash stock/unit-based amortization expense in its calculation of Adjusted EBITDA.  Since this is a non-cash item, the Company believes this gives a better picture of true cash EBITDA and is consistent with many industry peers.  The Company will continue to show the non-cash stock/unit-based amortization expense as a deduct for AFFO purposes and the associated shares are reflected in its fully diluted share count once the shares vest.

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 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 96 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.

COMMON STOCK DIVIDEND

On June 15, 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 second quarter ending June 30, 2012, payable July 16, 2012, to shareholders of record as of June 29, 2012.

Monty J. Bennett, Chief Executive Officer, commented, "Our solid second quarter 2012 RevPAR improvement for both our Legacy and Highland Hospitality portfolios reflects the continuing, successful integration of Highland into our overall portfolio, as the Highland hotels benefit from more efficient property management and capital investments that we've made to unlock the inherent value in these assets.  At the same time, U.S. lodging industry conditions have shown steady improvement as a lack of new supply has helped the market.  We maintain that we are still in the early stages in this cycle and see tremendous potential upside as market conditions gradually strengthen.  At Ashford, we remain conservative after what we've seen during the prior industry down cycle.  With today's continuing economic concerns, we have been diligent in proactively addressing upcoming debt maturities and ensuring the Company has the necessary financial flexibility to weather any potential short-term economic fluctuations, while positioning ourselves to take advantage of opportunistic investments that meet our risk-adjusted return criteria as hotel fundamentals continue to improve."

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday August 2, 2012, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (480) 629-9771.  A replay of the conference call will be available through Thursday August 9, 2012, by dialing (303) 590-3030 and entering the confirmation number, 4549835.

The Company will also provide an online simulcast and rebroadcast of its second 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 August 2, 2012, 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)

June 30,

December 31,

2012

2011

 (Unaudited) 

ASSETS

Investment in hotel properties, net

$     2,929,113

$     2,957,899

Cash and cash equivalents

139,466

167,609

Restricted cash

76,558

84,069

Accounts receivable, net of allowance of $246 and $212, respectively

41,167

28,623

Inventories

2,366

2,371

Notes receivable

11,262

11,199

Investment in unconsolidated joint ventures

169,246

179,527

Investments in securities and other

30,739

21,374

Deferred costs, net

18,265

17,421

Prepaid expenses

13,897

11,308

Derivative assets

22,253

37,918

Other assets

5,467

4,851

Intangible asset, net

2,765

2,810

Due from third-party hotel managers

62,115

62,747

Total assets

$     3,524,679

$     3,589,726

LIABILITIES AND EQUITY

Liabilities:

Indebtedness

$     2,318,943

$     2,362,458

Accounts payable and accrued expenses

94,232

82,282

Dividends payable

18,260

16,941

Unfavorable management contract liabilities

12,482

13,611

Due to related party, net

2,330

2,569

Due to third-party hotel managers

2,146

1,602

Liabilities associated with investments in securities and other

9,953

2,246

Other liabilities

5,435

5,400

Total liabilities

2,463,781

2,487,109

Redeemable noncontrolling interests in operating partnership

126,466

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

June 30, 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

June 30, 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, 68,163,909 and 68,032,289 shares outstanding, respectively 

1,249

1,249

Additional paid-in capital

1,761,158

1,746,259

Accumulated other comprehensive loss

(261)

(184)

Accumulated deficit

(679,533)

(609,272)

Treasury stock, at cost (56,732,856 shares and 56,864,476 shares, respectively)

(164,829)

(164,796)

Total shareholders' equity of the Company

917,942

973,407

Noncontrolling interests in consolidated joint ventures

16,490

16,414

Total equity

934,432

989,821

Total liabilities and equity

$     3,524,679

$     3,589,726

 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 Three Months Ended 

 Six Months Ended 

 June 30, 

 June 30, 

2012

2011

2012

2011

 (Unaudited) 

 (Unaudited) 

REVENUE

Rooms

$    194,188

$    177,040

$    368,736

$    339,789

Food and beverage

44,415

41,242

86,117

79,649

Rental income from operating leases

-

1,484

-

2,704

Other

10,453

10,253

20,015

19,599

Total hotel revenue

249,056

230,019

474,868

441,741

Asset management fees and other

77

80

152

148

Total  Revenue

249,133

230,099

475,020

441,889

EXPENSES

Hotel operating expenses

Rooms

42,852

39,205

82,590

76,251

Food and beverage

28,758

27,121

57,401

53,602

Other expenses

75,715

68,928

145,061

134,402

Management fees 

10,047

9,184

19,198

18,043

Total hotel operating expenses

157,372

144,438

304,250

282,298

Property taxes, insurance, and other

10,525

11,769

22,680

22,656

Depreciation and amortization

34,184

33,027

68,539

65,804

Impairment charges

4,025

(4,316)

3,933

(4,656)

Gain on insurance settlement

-

(1,905)

-

(1,905)

Transaction acquisition costs

-

406

-

(818)

Corporate, general, and administrative:

Stock/unit-based compensation

4,223

3,546

9,369

5,360

Other general and administrative

7,707

7,459

12,807

19,528

Total Operating Expenses

218,036

194,424

421,578

388,267

OPERATING INCOME

31,097

35,675

53,442

53,622

Equity in earnings (loss) of unconsolidated joint ventures

23

(2,301)

(10,281)

25,824

Interest income

22

23

54

59

Other income

6,703

18,157

14,317

66,160

Interest expense

(35,123)

(33,520)

(69,116)

(67,019)

Amortization of loan costs

(1,466)

(1,288)

(2,678)

(2,367)

Unrealized gain on investments

1,628

39

3,413

39

Unrealized loss on derivatives

(7,458)

(17,733)

(17,399)

(34,550)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(4,574)

(948)

(28,248)

41,768

Income tax expense

(1,366)

(285)

(2,245)

(1,329)

INCOME (LOSS) FROM CONTINUING OPERATIONS

(5,940)

(1,233)

(30,493)

40,439

Loss from discontinued operations

-

(6,029)

-

(3,819)

NET INCOME (LOSS)

(5,940)

(7,262)

(30,493)

36,620

(Income) loss from consolidated joint ventures attributable to noncontrolling interests

(54)

(438)

224

(1,369)

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership

1,180

3,389

4,238

(1,729)

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

(4,814)

(4,311)

(26,031)

33,522

Preferred dividends

(8,490)

(24,771)

(16,822)

(31,326)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$    (13,304)

$    (29,082)

$    (42,853)

$        2,196

INCOME PER SHARE – BASIC AND DILUTED:

Basic:

Income (loss) from continuing operations attributable to common shareholders

$        (0.20)

$        (0.40)

$        (0.64)

$          0.11

Loss from discontinued operations attributable to common shareholders

-

(0.09)

-

(0.07)

Net income (loss) attributable to common shareholders

$        (0.20)

$        (0.49)

$        (0.64)

$          0.04

Weighted average common shares outstanding – basic

67,639

59,482

67,396

58,157

Diluted:

Income (loss) from continuing operations attributable to common shareholders

$        (0.20)

$        (0.40)

$        (0.64)

$          0.11

Loss from discontinued operations attributable to common shareholders

-

(0.09)

-

(0.07)

Net income (loss) attributable to common shareholders

$        (0.20)

$        (0.49)

$        (0.64)

$          0.04

Weighted average common shares outstanding – diluted

67,639

59,482

67,396

58,157

Dividends declared per common share:

$          0.11

$          0.10

$          0.22

$          0.20

Amounts attributable to common shareholders:

Income (loss) from continuing operations, net of tax

$      (4,814)

$           969

$    (26,031)

$      37,768

Loss from discontinued operations, net of tax

-

(5,280)

-

(4,246)

Preferred dividends

(8,490)

(24,771)

(16,822)

(31,326)

Net income (income) attributable to common shareholders

$    (13,304)

$    (29,082)

$    (42,853)

$        2,196

 

 

 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

 RECONCILIATION OF NET INCOME (LOSS) TO EBITDA 

 (in thousands) 

 (Unaudited) 

 Three Months Ended 

 Six Months Ended 

 June 30, 

 June 30, 

2012

2011

2012

2011

 Net income (loss) 

$      (5,940)

$      (7,262)

$    (30,493)

$      36,620

 (Income) loss from consolidated joint ventures attributable to noncontrolling interests 

(54)

(438)

224

(1,369)

 Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 

1,180

3,389

4,238

(1,729)

 Net income (loss) attributable to the Company 

(4,814)

(4,311)

(26,031)

33,522

 Interest income 

(22)

(23)

(54)

(59)

 Interest expense and amortization of loan costs 

36,239

34,346

71,090

69,162

 Depreciation and amortization  

33,434

32,402

67,017

64,563

 Impairment charges 

4,025

1,921

3,933

1,581

 Income tax expense 

1,366

285

2,245

1,414

 Net income (loss) attributable to redeemable noncontrolling interests in operating partnership 

(1,180)

(3,389)

(4,238)

1,729

 Equity in (earnings) loss of unconsolidated joint ventures 

(23)

2,301

10,281

(25,824)

 Company's portion of EBITDA of unconsolidated joint ventures 

25,116

21,864

39,680

67,909

 EBITDA 

94,141

85,396

163,923

213,997

 Amortization of unfavorable management contract liabilities 

(565)

(565)

(1,129)

(1,129)

 Gain on sale/disposition of properties 

-

(158)

-

(2,961)

 Non-cash gain on insurance settlements 

-

(1,157)

-

(1,157)

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

-

-

-

948

 Other income (1) 

(6,703)

(18,157)

(14,317)

(66,160)

 Transaction acquisition costs 

-

406

-

(818)

 Legal costs related to litigation settlements (2) 

1,467

1,375

1,707

6,875

 Unrealized gain on investments 

(1,628)

(39)

(3,413)

(39)

 Unrealized loss on derivatives 

7,458

17,733

17,399

34,550

 Equity-based compensation 

4,223

3,546

9,369

5,360

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

49

1,217

144

(39,794)

 Adjusted EBITDA 

$      98,442

$      89,597

$    173,683

$    149,672

(1)

Other income primarily consisting of income from interest rate derivatives in both periods, net realized loss on investments in securities and other in 2012, and a $30 million litigation settlement in 2011 are excluded from Adjusted EBITDA.  

(2)

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

 

 

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

 (in thousands, except per share amounts) 

 (Unaudited) 

 Three Months Ended 

 Six Months Ended 

 June 30, 

 June 30, 

2012

2011

2012

2011

 Net income (loss)   

$      (5,940)

$      (7,262)

$    (30,493)

$      36,620

 (Income) loss from consolidated joint ventures attributable to noncontrolling interests 

(54)

(438)

224

(1,369)

 Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 

1,180

3,389

4,238

(1,729)

 Preferred dividends 

(8,490)

(24,771)

(16,822)

(31,326)

 Net income (loss) attributable to common shareholders 

(13,304)

(29,082)

(42,853)

2,196

 Depreciation and amortization on real estate 

33,374

32,340

66,892

64,439

 Impairment charges 

4,025

1,921

3,933

1,581

 Gain on sale/dispoistion of properties 

-

(158)

-

(2,961)

 Non-cash gain on insurance settlements 

-

(1,157)

-

(1,157)

 Net income (loss) attributable to redeemable noncontrolling interests in operating partnership 

(1,180)

(3,389)

(4,238)

1,729

 Equity in (earnings) loss of unconsolidated joint ventures 

(23)

2,301

10,281

(25,824)

 Company's portion of FFO of unconsolidated joint ventures 

12,955

9,974

15,410

(999)

 FFO available to common shareholders 

35,847

12,750

49,425

39,004

 Dividends on convertible preferred stock 

-

350

-

1,374

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

-

-

-

948

 Transaction acquisition costs 

-

406

-

(818)

 Legal costs related to litigation settlements (2) 

1,467

1,375

1,707

6,875

 Other income (1) 

1,303

-

1,681

(30,000)

 Unrealized gain on investments 

(1,628)

(39)

(3,413)

(39)

 Unrealized loss on derivatives 

7,458

17,733

17,399

34,550

 Non-cash dividends on Series B-1 preferred stock 

-

17,363

-

17,363

 Equity-based compensation adjustment related to modified employment terms 

(511)

-

480

-

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

49

1,217

144

14,278

 Adjusted FFO available to common shareholders 

$      43,985

$      51,155

$      67,423

$      83,535

 Adjusted FFO per diluted share available to common shareholders 

$          0.52

$          0.65

$          0.80

$          1.06

 Weighted average diluted shares 

85,317

78,435

84,791

78,828

(1)

Other income in 2012 primarily represents net realized loss on investments in securities and other which is excluded from Adjusted FFO.  Other income in 2011 represents a gain from a litigation settlement which is excluded from Adjusted FFO. 

(2)

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

 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

LEGAGY PORTFOLIO ONLY

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

JUNE 30, 2012

(dollars in thousands)

(Unaudited)

Indebtedness

Maturity

Interest Rate

 Fixed-Rate Debt 

 Floating-Rate Debt 

 Total Debt 

TTM Hotel EBITDA 

 Aareal - 2 hotels 

August 2013

LIBOR + 2.75%

$                 -

$           143,667

$                143,667

$               23,418

 BoA MIP - 5 hotels 

March 2014

LIBOR + 4.50%

-

176,400

(1)

176,400

18,242

 JPM Floater - 9 hotels 

May 2014

LIBOR + 6.50%

-

135,000

135,000

15,469

 GEMSA Manchester - 1 hotel 

May 2014

8.32%

5,381

-

5,381

585

 Senior credit facility - Various 

September 2014

LIBOR + 2.75% to 3.5%

-

-

-

 N/A 

 Met Life El Con - 1 hotel 

December 2014

Greater of 5.5% or LIBOR + 3.5%

-

19,740

19,740

(1,362)

 UBS 1 - 8 hotels 

December 2014

5.75%

105,787

-

105,787

12,443

 Merrill 1 - 10 hotels 

July 2015

5.22%

154,172

-

154,172

18,508

 UBS 2 - 8 hotels 

December 2015

5.70%

97,860

-

97,860

13,548

 Prudential/Wheelock - 5 hotels 

December 2015

12.72%

152,929

-

152,929

23,727

 Merrill 2 - 5 hotels 

February 2016

5.53%

111,310

-

111,310

16,204

 Merrill 3 - 5 hotels 

February 2016

5.53%

92,310

-

92,310

14,933

 Merrill 7 - 5 hotels 

February 2016

5.53%

79,961

-

79,961

12,490

 Wachovia Philly CY - 1 hotel 

April 2017

5.91%

34,935

-

34,935

9,092

 Wachovia 3 - 2 hotels 

April 2017

5.95%

128,014

-

128,014

13,281

 Wachovia 7 - 3 hotels 

April 2017

5.95%

260,497

-

260,497

22,491

 Wachovia 1 - 5 hotels 

April 2017

5.95%

115,386

-

115,386

9,942

 Wachovia 5 - 5 hotels 

April 2017

5.95%

103,714

-

103,714

8,516

 Wachovia 6 - 5 hotels 

April 2017

5.95%

157,813

-

157,813

14,624

 Wachovia 2 - 7 hotels 

April 2017

5.95%

126,232

-

126,232

10,776

 TIF Philly CY - 1 hotel 

June 2018

12.85%

8,098

-

8,098

 N/A 

 GACC Gateway - 1 hotel 

November 2020

6.26%

103,170

-

103,170

16,215

 Zion Jacksonville RI - 1 hotel 

April 2034

Greater of 6% or Prime + 1%

-

6,568

6,568

1,015

 Unencumbered hotels 

-

-

-

2,864

 Total 

$    1,837,569

$           481,375

$             2,318,943

$            277,021

 Percentage 

79.2%

20.8%

100.0%

 Weighted average interest rate 

6.43%

4.83%

6.10%

 Total indebtedness with effect of interest rate swaps 

$    1,837,569

$           481,375

$             2,318,943

 Percentage with the effect of interest rate swaps 

79.2%

20.8%

100.0%

 Weighted average interest rate with the effect of interest rate swaps 

4.71%

(2)

4.83%

(2)

4.74%

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) These rates are calculated assuming the LIBOR rate stays at the March 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

JUNE 30, 2012

(dollars in thousands)

(Unaudited)

Indebtedness

Maturity

Interest Rate

 Fixed-Rate Debt 

 Floating-Rate Debt 

 Total Debt 

TTM Hotel  EBITDA 

 CIGNA Boston Back Bay - 1 hotel 

January 2013

5.96%

$         45,634

$                    -

$                  45,634

$                 8,720

 CIGNA Westin Princeton - 1 hotel 

February 2013

5.97%

23,185

23,185

3,403

 CIGNA Nashville Renaissance - 1 hotel 

April 2013

6.11%

32,563

32,563

7,880

 Wells Senior - 25 hotels 

March 2014

LIBOR + 2.75%

-

380,222

(1)

380,222

59,202

 Mezz 1 - 28 hotels 

March 2014

Greater of 7.00% or LIBOR + 6.00%

-

103,642

(1)

103,642

79,205

 Mezz 2 - 28 hotels 

March 2014

Greater of 8.00% or LIBOR + 7.00%

-

98,665

(1)

98,665

79,205

 Mezz 3 - 28 hotels 

March 2014

Greater of 10.50% or LIBOR + 9.50%

-

84,570

(1)

84,570

79,205

 Mezz 4 - 28 hotels 

March 2014

LIBOR + 2.00%

13,218

(1)

13,218

79,205

 Total (Ashford's 71.74% share only) 

$       101,382

$           680,316

$                781,698

$              79,205

 Percentage 

13.0%

87.0%

100.0%

 Weighted average interest rate 

6.01%

5.25%

5.35%

 Percentage with the effect of interest rate swaps 

13.0%

87.0%

100.0%

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

$    1,938,951

$        1,161,691

$             3,100,641

$            356,226

 Percentage with the effect of interest rate swaps 

62.5%

37.5%

100.0%

 Weighted average interest rate with the effect of interest rate swaps 

4.78%

5.08%

4.89%

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

 

 

 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

 LEGAGY PORTFOLIO ONLY 

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 JUNE 30, 2012 

 (in thousands) 

 (Unaudited) 

2012

2013

2014

2015

2016

 Thereafter 

 Total 

 Aareal - 2 hotels 

$              -

$          140,167

$               -

$              -

$              -

$                  -

140,167

 GEMSA Manchester - 1 hotel 

-

-

5,004

-

-

-

5,004

 Senior credit facility - Various 

-

-

-

-

-

-

-

 Met Life El Con - 1 hotel 

-

-

19,740

-

-

-

19,740

 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

 Prudential/Wheelock - 5 hotels 

-

-

-

146,415

-

-

146,415

 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

 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

$      124,863

$    556,417

$    259,200

$     1,095,068

$     2,175,715

 Scheduled amortization payments remaining 

18,510

31,030

30,978

28,230

16,723

17,757

143,228

 Total indebtedness of continuing operations 

$      18,510

$          171,197

$      155,841

$    584,647

$    275,923

$     1,112,825

$     2,318,943

 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 

 JUNE 30, 2012 

 (in thousands) 

 (Unaudited) 

2012

2013

2014

2015

2016

 Thereafter 

 Total 

 CIGNA Boston Back Bay - 1 hotel 

$              -

$            45,215

$               -

$              -

$              -

$                  -

$          45,215

 CIGNA Westin Princeton - 1 hotel 

-

22,939

-

-

-

-

22,939

 CIGNA Nashville Renaissance - 1 hotel 

-

31,774

-

-

-

-

31,774

 Wells Senior - 25 hotels 

-

-

-

-

380,222

-

380,222

 Mezz 1 - 28 hotels 

-

-

-

-

103,642

-

103,642

 Mezz 2 - 28 hotels 

-

-

-

-

98,665

-

98,665

 Mezz 3 - 28 hotels 

-

-

-

-

84,570

-

84,570

 Mezz 4 - 28 hotels 

-

-

-

-

13,218

-

13,218

 Principal due in future periods 

$              -

$            99,928

$               -

$              -

$    680,316

$                  -

$        780,244

 Scheduled amortization payments remaining 

992

462

-

-

-

-

1,454

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

$           992

$          100,390

$               -