Ashford Prime Reports Third Quarter 2015 Results

Announced Decision to Explore Strategic Alternatives to Increase Shareholder Value

04 Nov, 2015, 16:15 ET from Ashford Hospitality Prime, Inc.

DALLAS, Nov. 4, 2015 /PRNewswire/ -- Ashford Hospitality Prime, Inc. (NYSE: AHP) ("Ashford Prime" or the "Company") today reported the following results and performance measures for the third quarter ended September 30, 2015.  The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) are pro forma assuming each of the hotel properties in the Company's hotel portfolio as of September 30, 2015 were owned as of the beginning of each of the periods presented.  Unless otherwise stated, all reported results compare the third quarter ended September 30, 2015, with the third quarter ended September 30, 2014 (see discussion below).  The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

OVERVIEW

  • Focuses on luxury hotels in resort and gateway markets
  • Targets conservative leverage levels of Net Debt/EBITDA of 5.0x or less
  • Above market alignment of management and shareholders
  • Recently doubled dividend to yield approximately 2.7%

FINANCIAL AND OPERATING HIGHLIGHTS

  • RevPAR for all hotels increased 2.7% to $204.34 during the third quarter, driven by a 3.7% increase in ADR and a 1.0% decrease in occupancy
  • On July 9, 2015, the Company announced it had completed the acquisition of the leasehold interest in the award-winning 62-room Bardessono Hotel and Spa in Yountville, CA for total consideration of $85.0 million. Ashford Inc. provided $2.0 million in key money consideration for the acquisition
  • On August 28, 2015, the Company announced that the Independent Directors of the Board made the decision to explore a full range of strategic alternatives, including a possible sale of the Company
  • Capex invested in the quarter was $5.2 million

CAPITAL STRUCTURE

At September 30, 2015, the Company had total assets of $1.3 billion in continuing operations.  As of September 30, 2015, the Company had $760 million of mortgage debt in continuing operations of which $49 million related to its joint venture partner's share of debt on the Capital Hilton and Hilton La Jolla Torrey Pines.  Ashford Prime's total combined debt had a blended average interest rate of 4.54%.

On July 9, 2015, the Company announced it had closed on the acquisition of the leasehold interest in the award-winning 62-room Bardessono Hotel and Spa in Yountville, CA for a total consideration of $85.0 million.  Ashford Inc. provided $2.0 million in key money consideration for the acquisition. 

PORTFOLIO REVPAR

As of September 30, 2015, the Ashford Prime Portfolio consisted of direct hotel investments with eleven properties classified in continuing operations.  During the third quarter of 2015, nine of the Company's hotels included in continuing operations were not under renovation.  The Company believes reporting its operating metrics for the hotels in continuing operations on a pro forma total basis (all eleven hotels) and pro forma not under renovation basis (nine hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its portfolio.  Details of each category are provided in the tables attached to this release.

  • Pro forma RevPAR increased 2.7% to $204.34 for all hotels on a 3.7% increase in ADR and a 1.0% decrease in occupancy
  • Pro forma RevPAR increased 3.0% to $216.78 for hotels not under renovation on a 2.8% increase in ADR and a 0.2% increase in occupancy

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

The Company 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, to help investors better understand this seasonality, the Company provides quarterly detail on its Hotel EBITDA and Hotel EBITDA Margin for the current and certain prior-year periods based upon the number of hotels in the Company's portfolio as of the end of the current period.  As the Company's portfolio mix changes from time to time so will the seasonality for Pro forma Hotel EBITDA and Pro forma Hotel EBITDA Margin.  The details of the quarterly calculations for the previous four quarters for the eleven hotels included in continuing operations are provided in the table attached to this release.

COMMON STOCK DIVIDEND

On September 15, 2015, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per diluted share for the Company's common stock for the third quarter ending September 30, 2015, payable on October 15, 2015, to shareholders of record as of September 30, 2015.  This reflects the Company's revised cash dividend policy announced on May 13, 2015, when Ashford Prime's Board of Directors increased its quarterly cash dividend from $0.05 to $0.10 per diluted share for the Company's common stock, representing a 100% increase.

"Difficult year-over-year comparisons given holiday shifts in the third quarter had a pronounced impact on RevPAR performance due to the relatively small size of the Ashford Prime portfolio," commented Monty J. Bennett, Ashford Prime's Chairman and Chief Executive Officer.  "We anticipate a rebound in performance in the fourth quarter and into 2016 as industry trends remain positive and we remain confident in our strategic plan of focusing on high quality luxury assets in resort and gateway markets.  Concurrently, the Independent Directors of our board are exploring a full range of strategic alternatives as we do not believe Prime's current share price accurately reflects the Company's intrinsic value."

The Independent Directors are in the beginning stage of the strategic review, and there can be no assurance that the Company will enter into any transaction at this time or in the future.  The Company does not intend to make any further public comment regarding the review until it has been completed. 

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Prime, Inc. will conduct a conference call on Thursday, November 5, 2015, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (785) 424-1666.  A replay of the conference call will be available through Thursday, November 12, 2015, by dialing (719) 457-0820 and entering the confirmation number, 153611. 

The Company will also provide an online simulcast and rebroadcast of its third quarter 2015 earnings release conference call.  The live broadcast of Ashford Hospitality Prime's quarterly conference call will be available online at the Company's web site, www.ahpreit.com on Thursday, November 5, 2015, 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 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 Hospitality Prime is a real estate investment trust (REIT) focused on investing in luxury hotels located in resort and gateway markets.

Follow Chairman and CEO Monty Bennett on Twitter at www.twitter.com/MBennettAshford or @MBennettAshford.

Ashford has created an Ashford App for the hospitality REIT investor community.  The Ashford App is available for free download at Apple's App Store and the Google Play Store by searching "Ashford."

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.  Forward-looking statements in this press release include, among others, statements about the implied share price for the Company's common stock.  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 statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Prime'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; our ability to successfully complete and integrate acquisitions, and manage our planned growth, and the degree and nature of our competition.  These and other risk factors are more fully discussed in Ashford Prime'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.  Hotel EBITDA flow-through is the change in Hotel EBITDA divided by the change in total revenues.  Hotel EBITDA Margin is Hotel EBITDA divided by total 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 PRIME, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(unaudited)

September 30,

December 31,

2015

2014

ASSETS

Cash and cash equivalents

$                     85,708

$                 171,439

Investments in hotel properties, net

1,034,073

990,303

Restricted cash

32,007

29,646

Accounts receivable, net of allowance of $71 and $47, respectively

13,714

12,382

Inventories

809

696

Note receivable

8,098

8,098

Deferred costs, net

3,867

4,707

Prepaid expenses

3,684

2,422

Investment in AIM REHE Fund

47,073

-

Investment in Ashford Inc., at fair value

12,365

-

Derivative assets

1,795

35

Other assets

2,415

1,193

Intangible asset, net

23,240

2,542

Due from Ashford Trust OP, net

110

-

Due from related party, net

535

541

Due from third-party hotel managers

8,599

5,504

Total assets

$                1,278,092

$              1,229,508

LIABILITIES AND EQUITY

Liabilities:

Indebtedness

$                   760,344

$                 765,230

Accounts payable and accrued expenses

37,482

29,273

Dividends payable

3,320

1,425

Unfavorable management contract liabilities

198

316

Due to Ashford Trust OP, net

-

896

Due to Ashford Inc.

2,441

2,546

Due to third-party hotel managers

1,146

954

Intangible liability, net

3,696

3,739

Other liabilities

1,146

1,131

Total liabilities

809,773

805,510

5.5% Series A cumulative convertible preferred stock, $0.01 par value, 2,600,000 shares issued

and outstanding at September 30, 2015

62,823

-

Redeemable noncontrolling interests in operating partnership

59,484

149,555

Equity:

Common stock, $0.01 par value, 200,000,000 shares authorized, 29,736,757 and 25,393,433

    shares issued and 28,471,004 and 24,464,163 shares outstanding at September 30,     2015 and December 31, 2014, respectively

297

254

Additional paid-in capital

455,688

391,184

Accumulated deficit

(83,564)

(96,404)

Treasury stock, at cost, 1,265,753 and 929,270 shares at September 30, 2015 and December 31, 2014, respectively

(21,826)

(16,130)

        Total stockholders' equity of the Company

350,595

278,904

Noncontrolling interest in consolidated entities

(4,583)

(4,461)

Total equity

346,012

274,443

        Total liabilities and equity

$                1,278,092

$              1,229,508

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

2015

2014

REVENUE

Rooms

$                 70,584

$                 65,253

$               192,868

$               171,484

Food and beverage

16,346

15,886

58,368

49,488

Other

3,795

3,615

10,038

9,494

Total hotel revenue

90,725

84,754

261,274

230,466

Other

34

30

111

91

Total revenue

90,759

84,784

261,385

230,557

EXPENSES

Hotel operating expenses

Rooms

14,804

14,039

41,895

38,564

Food and beverage

12,318

11,118

38,926

32,377

Other expenses

25,508

23,079

69,405

60,078

Management fees 

3,709

3,497

10,564

9,408

Total hotel operating expenses

56,339

51,733

160,790

140,427

Property taxes, insurance and other

4,585

4,076

13,781

12,127

Depreciation and amortization

11,308

10,657

32,384

30,136

Gain/loss

-

-

-

-

Gain on insurance settlement

-

-

-

-

Advisory services fee:

Base advisory fee

2,144

2,249

6,513

6,458

Advisory services fee – other services

435

437

1,417

1,257

Non-cash stock/unit-based compensation

935

431

1,846

1,541

Transaction costs

255

45

255

1,871

Corporate, general and administrative:

Non-cash stock/unit-based compensation

-

-

254

246

Other general and administrative

1,502

458

3,556

2,207

Total operating expenses

77,503

70,086

220,796

196,270

OPERATING INCOME

13,256

14,698

40,589

34,287

Equity in loss of unconsolidated entity

(3,399)

-

(4,219)

-

Interest income

12

10

21

20

Other income (expense)

(59)

-

1,233

-

Interest expense

(8,706)

(9,657)

(26,225)

(27,831)

Amortization of loan costs

(642)

(480)

(1,835)

(1,328)

Write-off of loan costs and exit fees

-

-

(54)

-

Unrealized loss on investment 

(5,621)

-

(5,621)

-

Unrealized income (loss) on derivatives

(2,061)

3

(2,101)

(63)

INCOME (LOSS) BEFORE INCOME TAXES

(7,220)

4,574

1,788

5,085

Income tax expense 

(62)

(185)

(371)

(622)

NET INCOME (LOSS)

(7,282)

4,389

1,417

4,463

(Income) loss from consolidated entities attributable to noncontrolling interest

(1,090)

154

(1,068)

741

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

1,532

(1,171)

(671)

(1,213)

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

(6,840)

3,372

(322)

3,991

Preferred dividends

(895)

-

(1,093)

-

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$                 (7,735)

$                   3,372

$                 (1,415)

$                   3,991

INCOME (LOSS) PER SHARE – BASIC AND DILUTED

Basic:

Net income (loss) attributable to common stockholders

$                   (0.29)

$                     0.13

$                   (0.06)

$                     0.16

Weighted average common shares outstanding – basic

27,162

25,298

25,109

24,310

Diluted:

Net income (loss) attributable to common stockholders

$                   (0.29)

$                     0.13

$                   (0.06)

$                     0.16

Weighted average common shares outstanding – diluted

27,162

34,429

25,109

33,315

Dividends declared per common share:

$                     0.10

$                     0.05

$                     0.25

$                     0.15

Amounts attributable to common stockholders:

Net income (loss) attributable to the Company

$                 (6,840)

$                   3,372

$                    (322)

$                   3,991

Preferred dividends

(895)

-

(1,093)

-

Net income (loss) attributable to common stockholders

$                 (7,735)

$                   3,372

$                 (1,415)

$                   3,991

 

 

 ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES 

 RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA 

 (in thousands) 

 (unaudited) 

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

2015

2014

 Net income (loss) 

$                 (7,282)

$                   4,389

$                   1,417

$                   4,463

 (Income) loss from consolidated entities attributable to noncontrolling interest 

(1,090)

154

(1,068)

741

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

1,532

(1,171)

(671)

(1,213)

 Net income (loss) attributable to the Company 

(6,840)

3,372

(322)

3,991

 Interest income 

(12)

(9)

(21)

(19)

 Interest expense and amortization of loan costs 

8,965

9,656

26,924

27,736

 Depreciation and amortization  

10,594

9,845

30,222

27,715

 Income tax expense 

62

185

371

622

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

(1,532)

1,171

671

1,213

 Company's portion of EBITDA of Ashford Inc. 

126

-

126

-

 EBITDA available to common stockholders and OP unitholders 

11,363

24,220

57,971

61,258

 Amortization of unfavorable management contract liabilities 

(40)

(40)

(119)

(119)

 Write-off of loan costs and exit fees 

-

-

54

-

 Transaction costs 

255

45

255

1,871

 Unrealized loss on investment 

5,621

-

5,621

-

 Unrealized (income) loss on derivatives 

2,061

(3)

2,097

63

 Other (income) expense (1)

59

-

(1,233)

-

 Compensation adjustment related to modified employment terms 

-

-

-

573

 Non-cash, non-employee stock/unit-based compensation 

935

435

2,101

1,218

 Strategic alternatives and other deal costs 

600

-

912

-

 Company's portion of adjustments to EBITDA of Ashford Inc. 

99

-

99

-

 Company's portion of unrealized loss of AIM REHE Fund 

3,399

-

4,219

-

 Adjusted EBITDA available to common stockholders and OP unitholders 

$                 24,352

$                 24,657

$                 71,977

$                 64,864

(1)

 Other (income) expense, primarily consisting of net realized gain/loss on marketable securities is excluded from Adjusted EBITDA.   

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

 (in thousands, except per share amounts) 

 (unaudited) 

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

2015

2014

 Net income (loss) 

$                 (7,282)

$                   4,389

$                   1,417

$                   4,463

 (Income) loss from consolidated entities attributable to noncontrolling interest 

(1,090)

154

(1,068)

741

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

1,532

(1,171)

(671)

(1,213)

 Preferred dividends 

(895)

-

(1,093)

-

 Net income (loss) attributable to common stockholders 

(7,735)

3,372

(1,415)

3,991

 Depreciation and amortization on real estate 

10,594

9,845

30,222

27,715

 Company's portion of FFO of Ashford Inc. 

69

-

69

-

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

(1,532)

1,171

671

1,213

 FFO available to common stockholders and OP unitholders 

1,396

14,388

29,547

32,919

Preferred dividends

895

-

1,093

-

Unrealized loss on investment

5,621

-

5,621

-

Unrealized (income) loss on derivatives

2,061

(3)

2,097

63

Other (income) expense (1)

59

-

(1,233)

-

Transaction costs

255

45

255

1,871

Strategic alternatives and other deal costs

600

-

912

-

Compensation adjustment related to modified employment terms

-

-

-

573

Write-off of loan costs and exit fees

-

-

54

-

Company's portion of adjustments to FFO of Ashford Inc.

(90)

-

(90)

-

Company's portion of unrealized loss of AIM REHE Fund

3,399

-

4,219

-

 Adjusted FFO available to common stockholders and OP unitholders 

$                 14,196

$                 14,430

$                 42,475

$                 35,426

 Adjusted FFO per diluted share available to common stockholders and OP unitholders 

$                     0.39

$                     0.42

$                     1.25

$                     1.06

 Weighted average diluted shares 

36,232

34,475

34,046

33,373

(1)

Other (income) expense, primarily consisting of net realized gain/loss on marketable securities is excluded from Adjusted FFO.  

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

SUMMARY OF INDEBTEDNESS

SEPTEMBER 30, 2015

(dollars in thousands)

(unaudited)

 Proforma 

 Proforma 

 Fixed-Rate 

 Floating-Rate 

 Total 

 TTM Hotel 

 TTM EBITDA 

Indebtedness

Maturity

Interest Rate

 Debt 

 Debt 

 Debt 

 EBITDA 

 Debt Yield 

 GACC Sofitel - 1 hotel 

March 2016

LIBOR + 2.30%

$                      -

$              80,000

(3)

$              80,000

$                9,166

11.5%

 Senior credit facility - Various 

November 2016

LIBOR + 2.25% to 3.75%

-

-

(1)

-

N/A

N/A

 Credit Agricole Pier House - 1 hotel 

March 2017

LIBOR + 2.25% to 2.50%

-

70,000

(2)

70,000

9,578

13.7%

 Wachovia Philly CY - 1 hotel 

April 2017

5.91%

33,505

-

33,505

12,232

36.5%

 Wachovia 3 - 2 hotels 

April 2017

5.95%

122,823

-

122,823

20,298

16.5%

 Wachovia 7 - 3 hotels 

April 2017

5.95%

249,934

-

249,934

30,988

12.4%

 TIF Philly CY - 1 hotel 

June 2018

12.85%

8,098

-

8,098

N/A

N/A

 Aareal - 2 hotels 

November 2019

LIBOR + 2.65%

-

195,984

(4)

195,984

28,173

14.4%

 Unencumbered hotels 

-

-

-

3,672

N/A

 Total 

$            414,360

$            345,984

$            760,344

$            114,107

15.0%

 Percentage 

54.5%

45.5%

100.0%

 Weighted average interest rate 

6.08%

2.68%

4.54%

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

(1)This credit facility has two one-year extension options subject to advance notice, certain conditions and a 0.25% extension fee beginning November 2016.

(2)On March 7, 2015, we refinanced our $69.0 million mortgage loan due September 2015 with a $70.0 million loan due March 2017 with three one-year extension options.  The new loan provides for a floating interest rate of LIBOR + 2.25%.  

(3)This mortgage loan has three one-year extension options beginning March 2016, subject to satisfaction of certain conditions.

(4)This mortgage loan has two one-year extension options beginning November 2019, subject to satisfaction of certain conditions.  

 

 

 ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES 

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 SEPTEMBER 30, 2015 

 (in thousands) 

 (unaudited) 

2015

2016

2017

2018

2019

 Thereafter 

 Total 

 Senior credit facility - Various 

$               -

$               -

$               -

$               -

$               -

$               -

$               -

 Wachovia Philly CY - 1 hotel 

-

-

32,532

-

-

-

32,532

 Wachovia 3 - 2 hotels 

-

-

119,245

-

-

-

119,245

 Wachovia 7 - 3 hotels 

-

-

242,202

-

-

-

242,202

 TIF Philly CY - 1 hotel 

-

-

-

8,098

-

-

8,098

 GACC Sofitel - 1 hotel 

-

-

-

-

80,000

-

80,000

 Aareal - 2 hotels 

-

-

-

-

-

177,486

177,486

 Credit Agricole Pier House - 1 hotel 

-

-

-

-

-

70,000

70,000

 Principal due in future periods 

$               -

$               -

$     393,979

$         8,098

$       80,000

$     247,486

$     729,563

 Scheduled amortization payments remaining 

2,322

8,646

7,526

2,939

3,120

6,228

30,781

 Total indebtedness 

$         2,322

$         8,646

$     401,505

$       11,037

$       83,120

$     253,714

$     760,344

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

KEY PERFORMANCE INDICATORS - PRO FORMA

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

% Variance

2015

2014

% Variance

ALL HOTELS:

Rooms revenue (in thousands)

$         70,909

$         69,013

2.75%

$      198,782

$      185,481

7.17%

RevPAR

$        204.34

$        199.03

2.67%

$       193.11

$       180.37

7.06%

Occupancy

85.75%

86.62%

-1.00%

83.54%

82.05%

1.82%

ADR

$        238.30

$        229.76

3.72%

$       231.15

$       219.82

5.15%

NOTES:

(1)

The above pro forma table assumes the eleven hotel properties owned and included in the Company's operations at September 30, 2015 were owned as of the beginning of each of the periods presented.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

% Variance

2015

2014

% Variance

ALL HOTELS

NOT UNDER RENOVATION:

Rooms revenue (in thousands)

$         61,527

$         59,679

3.10%

$      169,261

$      158,009

7.12%

RevPAR

$        216.78

$        210.48

3.00%

$       201.07

$       187.93

6.99%

Occupancy

86.85%

86.72%

0.15%

83.66%

81.81%

2.27%

ADR

$        249.60

$        242.70

2.84%

$       240.34

$       229.73

4.62%

NOTES:

(1)

The above pro forma table assumes the nine hotel properties included in the company's operations at September 30, 2015, but not under renovation for the three and nine months ended September 30, were owned as of the beginning of each of the periods presented.

(2)

Excluded Hotels Under Renovation: 

Hilton La Jolla Torrey Pines, Renaissance Tampa

 

 

 ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES 

 PRO FORMA HOTEL OPERATING PROFIT 

 (dollars in thousands) 

 (unaudited) 

 ALL HOTELS: 

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

 % Variance 

2015

2014

 % Variance 

 REVENUE 

 Rooms 

$         70,909

$       69,013

2.7%

$     198,782

$      185,481

7.2%

 Food and beverage 

16,419

17,846

-8.0%

60,398

57,141

5.7%

 Other 

3,829

3,991

-4.1%

10,901

10,996

-0.9%

 Total hotel revenue 

91,157

90,850

0.3%

270,081

253,618

6.5%

 EXPENSES 

 Rooms 

14,879

14,553

2.2%

43,297

41,144

5.2%

 Food and beverage 

12,387

12,773

-3.0%

40,758

39,050

4.4%

 Other direct 

1,189

1,295

-8.2%

3,587

3,723

-3.7%

 Indirect  

20,772

20,042

3.6%

62,431

58,443

6.8%

 Management fees, includes base and incentive fees 

7,136

6,870

3.9%

17,316

14,824

16.8%

 Total hotel operating expenses 

56,363

55,533

1.5%

167,389

157,184

6.5%

 Property taxes, insurance, and other 

4,582

4,203

9.0%

14,132

13,224

6.9%

 HOTEL OPERATING PROFIT (Hotel EBITDA) 

30,212

31,114

-2.9%

88,560

83,210

6.4%

 Hotel EBITDA Margin 

33.14%

34.25%

-1.11%

32.79%

32.81%

-0.02%

 Minority interest in earnings of consolidated joint ventures 

1,427

1,643

-13.1%

5,616

5,104

10.0%

 HOTEL OPERATING PROFIT (Hotel EBITDA), 

 excluding minority interest in joint ventures 

$       28,785

$     29,471

-2.3%

$     82,944

$      78,106

6.2%

 NOTES: 

(1)

The above pro forma table assumes the eleven hotel properties owned and included in the Company's operations at September 30, 2015 were owned as of the beginning of each of the periods presented.

 ALL HOTELS 

 NOT UNDER RENOVATION: 

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

 % Variance 

2015

2014

 % Variance 

 REVENUE 

 Rooms 

$         61,527

$       59,679

3.1%

$     169,261

$      158,009

7.1%

 Food and beverage 

12,936

13,583

-4.8%

44,752

42,769

4.6%

 Other 

2,971

3,030

-1.9%

8,376

8,354

0.3%

 Total hotel revenue 

77,434

76,292

1.5%

222,389

209,132

6.3%

 EXPENSES 

 Rooms 

12,974

12,596

3.0%

37,422

35,562

5.2%

 Food and beverage 

9,976

10,056

-0.8%

31,872

30,626

4.1%

 Other direct 

901

1,006

-10.4%

2,703

2,889

-6.4%

 Indirect  

16,364

15,845

3.3%

49,064

46,096

6.4%

 Management fees, includes base and incentive fees 

6,704

6,420

4.4%

15,802

13,439

17.6%

 Total hotel operating expenses 

46,919

45,923

2.2%

136,863

128,612

6.4%

 Property taxes, insurance, and other 

3,744

3,360

11.4%

11,584

10,489

10.4%

 HOTEL OPERATING PROFIT (Hotel EBITDA) 

26,771

27,009

-0.9%

73,942

70,031

5.6%

 Hotel EBITDA Margin 

34.57%

35.40%

-0.83%

33.25%

33.49%

-0.24%

 Minority interest in earnings of consolidated joint ventures 

716

817

-12.4%

5,616

2,909

93.1%

 HOTEL OPERATING PROFIT (Hotel EBITDA), 

 excluding minority interest in joint ventures 

$       26,055

$     26,192

-0.5%

$     68,326

$      67,122

1.8%

 NOTES: 

(1)

The above pro forma table assumes the nine hotel properties owned and included in the Company's operations at September 30, 2015 but not under renovation for the three months and nine months ended September 30, 2015, were owned as of the beginning of each of the periods presented.

(2)

Excluded Hotels Under Renovation:

Hilton La Jolla Torrey Pines, Renaissance Tampa

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

PRO FORMA HOTEL OPERATING PROFIT MARGIN

(unaudited)

THE FOLLOWING PRO FORMA EBITDA MARGIN TABLE REFLECTS THE ELEVEN HOTELS INCLUDED 

IN THE COMPANY'S OPERATIONS AS IF THESE HOTELS WERE OWNED AT THE BEGINNING

OF THE FIRST COMPARATIVE REPORTING PERIOD.

All Hotels

HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:

3rd Quarter 2015

33.14%

3rd Quarter 2014

34.25%

Variance

-1.11%

HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:

Rooms 

-0.30%

Food & Beverage and Other Departmental

0.59%

Administrative & General 

-0.14%

Sales & Marketing

-0.24%

Hospitality

0.00%

Repair & Maintenance 

-0.20%

Energy 

-0.09%

Franchise Fee 

0.00%

Management Fee 

-0.06%

Incentive Management Fee 

-0.21%

Insurance 

0.20%

Property Taxes

-0.63%

Other Taxes

0.03%

Leases/Other

-0.06%

Total

-1.11%

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

SELECTED PROFORMA FINANCIAL AND OPERATING INFORMATION BY PROPERTY

(in thousands, except operating information)

(unaudited)

THE FOLLOWING TABLE PRESENTS SELECTED FINANCIAL AND REPORTING INFORMATION BY PROPERTY FOR THE ELEVEN PROPERTIES INCLUDED IN THE ASHFORD PRIME PORTFOLIO. 

Three Months Ended

Nine Months Ended

TTM

September 30,

September 30,

September 30,

2015

2014

% Variance

2015

2014

% Variance

2015

CAPITAL HILTON WASHINGTON DC

Selected Financial Information:

Rooms Revenue

$         9,227

$         9,061

1.83%

$        29,306

$       28,090

4.33%

$                38,037

Total Revenue 

$       12,216

$       12,197

0.16%

$        41,983

$       39,555

6.14%

$                54,555

EBITDA

$         2,863

$         3,270

-12.45%

$        12,264

$       11,634

5.42%

$                15,812

EBITDA Margin

23.44%

26.81%

-3.37%

29.21%

29.41%

-0.20%

28.98%

Selected Operating Information:

RevPAR

$      182.34

$      180.05

1.27%

$       195.69

$      188.77

3.67%

$               190.11

Occupancy

91.54%

89.28%

2.54%

87.45%

85.84%

1.87%

85.97%

ADR

$      199.19

$      201.68

-1.23%

$       223.78

$      219.90

1.76%

$               221.13

LA JOLLA HILTON TORREY PINES

Selected Financial Information:

Rooms Revenue

$         6,557

$         6,408

2.33%

$        18,391

$       16,844

9.18%

$                23,122

Total Revenue 

$         9,560

$       10,114

-5.48%

$        31,275

$       28,426

10.02%

$                40,036

EBITDA

$         2,845

$         3,304

-13.89%

$        10,199

$         8,782

16.14%

$                12,360

EBITDA Margin

29.76%

32.67%

-2.91%

32.61%

30.89%

1.72%

30.87%

Selected Operating Information:

RevPAR

$      180.91

$      176.79

2.33%

$       170.98

$      156.60

9.18%

$               160.78

Occupancy

89.29%

90.97%

-1.85%

85.91%

84.44%

1.74%

85.60%

ADR

$      202.61

$      194.33

4.26%

$       199.02

$      185.44

7.32%

$               187.83

CHICAGO SOFITEL WATER TOWER

Selected Financial Information:

Rooms Revenue

$         8,174

$         8,449

-3.25%

$        20,375

$       20,224

0.75%

$                27,518

Total Revenue 

$       10,922

$       11,791

-7.37%

$        27,972

$       29,462

-5.06%

$                38,275

EBITDA

$         3,329

$         4,065

-18.11%

$          6,267

$         8,007

-21.73%

$                  9,166

EBITDA Margin

30.48%

34.48%

-4.00%

22.40%

27.18%

-4.77%

23.95%

Selected Operating Information:

RevPAR

$      214.10

$      221.28

-3.24%

$       179.84

$      178.51

0.75%

$               181.67

Occupancy

88.97%

90.91%

-2.13%

80.77%

81.01%

-0.30%

80.27%

ADR

$      240.64

$      243.41

-1.14%

$       222.66

$      220.36

1.04%

$               226.31

BARDESSONO INN

Selected Financial Information:

Rooms Revenue

$         3,890

$         3,839

1.33%

$          9,478

$         9,017

5.11%

$                12,586

Total Revenue 

$         5,376

$         5,274

1.93%

$        13,750

$       12,822

7.24%

$                18,140

EBITDA

$         1,729

$         1,746

-0.97%

$          2,652

$         2,939

-9.77%

$                  3,672

EBITDA Margin

32.16%

33.11%

-0.94%

19.29%

22.92%

-3.63%

20.24%

Selected Operating Information:

RevPAR

$      681.98

$      673.05

1.33%

$       560.00

$      532.71

5.12%

$               556.16

Occupancy

81.50%

87.76%

-7.13%

78.97%

79.69%

-0.90%

78.55%

ADR

$      836.74

$      766.89

9.11%

$       709.10

$      668.45

6.08%

$               708.07

KEY WEST PIER HOUSE RESORT

Selected Financial Information:

Rooms Revenue

$         3,652

$         3,361

8.66%

$        13,968

$       13,091

6.70%

$                18,171

Total Revenue 

$         4,717

$         4,313

9.37%

$        17,501

$       16,564

5.66%

$                22,866

EBITDA

$         1,505

$         1,288

16.85%

$          7,344

$         6,405

14.66%

$                  9,578

EBITDA Margin

31.91%

29.86%

2.04%

41.96%

38.67%

3.30%

41.89%

Selected Operating Information:

RevPAR

$      279.53

$      257.26

8.66%

$       360.33

$      337.69

6.70%

$               350.59

Occupancy

87.29%

81.64%

6.92%

90.50%

86.64%

4.46%

89.44%

ADR

$      320.25

$      315.13

1.63%

$       398.15

$      389.77

2.15%

$               392.00

PHILADELPHIA COURTYARD DOWNTOWN

Selected Financial Information:

Rooms Revenue

$         6,534

$         6,374

2.51%

$        19,730

$       17,642

11.84%

$                26,085

Total Revenue 

$         7,755

$         7,739

0.21%

$        23,734

$       21,707

9.34%

$                31,679

EBITDA

$         3,060

$         3,143

-2.64%

$          9,267

$         8,345

11.05%

$                12,232

EBITDA Margin

39.46%

40.61%

-1.15%

39.05%

38.44%

0.60%

38.61%

Selected Operating Information:

RevPAR

$      142.33

$      138.85

2.51%

$       144.83

$      129.58

11.77%

$               143.22

Occupancy

83.95%

85.29%

-1.57%

83.29%

79.23%

5.12%

82.43%

ADR

$      169.54

$      162.80

4.14%

$       173.90

$      163.54

6.33%

$               173.74

PLANO MARRIOTT LEGACY TOWN CENTER

Selected Financial Information:

Rooms Revenue

$         5,158

$         4,498

14.67%

$        15,451

$       13,818

11.82%

$                19,855

Total Revenue 

$         7,498

$         6,990

7.27%

$        24,175

$       21,793

10.93%

$                31,855

EBITDA

$         2,645

$         2,312

14.40%

$          8,520

$         7,321

16.38%

$                11,076

EBITDA Margin

35.28%

33.08%

2.20%

35.24%

33.59%

1.65%

34.77%

Selected Operating Information:

RevPAR

$      138.76

$      121.02

14.66%

$       140.10

$      125.29

11.82%

$               134.65

Occupancy

73.20%

68.59%

6.72%

72.42%

70.10%

3.31%

70.85%

ADR

$      189.56

$      176.44

7.44%

$       193.46

$      178.73

8.24%

$               190.04

SAN FRANCISCO COURTYARD DOWNTOWN

Selected Financial Information:

Rooms Revenue

$       10,216

$         9,764

4.63%

$        27,736

$       25,630

8.22%

$                36,091

Total Revenue 

$       11,702

$       11,209

4.40%

$        32,285

$       29,625

8.98%

$                42,045

EBITDA

$         3,979

$         3,843

3.54%

$        10,675

$         9,935

7.45%

$                13,807

EBITDA Margin

34.00%

34.28%

-0.28%

33.06%

33.54%

-0.47%

32.84%

Selected Operating Information:

RevPAR

$      274.17

$      262.05

4.63%

$       250.86

$      231.81

8.22%

$               244.14

Occupancy

93.74%

94.97%

-1.30%

92.73%

90.01%

3.03%

91.93%

ADR

$      292.48

$      275.92

6.00%

$       270.52

$      257.55

5.04%

$               265.58

SEATTLE COURTYARD DOWNTOWN

Selected Financial Information:

Rooms Revenue

$         5,041

$         4,881

3.28%

$        11,346

$       10,503

8.03%

$                14,036

Total Revenue 

$         5,662

$         5,480

3.32%

$        12,877

$       12,186

5.67%

$                16,065

EBITDA

$         2,341

$         2,160

8.38%

$          5,233

$         4,950

5.72%

$                  6,492

EBITDA Margin

41.35%

39.42%

1.93%

40.64%

40.62%

0.02%

40.41%

Selected Operating Information:

RevPAR

$      219.16

$      212.22

3.27%

$       166.24

$      153.90

8.02%

$               153.82

Occupancy

85.47%

88.72%

-3.67%

80.95%

82.40%

-1.76%

79.26%

ADR

$      256.43

$      239.20

7.21%

$       205.35

$      186.76

9.96%

$               194.06

SEATTLE MARRIOTT WATERFRONT

Selected Financial Information:

Rooms Revenue

$         9,636

$         9,452

1.95%

$        21,870

$       19,994

9.38%

$                26,920

Total Revenue 

$       11,586

$       11,300

2.53%

$        28,111

$       25,417

10.60%

$                35,196

EBITDA

$         5,321

$         5,182

2.68%

$        11,721

$       10,495

11.68%

$                14,242

EBITDA Margin

45.93%

45.86%

0.07%

41.70%

41.29%

0.40%

40.46%

Selected Operating Information:

RevPAR

$      292.57

$      286.99

1.94%

$       223.77

$      204.57

9.39%

$               206.01

Occupancy

90.57%

91.52%

-1.04%

84.15%

82.14%

2.44%

81.17%

ADR

$      323.03

$      313.57

3.01%

$       265.93

$      249.04

6.78%

$               253.81

TAMPA RENAISSANCE

Selected Financial Information:

Rooms Revenue

$         2,825

$         2,926

-3.45%

$        11,130

$       10,628

4.72%

$                14,412

Total Revenue 

$         4,163

$         4,443

-6.30%

$        16,416

$       16,060

2.22%

$                21,575

EBITDA

$            596

$            801

-25.59%

$          4,419

$         4,398

0.48%

$                  5,670

EBITDA Margin

14.32%

18.03%

-3.71%

26.92%

27.38%

-0.47%

26.28%

Selected Operating Information:

RevPAR

$      104.80

$      108.53

-3.44%

$       139.15

$      132.87

4.73%

$               134.76

Occupancy

69.34%

79.76%

-13.06%

79.11%

81.45%

-2.87%

78.63%

ADR

$      151.14

$      136.07

11.07%

$       175.88

$      163.13

7.82%

$               171.39

PRIME PROPERTIES TOTAL (11)

Selected Financial Information:

Rooms Revenue

$       70,909

$       69,013

2.75%

$      198,782

$     185,481

7.17%

$              256,833

Total Revenue 

$       91,157

$       90,850

0.34%

$      270,080

$     253,618

6.49%

$              352,286

EBITDA

$       30,212

$       31,114

-2.90%

$        88,560

$       83,210

6.43%

$              114,107

EBITDA Margin

33.14%

34.25%

-1.11%

32.79%

32.81%

-0.02%

32.39%

Selected Operating Information:

RevPAR

$      204.34

$      199.03

2.67%

$       193.11

$      180.37

7.06%

$               186.64

Occupancy

85.75%

86.62%

-1.00%

83.54%

82.05%

1.82%

82.39%

ADR

$      238.30

$      229.76

3.72%

$       231.15

$      219.82

5.15%

$               226.52

NOTES:

(1)

The above pro forma table assumes the eleven hotel properties owned and included in the Company's operations at September 30, 2015, were owned as of the beginning of each of the periods presented.

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

PRO FORMA HOTEL REVENUE & EBITDA FOR TRAILING TWELVE MONTHS

(dollars in thousands)

(unaudited)

THE FOLLOWING PRO FORMA SEASONALITY TABLE REFLECTS THE ELEVEN HOTELS INCLUDED IN

THE COMPANY'S OPERATIONS AS IF THESE HOTELS WERE OWNED AT THE BEGINNING

OF THE FIRST COMPARATIVE REPORTING PERIOD.

2015

2015

2015

2014

3rd Quarter

2nd Quarter

1st Quarter

4th Quarter

TTM

Total Hotel Revenue

$                     91,157

$                     97,921

$                81,003

$              82,205

$      352,286

Hotel EBITDA

$                     30,212

$                     35,132

$                23,216

$              25,547

$      114,107

Hotel EBITDA Margin

33.14%

35.88%

28.66%

31.08%

32.39%

EBITDA % of Total TTM

26.5%

30.8%

20.3%

22.4%

100.0%

JV Interests in EBITDA

$                       1,427

$                       2,513

$                  1,676

$                1,427

$          7,043

 

 

 ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES 

 TOTAL ENTERPRISE VALUE 

SEPTEMBER 30, 2015

 (in thousands, except share price) 

 (unaudited) 

 September 30, 

2015

End of quarter common shares outstanding

28,471

Partnership units outstanding (common stock equivalents)

4,376

Combined common shares and partnership units outstanding

32,847

Common stock price at quarter end

$                        14.03

Market capitalization at quarter end

$                    460,843

Series A convertible preferred stock

$                      65,000

Debt on balance sheet date

$                    760,344

Joint venture partners' share of consolidated debt

$                    (48,996)

Net working capital (see below)

$                  (157,806)

Total enterprise value (TEV)

$                1,079,385

Ashford Inc. Investment:

Common stock owned at end of quarter

195

Common stock price at quarter end

$                        63.45

Market value of Ashford Inc. investment

$                      12,365

Cash & cash equivalents

$                      82,442

Restricted cash

30,613

Accounts receivable, net

12,761

Prepaid expenses

3,602

Investment in AIM REHE, LP

47,073

Due from affiliates, net

(839)

Due from third-party hotel managers, net

7,682

Market value of Ashford Inc. investment

12,365

Total current assets

$                   195,699

Accounts payable, net & accrued expenses

$                     34,573

Dividends payable

3,320

Total current liabilities

$                     37,893

Net working capital*

$                   157,806

* Includes the Company's pro rata share of net working capital in joint ventures.

 

 

ASHFORD HOSPITALITY PRIME, INC. AND SUBSIDIARIES

Anticipated Capital Expenditures Calendar (a)

2015

Rooms

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Actual

Actual

Actual

Estimated

Courtyard Seattle

250

x

Renaissance Tampa

293

x

x

Hilton La Jolla Torrey Pines 

394

x

(a)Only hotels which have had or are expected to have significant capital expenditures that could result in displacement in 2015 are included in this table.

 

 

 

SOURCE Ashford Hospitality Prime, Inc.



RELATED LINKS

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