Ashford Trust Reports 2nd Quarter Results Announces Ashford Prime Metrics Adjusted EBITDA increased 11% for the Quarter

RevPAR Growth of 7.9% for the Ashford Prime Portfolio

Hotel EBITDA Flow-Through of 54% for All Hotels

DALLAS, July 31, 2013 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("the Company" or "Ashford Trust") today reported the following results and performance measures for the second quarter ended June 30, 2013.  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, 2013, with the second quarter ended June 30, 2012 (see discussion below).  The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL AND OPERATING HIGHLIGHTS

  • Board of Directors reiterates quarterly dividend policy of $0.12 per share post spin-off of Ashford Prime
  • RevPAR increased 4.5% for all hotels in the Highland Hospitality portfolio, driven by a 4.7% increase in ADR
  • RevPAR increased 4.1% for all Legacy hotels, including the eight Ashford Prime hotels, driven by a 3.8% increase in ADR and a 24 basis point increase in occupancy
  • RevPAR for all hotels, including Ashford Prime and the Highland Hospitality portfolio, increased 4.2% during the quarter
  • Adjusted EBITDA increased $10.4 million or 11% during the second quarter
  • Hotel EBITDA flow-through was 54% for all hotels, including the Highland Hospitality portfolio
  • Hotel operating profit for all hotels, including the Highland Hospitality portfolio, increased by $6.0 million, or 5.3%
  • Net loss attributable to common shareholders was $1.4 million, or $0.02 per diluted share, compared with net loss attributable to common shareholders of $13.3 million, or $0.20 per diluted share, in the prior-year quarter
  • Adjusted funds from operations (AFFO) was $0.55 per diluted share for the quarter as compared with $0.52 from the prior-year quarter; the prior year quarter included $8.0 million of income from derivatives
  • AFFO per share of $0.55 for the quarter is a record quarter for the Company when excluding income from derivatives in prior years
  • During the quarter, the Company completed its follow-on public offering of 11,000,000 shares of common stock at a price of $12.00 per share; subsequent to the end of the quarter, the underwriters exercised in part their option to purchase 1,250,782 shares of common stock at a gross price of $12.00 per share
  • At the end of the second quarter 2013, Ashford had cash, cash equivalents, and net marketable securities of $273 million

CAPITAL EXPENDITURES

  • Capex invested in the quarter for the Legacy portfolio was $24.8 million
  • Ashford's pro rata share of capex invested in the quarter for the Highland Hospitality portfolio was $11.4 million
  • Capex invested in the quarter for the Ashford Prime portfolio was $8.5 million

ASHFORD PRIME FINANCIAL AND OPERATING HIGHLIGHTS

  • During the quarter, Ashford's Board of Directors approved a plan to spin-off an 80% ownership interest in an eight-hotel portfolio to holders of Ashford Trust common stock in the form of a taxable special distribution expected to be comprised of common stock in Ashford Hospitality Prime, Inc. ("Ashford Prime")
  • RevPAR increased 7.9% to $164.35 for all hotels in the Ashford Prime portfolio on a 5.4% increase in ADR and a 198 basis point increase in occupancy
  • Hotel EBITDA Flow-Through for all Ashford Prime hotels was 70%
  • Hotel operating profit margin increased 193 basis points for all Ashford Prime hotels
  • Ashford Prime will have an initial cash balance of at least $140.0 million upon spin-off
  • Ashford Prime is expected to have an initial annual dividend policy of a minimum of $0.04 per Ashford Trust share equivalent
  • No debt maturities until 2017; all debt is non-recourse
  • Anticipate acquisition of the Pier House Resort & Spa during the fourth quarter of 2013

The Company announced on June 17, 2013, that its Board of Directors approved a plan to spin-off an 80% ownership interest in an 8-hotel portfolio, totaling 3,146 rooms (2,912 owned rooms), to holders of Ashford Trust common stock in the form of a taxable special distribution.  The distribution is expected to be comprised of common stock in Ashford Hospitality Prime, Inc. ("Ashford Prime"), a newly formed company to which Ashford Trust plans to transfer the portfolio interests.  This distribution will be made on a pro rata basis to holders of Ashford Trust common stock as of the distribution record date.  The distribution is expected to take place toward the end of the third quarter.  Ashford Prime is expected to qualify as a real estate investment trust ("REIT") for federal income tax purposes, and intends to file an application to list its shares of common stock on the New York Stock Exchange, under the symbol "AHP."  More information can be found in the information statement for Ashford Hospitality Prime that has been filed with the SEC.

For the eight-hotel portfolio that will comprise Ashford Prime, hotel operating profit (Hotel EBITDA) increased 11.7% to $24.0 million.  For all eight Ashford Prime hotels that will be initially included in continuing operations, Hotel EBITDA Margin increased 193 basis points to 37.8%.  RevPAR growth for the Pier House Resort & Spa was 2.7% for the quarter with Hotel EBITDA margin up 502 basis points.  Hotel EBITDA increased 17.6% for the Pier House Resort & Spa during the quarter.

CAPITAL STRUCTURE
At June 30, 2013, Ashford had total assets of $3.6 billion in continuing operations, and $4.5 billion overall including the Highland Hospitality portfolio which is not consolidated.  As of June 30, 2013, the Company had $2.4 billion of mortgage debt in continuing operations and $3.2 billion overall including the Highland Hospitality portfolio.  Ashford's total combined debt had a blended average interest rate of 5.3%, with a weighted average debt maturity of 3.4 years.

On April 10, 2013, Ashford announced that, along with its joint venture partner, it had entered into a series of agreements with the City of Nashville and Davidson County relating to the 673-room Renaissance Nashville Hotel. The hotel is part of Ashford's Highland Hospitality portfolio of which Ashford has a 71.74% ownership interest.  The Agreements include converting the joint venture's leasehold interest in the hotel, which was set to expire in 2087, to fee simple ownership, extending the current lease term of some adjacent facilities to 2112, and entering into a new, 30-year lease for 80,000 square feet of meeting space and pre-function space located at the existing Nashville Convention Center, which is adjacent to the hotel, all at no cost to the joint venture.  By entering into the lease for the additional meeting space, the hotel will now be able to offer over 110,000 square feet of self-contained meeting and pre-function space to accommodate larger groups.

On May 14, 2013, the Company announced it had completed the acquisition of the 142-room Pier House Resort and Spa in Key West, FL for total consideration of $90.0 million in cash ($634,000 per key).  The purchase price represents a trailing 12-month cap rate of 6.2% on net operating income and an EBITDA multiple of 14.3x.  In 2012, the hotel achieved RevPAR of $275, with occupancy of 83% and an Average Daily Rate of $333

Ashford closed its follow-on public offering of 12,250,782 shares of common stock at a gross price of $12.00 per share.  Ashford intends to use the net proceeds of the offering to effect the planned spin-off of Ashford Prime.  If the spin-off is not effected, Ashford intends to use the net proceeds of the offering for other general corporate purposes, including, without limitation, financing future hotel-related investments, capital expenditures, working capital and repayment of debt or other obligations. 

"We are excited about the planned spin-off of Ashford Prime and believe this transaction will help unlock the relative imbedded value in this portfolio of high RevPAR hotels located predominantly in domestic and international gateway markets.  Further, since the cash from our recently completed follow-on offering will be contributed to Ashford Prime, it has put us much closer to our target net debt plus preferred equity to EBITDA ratio of 5.0x or less for this platform than we were prior to the offering.  For example, if an annual base management fee of $5.0 million is used as an estimate, and if incremental annual G&A costs are $4.0 million, the trailing 12-month net debt plus preferred equity to EBITDA ratio as of the end of the second quarter for the Ashford Prime portfolio was around 6.5x," commented Monty J. Bennett, Ashford's Chairman and Chief Executive Officer.  "We are very optimistic regarding Ashford Prime's prospects given its high-quality portfolio, well-defined investment strategy, low leverage capital structure, and our management team's proven track record of delivering asset growth and superior shareholder returns.  Ultimately, we believe this spin-off will offer us an exceptional high-growth platform with enhanced access to the capital markets and will serve the best interests of our shareholders as both Ashford Prime and Ashford Trust continue to capitalize on the attractive lodging industry fundamentals we expect to persist for the next several years."  

PORTFOLIO REVPAR
As of June 30, 2013, the Company's Legacy portfolio consisted of direct hotel investments with 95 properties classified in continuing operations.  During the second quarter of 2013, 88 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 95 hotels) and proforma not under renovation basis (88 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 4.1% to $112.48 for all hotels in the Legacy portfolio on a 3.8% increase in ADR and a 24 basis point increase in occupancy
  • Proforma RevPAR increased 3.8% to $112.64 for hotels not under renovation in the Legacy portfolio on a 3.7% increase in ADR and a 8 basis point increase in occupancy
  • Proforma RevPAR increased 4.5% to $116.89 for all hotels in the Highland Hospitality portfolio on a 4.7% increase in ADR and a 18 basis point decrease in occupancy
  • Proforma RevPAR increased 6.0% to $111.46 for hotels not under renovation in the Highland Hospitality portfolio on a 5.3% increase in ADR and a 47 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 5.9% to $91.5 million.  For the 88 hotels that were not under renovation, Hotel EBITDA increased 5.6% to $84.6 million.  Hotel EBITDA Margin (expressed as a percentage of Total Hotel Revenue) increased 76 basis points to 35.6% for the 88 Legacy hotels not under renovation.  For all 95 Legacy hotels included in continuing operations, Hotel EBITDA Margin increased 82 basis points to 35.2%.  The Legacy hotels had significant insurance and property tax savings in the prior year quarter.  Excluding these increases, margin improvement would have been 162 basis points.

For the Company's 71.74% share of all hotels in the Highland Hospitality portfolio, Hotel operating profit (Hotel EBITDA) increased 3.4% to $28.3 million.  For the 23 hotels in the Highland Hospitality portfolio that were not under renovation, Hotel EBITDA increased 4.8% to $21.8 million.  Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 25 basis points to 31.9% for the 23 Highland Hospitality hotels not under renovation.  For all 28 Highland Hospitality hotels included in continuing operations, Hotel EBITDA margin increased 12 basis points to 33.4%.  The Highland Portfolio had significant insurance and property tax savings in the prior year quarter.  Excluding these increases, margin improvement would have been 101 basis points.

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 Hotel EBITDA and Hotel EBITDA Margin for the current and certain prior-year periods based upon the number of hotels in the Legacy 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, the eight-hotel Ashford Prime portfolio, and  Ashford's pro-rata share of the Highland Hospitality portfolio are provided in the table attached to this release.

In addition, in 2013, Marriott Hotels and Resorts converted to a monthly reporting calendar as opposed to its traditional thirteen-period reporting calendar.  Historically, Ashford has recorded four of its Marriott-managed hotels' accounting periods in the fourth quarter and three in each of the other quarters during the year.  Presently, Marriott manages 38 hotels for Ashford making it one of the Company's largest property managers.  Accordingly, this year Ashford has converted its 2012 numbers on a proforma basis to calendar months, consistent with the new Marriott monthly reporting calendar, to provide necessary consistency in period-to-period comparisons.

ASSET MANAGEMENT 
As part of Ashford's ongoing asset management initiatives, during the second quarter the Company converted eight hotels from brand management to franchises.  These include the SpringHill Suites Richmond; Residence Inn Phoenix Airport; Residence Inn Newark, CA; Courtyard Oakland Airport, Courtyard by Marriott Newark, CA; Marriott Suites Market Center Dallas; Courtyard Palm Desert and Residence Inn Palm Desert.  In addition, subsequent to the end of the quarter, the Company entered into an agreement to convert the Beverly Hills Crowne Plaza Hotel to the Marriott brand after the expiration of the existing license agreement in March of 2015.

Mr. Bennett commented, "Our asset management team is constantly exploring ways to maximize the value of our assets and generate enhanced revenues and additional cost savings.  We expect these newly franchised hotels and repositioning of our Beverly Hills asset will produce long-term value creation through higher revenue and EBITDA growth."

COMMON STOCK DIVIDEND
On June 14, 2013, Ashford announced that its Board of Directors had declared a quarterly cash dividend of $0.12 per diluted share for the Company's common stock for the second quarter ending June 30, 2013, payable on July 15, 2013, to shareholders of record as of June 28, 2013.

INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday, August 1, 2013, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (480) 629-9866.  A replay of the conference call will be available through Thursday August 8, 2013, by dialing (303) 590-3030 and entering the confirmation number, 4628631.

The Company will also provide an online simulcast and rebroadcast of its second quarter 2013 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 1, 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 Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry across all segments and at all levels of the capital structure primarily within the United States.

Ashford Hospitality Prime will be a conservatively capitalized real estate investment trust (REIT) focused on investing in high RevPAR full-service and urban select-service hotels located predominantly in domestic and international gateway markets.

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

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 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; the degree and nature of our competition; and the satisfaction of the condition to the completion of the spin-off .  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.  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 TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)














June 30,


December 31,






2013


2012






 (Unaudited) 

ASSETS





Cash and cash equivalents

$        250,464


$        185,935


Marketable securities

24,521


23,620



Total cash, cash equivalents and marketable securities

274,985


209,555


Investment in hotel properties, net

2,938,552


2,872,304


Restricted cash

77,954


84,786


Accounts receivable, net of allowance of $364 and $265, respectively

37,540


35,116


Inventories

2,296


2,111


Notes receivable, net of allowance of $8,138 and $8,333, respectively

11,404


11,331


Investment in unconsolidated joint ventures

154,173


158,694


Deferred costs, net

14,186


17,194


Prepaid expenses

15,277


10,145


Derivative assets, net

26


6,391


Other assets

5,565


4,594


Intangible asset, net

2,676


2,721


Due from affiliates

2,369


1,168


Due from third-party hotel managers

55,155


48,619











Total assets

$     3,592,158


$     3,464,729









LIABILITIES AND EQUITY




Liabilities:





Indebtedness

$     2,381,932


$     2,339,410


Accounts payable and accrued expenses

96,898


84,293


Dividends payable

20,585


18,258


Unfavorable management contract liabilities

8,847


11,165


Due to related party, net

782


3,725


Due to third-party hotel managers

2,038


1,410


Liabilities associated with marketable securities and other

1,666


1,641


Other liabilities

6,083


6,348











Total liabilities

2,518,831


2,466,250









Redeemable noncontrolling interests in operating partnership

182,289


151,179









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, 2013 and December 31, 2012

17


17




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








June 30, 2013 and December 31, 2012

95


95




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








June 30, 2013 and December 31, 2012

46


46



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







issued, 79,316,147 and 68,150,617 shares outstanding, respectively 

1,249


1,249



Additional paid-in capital

1,866,293


1,766,168



Accumulated other comprehensive loss

(263)


(282)



Accumulated deficit

(835,308)


(770,467)



Treasury stock, at cost (45,580,618 shares and 56,746,148 shares, respectively)

(142,245)


(164,884)




Total shareholders' equity of the Company

889,884


831,942


Noncontrolling interests in consolidated entities

1,154


15,358











Total equity

891,038


847,300












Total liabilities and equity

$     3,592,158


$     3,464,729









 

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, 





2013


2012


2013


2012





 (Unaudited) 


 (Unaudited) 

REVENUE









Rooms

$    205,740


$    189,829


$    389,209


$    359,288


Food and beverage

43,234


41,943


82,884


81,650


Other

9,429


8,929


18,145


16,743














Total hotel revenue

258,403


240,701


490,238


457,681


Other

136


77


243


152














Total  Revenue

258,539


240,778


490,481


457,833












EXPENSES









Hotel operating expenses










Rooms

45,075


41,802


87,231


80,402



Food and beverage

27,616


26,950


54,791


53,951



Other expenses

73,356


71,171


141,648


136,265



Management fees 

10,686


9,892


20,579


18,881















Total hotel operating expenses

156,733


149,815


304,249


289,499













Property taxes, insurance, and other

11,663


10,138


23,911


21,850


Depreciation and amortization

32,842


33,477


65,322


67,133


Impairment charges

(99)


(95)


(195)


(187)


Transaction acquisition costs

1,170



1,170



Corporate, general, and administrative:










Stock/unit-based compensation

4,550


4,223


12,893


9,369



Other general and administrative

10,149


7,707


16,322


12,807















Total Operating Expenses

217,008


205,265


423,672


400,471












OPERATING INCOME

41,531


35,513


66,809


57,362













Equity in earnings (loss) of unconsolidated joint ventures

2,367


23


(4,521)


(10,281)


Interest income

13


22


49


54


Other income

310


6,703


6,132


14,317


Interest expense

(34,174)


(34,833)


(67,622)


(68,514)


Amortization of loan costs

(1,852)


(1,451)


(3,784)


(2,646)


Write-off of deferred loan costs and exit fees



(1,971)



Unrealized gain (loss) on marketable securities

(919)


1,628


1,782


3,413


Unrealized gain (loss) on derivatives

789


(7,458)


(6,360)


(17,399)












INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

8,065


147


(9,486)


(23,694)


Income tax expense

(465)


(1,366)


(1,069)


(2,245)












INCOME (LOSS) FROM CONTINUING OPERATIONS

7,600


(1,219)


(10,555)


(25,939)

Loss from discontinued operations


(4,721)



(4,554)












NET INCOME (LOSS)

7,600


(5,940)


(10,555)


(30,493)

(Income) loss from consolidated entities attributable to noncontrolling interests

8


(54)


715


224

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

(502)


1,180


2,260


4,238












NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY

7,106


(4,814)


(7,580)


(26,031)

Preferred dividends

(8,491)


(8,490)


(16,981)


(16,822)












NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$      (1,385)


$    (13,304)


$    (24,561)


$    (42,853)












INCOME (LOSS) PER SHARE – BASIC AND DILUTED









Basic:










Loss from continuing operations attributable to common shareholders

$        (0.02)


$        (0.14)


$        (0.36)


$        (0.58)



Loss from discontinued operations attributable to common shareholders


(0.06)



$        (0.06)














Net loss attributable to common shareholders

$        (0.02)


$        (0.20)


$        (0.36)


$        (0.64)














Weighted average common shares outstanding – basic

68,489


67,639


68,088


67,396













Diluted:










Loss from continuing operations attributable to common shareholders

$        (0.02)


$        (0.14)


$        (0.36)


$        (0.58)



Loss from discontinued operations attributable to common shareholders


$        (0.06)



$        (0.06)














Net loss attributable to common shareholders

$        (0.02)


$        (0.20)


$        (0.36)


$        (0.64)














Weighted average common shares outstanding – diluted

68,489


67,639


68,088


67,396













Dividends declared per common share:

$          0.12


$          0.11


$          0.44


$          0.40












Amounts attributable to common shareholders:









Income (loss) from continuing operations

$        7,106


$         (678)


$      (7,580)


$    (22,043)


Loss from discontinued operations


(4,136)



(3,988)


Preferred dividends

(8,491)


(8,490)


(16,981)


(16,822)














Net loss attributable to common shareholders

$      (1,385)


$    (13,304)


$    (24,561)


$    (42,853)












 

 

 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, 




2013


2012


2013


2012











 Net income (loss) 

$          7,600


$      (5,940)


$    (10,555)


$    (30,493)

 (Income) loss from consolidated entities attributable to noncontrolling interests 

8


(54)


715


224

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

(502)


1,180


2,260


4,238

 Net income (loss) attributable to the Company 

7,106


(4,814)


(7,580)


(26,031)












 Interest income 

(13)


(22)


(49)


(54)


 Interest expense and amortization of loan costs 

35,529


36,239


70,501


71,090


 Depreciation and amortization  

32,005


33,434


63,665


67,017


 Impairment charges 

(99)


4,025


(195)


3,933


 Income tax expense 

465


1,366


1,069


2,245


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

502


(1,180)


(2,260)


(4,238)


 Equity in (earnings) loss of unconsolidated joint ventures 

(2,367)


(23)


4,521


10,281


 Company's portion of EBITDA of unconsolidated joint ventures 

26,747


25,116


44,136


39,680











 EBITDA 


99,875


94,141


173,808


163,923












 Amortization of unfavorable management contract liabilities 

(586)


(565)


(1,197)


(1,129)


 Gain on sale/disposition of properties 

-


-


-


-


 Write-off of loan costs and exit fees 

-


-


1,971


-


 Other income (1) 

(310)


(6,703)


(6,132)


(14,317)


 Transaction acquisition and management conversion costs 

1,300


-


1,300


-


 Transaction costs related to proposed spin-off 

3,856


-


3,856


-


 Legal costs related to litigation settlements (2) 

-


1,467


-


1,707


 Unrealized (gain) loss on marketable securities 

919


(1,628)


(1,782)


(3,413)


 Unrealized (gain) loss on derivatives 

(789)


7,458


6,360


17,399


 Equity-based compensation 

4,550


4,223


12,893


9,369


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

3


49


22


144











 Adjusted EBITDA 

$      108,818


$      98,442


$    191,099


$    173,683











(1)

Other income, primarily consisting of income from interest rate derivatives in both periods and net realized loss on marketable securities in both periods, is 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, 




2013


2012


2013


2012











 Net income (loss) 

$          7,600


$      (5,940)


$    (10,555)


$    (30,493)

 (Income) loss from consolidated entities attributable to noncontrolling interests 

8


(54)


715


224

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

(502)


1,180


2,260


4,238

 Preferred dividends 

(8,491)


(8,490)


(16,981)


(16,822)











 Net loss attributable to common shareholders 

(1,385)


(13,304)


(24,561)


(42,853)












 Depreciation and amortization on real estate 

31,900


33,374


63,462


66,892


 Impairment charges 

(99)


4,025


(195)


3,933


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

502


(1,180)


(2,260)


(4,238)


 Equity in (earnings) loss of unconsolidated joint ventures 

(2,367)


(23)


4,521


10,281


 Company's portion of FFO of unconsolidated joint ventures 

14,617


12,955


20,253


15,410











 FFO available to common shareholders 

43,168


35,847


61,220


49,425












 Write-off of loan costs and exit fees 

-


-


1,971


-


 Other income (1) 

(310)


1,303


83


1,681


 Legal costs related to litigation settlements (2) 

-


1,467


-


1,707


 Transaction acquisition and management conversion costs 

1,300


-


1,300


-


 Transaction costs related to proposed spin-off 

3,856


-


3,856


-


 Unrealized (gain) loss on marketable securities 

919


(1,628)


(1,782)


(3,413)


 Unrealized (gain) loss on derivatives 

(789)


7,458


6,360


17,399


 Equity-based compensation adjustment related to modified employment terms 

-


(511)


4,678


480


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

3


49


22


144











 Adjusted FFO available to common shareholders 

$        48,147


$      43,985


$      77,708


$      67,423











 Adjusted FFO per diluted share available to common shareholders 

$            0.55


$          0.52


$          0.90


$          0.80











 Weighted average diluted shares 

87,488


85,317


86,644


84,791











(1)

Other income, primarily consisting of net realized loss on marketable securities in both periods, is 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

JUNE 30, 2013

(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 
















 BoA MIP - 5 hotels 


March 2014


LIBOR + 4.50%


$                 -


$           170,682

(1)

$                170,682


$               18,402


10.8%

 JPM Floater - 9 hotels 


May 2014


LIBOR + 6.50%


-


135,000

(2)

135,000


17,262


12.8%

 GEMSA Manchester - 1 hotel 


May 2014


8.32%


5,198


-


5,198


579


11.1%

 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


23,751


11.3%

 UBS 1 - 8 hotels 


December 2014


5.75%


103,523


-


103,523


11,910


11.5%

 Merrill 1 - 10 hotels 


July 2015


5.22%


151,044


-


151,044


21,515


14.2%

 UBS 2 - 8 hotels 


December 2015


5.70%


95,910


-


95,910


11,244


11.7%

 Merrill 2 - 5 hotels 


February 2016


5.53%


109,154


-


109,154


17,217


15.8%

 Merrill 3 - 5 hotels 


February 2016


5.53%


90,522


-


90,522


15,635


17.3%

 Merrill 7 - 5 hotels 


February 2016


5.53%


78,412


-


78,412


13,154


16.8%

 Wachovia Philly CY - 1 hotel 


April 2017


5.91%


34,523


-


34,523


10,259


29.7%

 Wachovia 3 - 2 hotels 


April 2017


5.95%


126,519


-


126,519


16,508


13.0%

 Wachovia 7 - 3 hotels 


April 2017


5.95%


257,455


-


257,455


25,223


9.8%

 Wachovia 1 - 5 hotels 


April 2017


5.95%


114,039


-


114,039


12,264


10.8%

 Wachovia 5 - 5 hotels 


April 2017


5.95%


102,503


-


102,503


10,503


10.2%

 Wachovia 6 - 5 hotels 


April 2017


5.95%


155,970


-


155,970


16,769


10.8%

 Wachovia 2 - 7 hotels 


April 2017


5.95%


124,758


-


124,758


12,732


10.2%

 Aareal - 2 hotels 


February 2018


LIBOR + 3.50%


-


199,275


199,275


24,579


12.3%

 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%


101,916


-


101,916


15,674


15.4%

 Zion Jacksonville RI - 1 hotel 


April 2034


Greater of 6% or Prime + 1%


-


6,431


6,431


1,253


19.5%

 Unencumbered hotels 






-


-


-


7,514


N/A
















 Total 






$    1,659,544


$           722,388


$             2,381,932


$             303,947


12.8%
















 Percentage 






69.7%


30.3%


100.0%




















 Weighted average interest rate 






5.85%


5.30%


5.68%




















 Weighted average interest rate with the effect of interest rate swaps 


5.47%

(4)

5.30%

(4)

5.42%




















All indebtedness is non-recourse with the exception of the senior 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 June 30, 2013 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, 2013

(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 
















 Wells Senior - 25 hotels 


March 2014


LIBOR + 3.00%


$                 -


$           380,222

(1)

$                380,222


$               65,847


17.3%

 Mezz 1 - 28 hotels 


March 2014


Greater of 7.00% or LIBOR + 6.00%


-


93,666

(1)

93,666


87,959


14.0%

 Mezz 2 - 28 hotels 


March 2014


Greater of 8.00% or LIBOR + 7.00%


-


89,167

(1)

89,167


87,959


12.3%

 Mezz 3 - 28 hotels 


March 2014


Greater of 10.50% or LIBOR + 9.50%


-


76,429

(1)

76,429


87,959


11.1%

 Mezz 4 - 28 hotels 


March 2014


LIBOR + 2.00%




13,218

(1)

13,218


87,959


10.9%

 Morgan Stanley Boston Back Bay - 1 hotel 


January 2018


4.38%


73,400


-


73,400


9,258


12.6%

 Morgan Stanley Princeton/Nashville - 2 hotels 


January 2018


4.44%


80,247


-


80,247


12,854


16.0%
















 Total (Ashford's 71.74% share only) 






$       153,647


$           652,702


$                806,349


$               87,959


10.9%
















 Percentage 






19.1%


80.9%


100.0%




















 Weighted average interest rate 






4.41%


5.23%


5.08%




















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


$    1,813,191


$        1,375,090


$             3,188,281


$             391,906


12.3%
















 Percentage 






56.9%


43.1%


100.0%




















 Weighted average interest rate with the effect of interest rate swaps 


5.38%


5.27%


5.33%





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









































 

 

THE ASHFORD HOSPITALITY PRIME HOTELS

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

JUNE 30, 2013

(dollars in thousands)

(Unaudited)

(Included in Ashford Hospitality Trust, Inc. and Subsidiaries)











































 Proforma 


 Proforma 







 Fixed-Rate 


 Floating-Rate 


 Total 


 TTM Hotel 


 TTM EBITDA 

Indebtedness


Maturity


Interest Rate


 Debt 


 Debt 


 Debt 


 EBITDA 


 Debt Yield 
















 Wachovia Philly CY - 1 hotel 


April 2017


5.91%


$         34,523


$                    -


$                  34,523


10,259


29.7%

 Wachovia 3 - 2 hotels 


April 2017


5.95%


126,519


-


126,519


16,508


13.0%

 Wachovia 7 - 3 hotels 


April 2017


5.95%


257,455


-


257,455


25,223


9.8%

 Aareal - 2 hotels 


February 2018


LIBOR + 3.50%


-


199,275


199,275


24,579


12.3%

 TIF Philly CY - 1 hotel 


June 2018


12.85%


8,098


-


8,098




N/A
















 Total 






$       426,595


$           199,275


$                625,870


$               76,569


12.2%
















 Percentage 






68.2%


31.8%


100.0%




















 Weighted average interest rate 






6.08%


3.69%


5.32%




















All indebtedness is non-recourse.




























 

 

 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

LEGACY PORTFOLIO ONLY

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 JUNE 30, 2013 

 (in thousands) 

 (Unaudited) 







































2013


2014


2015


2016


2017


 Thereafter 


 Total 


















 GEMSA Manchester - 1 hotel 


$              -


$              5,004


$               -


$              -


$                  -


$                  -


$            5,004

 Senior credit facility - Various 


-


-


-


-


-


-


-

 UBS 1 - 8 hotels 



-


100,119


-


-


-


-


100,119

 BoA MIP - 5 hotels 


-


-


170,682


-


-


-


170,682

 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

 Aareal - 2 hotels 



-


-


-


-


-


186,259


186,259

 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 


$              -


$          105,123


$      404,284


$    259,200


$     1,208,084


$        284,243


$     2,260,934


















 Scheduled amortization payments remaining 

18,791


30,731


29,361


19,617


18,327


4,171


120,998


















 Total indebtedness of continuing operations 

$      18,791


$          135,854


$      433,645


$    278,817


$     1,226,411


$        288,414


$     2,381,932


















 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, 2013 

 (in thousands) 

 (Unaudited) 







































2013


2014


2015


2016


2017


 Thereafter 


 Total 


















 Wells Senior - 25 hotels 


$              -


$                    -


$               -


$    380,222


$                  -


$                  -


$        380,222

 Mezz 1 - 28 hotels 


-


-


-


93,665


-


-


93,665

 Mezz 2 - 28 hotels 


-


-


-


89,167


-


-


89,167

 Mezz 3 - 28 hotels 


-


-


-


76,429


-


-


76,429

 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 

-


-


-


-


-


73,703


73,703


















 Principal due in future periods 


$              -


$                    -


$               -


$    652,701


$                  -


$        141,060


$        793,762


















 Scheduled amortization payments remaining 

1,296


2,639


2,758


2,882


3,012


-


12,588


















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

$        1,296


$              2,639


$          2,758


$    655,583


$            3,012


$        141,060


$        806,349


















 Total indebtedness of continuing operations plus Ashford's 














     71.74% share of PIM Highland Holding LLC 

$      20,087


$          138,493


$      436,403


$    934,400


$     1,229,423


$        429,474


$     3,188,281



































 

 

 THE ASHFORD HOSPITALITY PRIME HOTELS 


 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 


 JUNE 30, 2013 


 (in thousands) 


 (Unaudited) 


(Included in Ashford Hospitality Trust, Inc. and Subsidiaries)



























































2013


2014


2015


2016


2017


 Thereafter 


 Total 




















 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


 Aareal - 2 hotels 



-


-


-


-


-


186,259


186,259


 TIF Philly CY - 1 hotel 


-


-


-


-


-


8,098


8,098




















 Principal due in future periods 


$              -


$                    -


$               -


$              -


$        393,978


$        194,357


$        588,335




















 Scheduled amortization payments remaining 

4,871


8,403


8,917


9,464


5,350


530


37,535




















 Total indebtedness of continuing operations 

$        4,871


$              8,403


$          8,917


$        9,464


$        399,328


$        194,887


$        625,870




















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












 

 

ASHFORD HOSPITALITY TRUST, INC.

KEY PERFORMANCE INDICATORS - PRO FORMA

LEGACY PORTFOLIO ONLY

(dollars in thousands)

(Unaudited)
































Three Months Ended


Six Months Ended




June 30,


June 30,




2013


2012


% Variance


2013


2012


% Variance















ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:














Room revenues (in thousands)

$        206,569


$        198,394


4.12%


$       393,513


$       379,066


3.81%



RevPAR

$         112.48


$         108.02


4.13%


$        106.90


$        102.93


3.86%



Occupancy

78.68%


78.44%


0.24%


75.09%


74.94%


0.15%



ADR

$         142.96


$         137.71


3.81%


$        142.36


$        137.36


3.64%















NOTES:














(1)

The above pro forma table assumes the 95 hotel properties owned and included in continuing operations at June 30, 2013 were owned as of the




beginning of the period presented.


































ALL HOTELS NOT UNDER RENOVATION













INCLUDED IN CONTINUING OPERATIONS:














Room revenues (in thousands)

$        191,095


$        184,111


3.79%


$       363,956


$       351,079


3.67%



RevPAR

$         112.64


$         108.52


3.80%


$        107.01


$        103.20


3.69%



Occupancy

78.98%


78.90%


0.08%


75.43%


75.29%


0.14%



ADR

$         142.61


$         137.55


3.68%


$        141.86


$        137.07


3.49%















NOTES:














(1)

The above pro forma table assumes the 88 hotel properties owned and included in continuing operations at June 30, 2013, but not under renovation for



three and six months ended June 30, 2013 were owned as of the beginning of the periods presented.





















(2)

Excluded Hotels Under Renovation:













Hilton Sante Fe, Hilton La Jolla Torrey Pines, Hampton Inn Buford, Hampton Inn Terre Haute









Marriott Dallas Plano Legacy, Embassy Suites Walnut Creek, Residence Inn Palm Desert




































(3)

On January 1, 2013, Marriott converted from a fiscal year with 12 weeks of operations in each of the first three quarters of the year and 16 weeks in the fourth 



quarter of the year, to calendar quarters.   The above proforma table assumes the Marriott-managed properties were reported on calendar quarters for



all periods presented. 


























HIGHLAND HOSPITALITY PORTFOLIO

(PIM HIGHLAND HOLDING LLC)

KEY PERFORMANCE INDICATORS - PRO FORMA

(dollars in thousands)

(Unaudited)





























THE FOLLOWING TABLE PRESENTS THE PRO FORMA PERFORMANCE OF THE HIGHLAND HOSPITALITY PORTFOLIO (PIM HIGHLAND



HOLDING LLC) AS IF THESE HOTELS WERE OWNED AS OF THE BEGINNING OF THE FIRST COMPARATIVE REPORTING PERIOD.


































Three Months Ended


Six Months Ended




June 30,


June 30,




2013


2012


% Variance


2013


2012


% Variance















71.74% PRO-RATA SHARE OF ALL HOTELS INCLUDED IN













CONTINUING OPERATIONS:














Room revenues (in thousands)

$          61,681


$          59,045


4.46%


$       113,441


$       107,397


5.63%



RevPAR

$         116.89


$         111.89


4.47%


$        107.67


$        101.63


5.94%



Occupancy

76.39%


76.57%


-0.18%


72.95%


72.48%


0.47%



ADR

$         153.02


$         146.13


4.71%


$        147.59


$        140.22


5.26%















NOTE:

The above pro forma table assumes the 28 hotel properties owned and included in continuing operations at June 30, 2013 were owned as of the





beginning of the periods presented.


























71.74% PRO-RATA SHARE OF ALL HOTELS NOT UNDER RENOVATION












INCLUDED IN CONTINUING OPERATIONS:














Room revenues (in thousands)

$          48,652


$          45,903


5.99%


$         92,229


$         86,250


6.93%



RevPAR

$         111.46


$         105.16


5.99%


$        105.82


$          98.67


7.25%



Occupancy

75.69%


75.22%


0.47%


72.84%


71.85%


0.99%



ADR

$         147.27


$         139.82


5.33%


$        145.27


$        137.34


5.77%















NOTES:














(1)

The above pro forma table assumes the 23 hotel properties owned and included in continuing operations at June 30, 2013 but not under renovation for



the three and six months ended June 30, 2013, were owned as of the beginning of the periods presented.




















(2)

Excluded Hotels Under Renovation:














Courtyard Boston Downtown, Hyatt Regency Wind Watch, Hilton Garden Inn Virginia Beach, Hilton Garden Inn BWI,



Hilton Boston Back Bay



























(3)

On January 1, 2013, Marriott converted from a fiscal year with 12 weeks of operations in each of the first three quarters of the year and 16 weeks in the fourth 



quarter of the year, to calendar quarters.   The above proforma table assumes the Marriott-managed properties were reported on calendar quarters for



all periods presented.