Ashford Trust Reports Third Quarter Results Including Ashford Prime Metrics RevPAR Growth of 4.3% for all hotels in the Ashford Prime Portfolio

Adjusted EBITDA for the Company increased 7% for the Third Quarter

DALLAS, Oct. 24, 2013 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("the Company" or "Ashford Trust") today reported the following results and performance measures for the third quarter ended September 30, 2013.  In anticipation of the proposed forthcoming spinout of Ashford Prime, the Company has changed how it's reporting its pro rata share of the Highland Hospitality Portfolio's pro forma hotel operating statistics.  Previously, the Company reported its Legacy Portfolio and its pro rata share of the Highland Hospitality Portfolio's pro forma hotel operating statistics separately.  Beginning with the third quarter, the Company is now reporting its pro forma hotel operating statistics for both the Ashford Trust Portfolio and the Ashford Prime Portfolio.  The Ashford Trust Portfolio includes the Company's pro rata share of the Highland Hospitality Portfolio, but excludes the Ashford Prime hotels.  The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) are pro forma.  Unless otherwise stated, all reported results compare the third quarter ended September 30, 2013, with the third quarter ended September 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

  • RevPAR for the Ashford Prime Portfolio hotels not under renovation increased 4.6% during the quarter
  • RevPAR for the Ashford Trust Portfolio hotels not under renovation increased 3.1% during the quarter
  • RevPAR for all Ashford Prime Portfolio hotels increased 4.3% during the quarter
  • RevPAR for all Ashford Trust Portfolio hotels increased 1.5% during the quarter
  • Excluding assets located in the Washington, D.C. and Tampa, FL markets, RevPAR increased 7.9% for all Ashford Prime Portfolio hotels
  • Excluding assets located in the Washington, D.C., Tampa, FL, and Charlotte, NC markets, RevPAR increased 4.5% for all Ashford Trust Portfolio hotels
  • Adjusted EBITDA for the Company increased $5.5 million or 7% during the third quarter
  • Hotel EBITDA flow-through was 51% for all Ashford Trust Portfolio hotels
  • Net loss attributable to common shareholders for the Company was $24.8 million, or $0.31 per diluted share, compared with net loss attributable to common shareholders of $23.6 million, or $0.35 per diluted share, in the prior-year quarter
  • Adjusted funds from operations (AFFO) for the Company was $0.25 per diluted share for the quarter as compared with $0.31 from the prior-year quarter; the prior year quarter included $8.1 million of interest rate derivative income, or $0.09 per diluted share
  • During the quarter, the Company completed a $69 million property-level debt financing for the previously-closed acquisition of the 142-room Pier House Resort in Key West, Florida which is not part of the Ashford Prime initial portfolio of hotels, but for which Ashford Prime will have an option to purchase the hotel
  • At the end of the third quarter 2013, the Company had total net working capital of $492 million, including its pro rata share of the Highland Hospitality Portfolio net working capital

CAPITAL EXPENDITURES

  • Capex invested in the quarter for the Ashford Prime Portfolio was $3.1 million
  • Capex invested in the quarter for the Ashford Trust Portfolio was $40.2 million

ASHFORD PRIME FINANCIAL AND OPERATING HIGHLIGHTS

  • RevPAR increased 4.3% to $163.02 for all hotels in the Ashford Prime Portfolio on a 3.3% increase in ADR and a 87 basis point increase in occupancy
  • Hotel EBITDA flow-through for all Ashford Prime Portfolio hotels was 33%
  • Ashford Prime will have an initial cash balance, including property level working capital, of at least $160.0 million upon spin-off
  • Ashford Prime is expected to have an initial annual dividend policy of $0.04 per Ashford Trust share equivalent
  • No debt maturities until 2017; all debt is non-recourse

ASHFORD TRUST FINANCIAL AND OPERATING HIGHLIGHTS

  • RevPAR increased 1.5% to $97.19 for all hotels in the Ashford Trust Portfolio on a 2.7% increase in ADR and a 81 basis point decrease in occupancy
  • Hotel EBITDA flow-through for all Ashford Trust Portfolio hotels was 51%
  • All debt is non-recourse

Earlier this year, the Company's 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 Company currently expects to complete the spin-off sometime during the fourth quarter of this year.  Ashford Prime is expected to qualify as a real estate investment trust ("REIT") for federal income tax purposes, and has filed an application to list its shares of common stock on the New York Stock Exchange, under the symbol "AHP." 

The Company has also prepared an Ashford Prime Questions and Answers Presentation, available on the Company's website at www.ahtreit.com both on the front page and under the Investors tab in the Presentations section.  The presentation contains answers to commonly asked questions regarding the spin-off.  Additional information can be found in the information statement for Ashford Hospitality Prime that has been filed with the SEC.

CAPITAL STRUCTURE 
At September 30, 2013, the Company 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 September 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 Trust's total combined debt had a blended average interest rate of 5.3%, with a weighted average debt maturity of 3.0 years.  Ashford Prime's total combined debt had a blended average interest rate of 5.3%, with a weighted average debt maturity of 3.8 years.

On September 11, 2013, the Company announced it had completed a $69 million property-level debt financing for the previously-closed acquisition of the 142-room Pier House Resort in Key West, Florida.  The new financing has a two-year term and three, one-year extension options with no test requirements for the first two extensions.  The loan provides for a floating interest rate of LIBOR + 4.90%, with no LIBOR Floor.

PORTFOLIO REVPAR
As of September 30, 2013, the Ashford Trust Portfolio consisted of direct hotel investments with 115 properties classified in continuing operations.  During the third quarter of 2013, 100 of the Ashford Trust Portfolio hotels included in continuing operations were not under renovation.  The Company believes reporting its operating metrics for the Ashford Trust Portfolio hotels in continuing operations on a pro forma total basis (all 115 hotels) and pro forma not under renovation basis (100 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 1.5% to $97.19 for all hotels in the Ashford Trust Portfolio on a 2.7% increase in ADR and a 81 basis point decrease in occupancy
  • Pro forma RevPAR increased 3.1% to $97.12 for hotels not under renovation in the Ashford Trust Portfolio on a 3.0% increase in ADR and a 7 basis point increase in occupancy

As of September 30, 2013, the Ashford Prime Portfolio consisted of direct hotel investments with 8 properties classified in continuing operations.  During the third quarter of 2013, 7 of the Ashford Prime Portfolio hotels included in continuing operations were not under renovation.  The Company believes reporting its operating metrics for the Ashford Prime Portfolio hotels in continuing operations on a pro forma total basis (all 8 hotels) and pro forma not under renovation basis (7 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 4.3% to $163.02 for all hotels in the Ashford Prime Portfolio on a 3.3% increase in ADR and a 87 basis point increase in occupancy
  • Pro forma RevPAR increased 4.6% to $171.22 for hotels not under renovation in the Ashford Prime Portfolio on a 2.6% increase in ADR and a 163 basis point 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 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 Ashford Trust Portfolio, including its pro-rata share of the Highland Hospitality Portfolio, and the Ashford Prime 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 115 Ashford Trust Portfolio hotels included in continuing operations and the 8 Ashford Prime Portfolio hotels included in continuing operations 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, the Company 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 the Company, comprising 32 hotels in the Ashford Trust Portfolio and 6 hotels in the Ashford Prime Portfolio, making it one of the Company's largest property managers.  Accordingly, this year the Company has converted its 2012 numbers on a pro forma basis to calendar months, consistent with the new Marriott monthly reporting calendar, to provide necessary consistency in period-to-period comparisons.

ASSET MANAGEMENT 
On August 12, 2013, the Company announced that it had entered into a franchise agreement to convert the 258-room, Crowne Plaza Beverly Hills, in the Ashford Trust Portfolio, to a Marriott after the expiration of the existing Crowne Plaza license agreement in March of 2015.  The conversion includes an extensive product improvement plan (PIP), estimated at $25 million, to include an upgrade of the Heating, Ventilation and Air Conditioning (HVAC) system, an extensive renovation of the guestrooms and public areas, including a transformational lobby renovation, and exterior improvements which will enhance the sense of arrival for guests.  The newly-minted Marriott Beverly Hills will continue to be managed by Remington Lodging & Hospitality following the completion of the conversion.  

Additionally, the Company also announced that on May 31, 2013, it completed the transfer of management from Marriott to Remington Lodging & Hospitality at seven of its select-service hotels in the Ashford Trust Portfolio (SpringHill Suites Richmond Virginia Center; Residence Inn Phoenix Airport; Residence Inn Newark Silicon Valley, CA; Courtyard Oakland Airport; Courtyard Newark Silicon Valley, CA; Courtyard Palm Desert; and Residence Inn Palm Desert) and one full-service hotel in the Ashford Trust Portfolio (Marriott Suites Market Center Dallas).  All of the franchise agreements include PIPs.

COMMON STOCK DIVIDEND
On September 13, 2013, the Company 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 third quarter ending September 30, 2013, payable on October 15, 2013, to shareholders of record as of September 30, 2013.

"Our Ashford Prime Portfolio experienced solid RevPAR growth during the quarter as our west coast assets continued to outperform, despite difficult year-over year comparisons we faced in the Tampa and Charlotte markets due to last year's political conventions.  Additionally, our investment in the Pier House Resort continues to pay off as this asset showed further increases in both RevPAR growth and Hotel EBITDA Margin," commented Monty J. Bennett, Ashford's Chairman and Chief Executive Officer.  "The Pier House also demonstrates the opportunities we are currently seeing in the debt markets, given the successful property-level debt financing we were able to achieve.  Interest rates and other market conditions remain very favorable and we will selectively pursue refinancing opportunities throughout our portfolio to capitalize on these trends, consistent with our standing goal of finding new and innovative ways to maximize shareholder value."  

INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Friday, October 25, 2013, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (480) 629-9819.  A replay of the conference call will be available through Friday November 1, 2013, by dialing (303) 590-3030 and entering the confirmation number, 4644872.

The Company will also provide an online simulcast and rebroadcast of its third 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 Friday, October 25, 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; the satisfaction of the conditions to the completion of the spin-off; and the estimated timing of completion.  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)














September 30,


December 31,






2013


2012






 (Unaudited) 

ASSETS





Cash and cash equivalents

$         310,427


$        185,935


Marketable securities

25,029


23,620



Total cash, cash equivalents and marketable securities

335,456


209,555


Investment in hotel properties, net

2,929,773


2,872,304


Restricted cash

84,215


84,786


Accounts receivable, net of allowance of $396 and $265, respectively

30,520


35,116


Inventories

2,243


2,111


Notes receivable, net of allowance of $8,037 and $8,333, respectively

11,443


11,331


Investment in unconsolidated joint ventures

144,068


158,694


Deferred costs, net

14,010


17,194


Prepaid expenses

13,832


10,145


Derivative assets, net

256


6,391


Other assets

6,252


4,594


Intangible asset, net

2,654


2,721


Due from affiliates

1,416


1,168


Due from third-party hotel managers

53,218


48,619











Total assets

$      3,629,356


$     3,464,729









LIABILITIES AND EQUITY




Liabilities:





Indebtedness

$      2,440,413


$     2,339,410


Capital leases payable

37


-


Accounts payable and accrued expenses

98,697


84,293


Dividends payable

20,734


18,258


Unfavorable management contract liabilities

8,313


11,165


Due to related party, net

1,157


3,725


Due to third-party hotel managers

1,846


1,410


Liabilities associated with marketable securities and other

1,422


1,641


Other liabilities

6,040


6,348











Total liabilities

2,578,659


2,466,250









Redeemable noncontrolling interests in operating partnership

196,427


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 September 30, 2013 and December 31, 2012

 

17


 

17







Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at September 30, 2013 and December 31, 2012

 

95


 

95







Series E Cumulative Preferred Stock, 4,630,000 shares issued and outstanding at September 30, 2013 and December 31, 2012

 

46


 

46






Common stock, $0.01 par value, 200,000,000 shares authorized, 124,896,765 shares issued, 80,565,563 and 68,150,617 shares outstanding, respectively 

 

1,249


 

1,249





Additional paid-in capital

1,882,100


1,766,168



Accumulated other comprehensive loss

(240)


(282)



Accumulated deficit

(889,035)


(770,467)



Treasury stock, at cost (44,331,202 shares and 56,746,148 shares, respectively)

(140,054)


(164,884)




Total shareholders' equity of the Company

854,178


831,942


Noncontrolling interests in consolidated entities

92


15,358











Total equity

854,270


847,300












Total liabilities and equity

$      3,629,356


$     3,464,729









 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)
















 Three Months Ended 


 Nine Months Ended 





 September 30, 


 September 30, 





2013


2012


2013


2012





 (Unaudited) 


 (Unaudited) 

REVENUE









Rooms

$    197,067


$    181,511


$    586,276


$    540,799


Food and beverage

34,444


33,732


117,328


115,382


Other

10,364


8,852


28,509


25,595














Total hotel revenue

241,875


224,095


732,113


681,776


Other

149


100


392


252














Total  Revenue

242,024


224,195


732,505


682,028












EXPENSES









Hotel operating expenses










Rooms

45,079


41,673


132,310


122,076



Food and beverage

25,860


24,486


80,651


78,436



Other expenses

74,275


67,723


215,923


203,988



Management fees 

9,888


9,261


30,467


28,142















Total hotel operating expenses

155,102


143,143


459,351


432,642













Property taxes, insurance, and other

12,474


11,487


36,385


33,337


Depreciation and amortization

32,777


33,558


98,099


100,691


Impairment charges

(101)


(5,066)


(296)


(5,253)


Transaction acquisition costs

126



1,296



Corporate, general, and administrative:










Stock/unit-based compensation

4,156


4,332


17,049


13,701



Other general and administrative

9,309


6,519


25,631


19,326















Total Operating Expenses

213,843


193,973


637,515


594,444












OPERATING INCOME

28,181


30,222


94,990


87,584













Equity in loss of unconsolidated joint ventures

(10,105)


(7,373)


(14,626)


(17,654)


Interest income

12


30


61


84


Other income

314


8,671


6,446


22,988


Interest expense

(34,679)


(35,532)


(102,300)


(104,046)


Amortization of loan costs

(1,946)


(1,597)


(5,731)


(4,243)


Write-off of deferred loan costs and exit fees



(1,971)



Unrealized gain (loss) on marketable securities

257


(48)


2,039


3,365


Unrealized loss on derivatives

(817)


(9,353)


(7,177)


(26,753)












LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(18,783)


(14,980)


(28,269)


(38,675)


Income tax expense

(619)


(639)


(1,688)


(2,884)












LOSS FROM CONTINUING OPERATIONS

(19,402)


(15,619)


(29,957)


(41,559)

Loss from discontinued operations


(2,412)



(6,966)












NET LOSS

(19,402)


(18,031)


(29,957)


(48,525)

Loss from consolidated entities attributable to noncontrolling interests

175


219


890


444

Net loss attributable to redeemable noncontrolling interests in operating partnership

2,892


2,665


5,152


6,902












NET LOSS ATTRIBUTABLE TO THE COMPANY

(16,335)


(15,147)


(23,915)


(41,179)

Preferred dividends

(8,490)


(8,490)


(25,471)


(25,312)












NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$    (24,825)


$    (23,637)


$    (49,386)


$    (66,491)












INCOME (LOSS) PER SHARE – BASIC AND DILUTED









Basic:










Loss from continuing operations attributable to common shareholders

$        (0.31)


$        (0.32)


$        (0.69)


$        (0.90)



Loss from discontinued operations attributable to common shareholders


(0.03)



$        (0.09)














Net loss attributable to common shareholders

$        (0.31)


$        (0.35)


$        (0.69)


$        (0.99)














Weighted average common shares outstanding – basic

79,898


67,659


72,068


67,484













Diluted:










Loss from continuing operations attributable to common shareholders

$        (0.31)


$        (0.32)


$        (0.69)


$        (0.90)



Loss from discontinued operations attributable to common shareholders


$        (0.03)



$        (0.09)














Net loss attributable to common shareholders

$        (0.31)


$        (0.35)


$        (0.69)


$        (0.99)














Weighted average common shares outstanding – diluted

79,898


67,659


72,068


67,484













Dividends declared per common share:

$          0.12


$          0.11


$          0.36


$          0.33












Amounts attributable to common shareholders:









Loss from continuing operations

$    (16,335)


$    (13,038)


$    (23,915)


$    (35,082)


Loss from discontinued operations


(2,109)



(6,097)


Preferred dividends

(8,490)


(8,490)


(25,471)


(25,312)














Net loss attributable to common shareholders

$    (24,825)


$    (23,637)


$    (49,386)


$    (66,491)

 

 

 ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES 

 RECONCILIATION OF NET LOSS TO EBITDA 

 (in thousands) 

 (Unaudited) 












 Three Months Ended 


 Nine Months Ended 




 September 30, 


 September 30, 




2013


2012


2013


2012











 Net loss 

$      (19,402)


$    (18,031)


$    (29,957)


$    (48,525)

 Loss from consolidated entities attributable to noncontrolling interests 

175


219


890


444

 Net loss attributable to redeemable noncontrolling interests in operating partnership 

2,892


2,665


5,152


6,902

 Net loss attributable to the Company 

(16,335)


(15,147)


(23,915)


(41,179)












 Interest income 

(12)


(30)


(60)


(84)


 Interest expense and amortization of loan costs 

36,120


37,190


106,621


108,280


 Depreciation and amortization  

31,952


33,434


95,618


100,451


 Impairment charges 

(101)


(5,066)


(296)


(1,133)


 Income tax expense 

619


639


1,688


2,884


 Net loss attributable to redeemable noncontrolling interests in operating partnership 

(2,892)


(2,665)


(5,152)


(6,902)


 Equity in loss of unconsolidated joint ventures 

10,105


7,373


14,626


17,654


 Company's portion of EBITDA of unconsolidated joint ventures 

19,262


17,996


63,398


57,676











 EBITDA 

78,718


73,724


252,528


237,647












 Amortization of unfavorable management contract liabilities 

(533)


(565)


(1,730)


(1,694)


 Write-off of loan costs and exit fees 

-


-


1,971


-


 Other income (1) 

(314)


(8,671)


(6,446)


(22,988)


 Transaction, acquisition and management conversion costs 

326


-


1,626


-


 Transaction costs related to proposed spin-off 

2,587


-


6,442


-


 Legal costs related to litigation settlements (2) 

-


755


-


2,463


 Unrealized (gain) loss on marketable securities 

(257)


48


(2,039)


(3,365)


 Unrealized loss on derivatives 

817


9,353


7,177


26,753


 El Conquistador results since appointment of receiver (3) 

-


897


-


897


 Equity-based compensation 

4,156


4,332


17,049


13,701


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

2


81


24


225











 Adjusted EBITDA 

$        85,502


$      79,954


$    276,602


$    253,639











(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.

(3)

On August 15, 2012, a receiver was appointed to take over this hotel and had full control of the hotel operations and cash flow.  The operating results for the Hilton El Conquistador in Tucson, AZ from that date through September 30, 2012 are excluded from Adjusted EBITDA.





















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

 (in thousands, except per share amounts) 

 (Unaudited) 














 Three Months Ended 


 Nine Months Ended 




 September 30, 


 September 30, 




2013


2012


2013


2012











 Net loss 

$      (19,402)


$    (18,031)


$    (29,957)


$    (48,525)

 Loss from consolidated entities attributable to noncontrolling interests 

175


219


890


444

 Net loss attributable to redeemable noncontrolling interests in operating partnership 

2,892


2,665


5,152


6,902

 Preferred dividends 

(8,490)


(8,490)


(25,471)


(25,312)











 Net loss attributable to common shareholders 

(24,825)


(23,637)


(49,386)


(66,491)












 Depreciation and amortization on real estate 

31,842


33,398


95,304


100,289


 Impairment charges 

(101)


(5,066)


(296)


(1,133)


 Net loss attributable to redeemable noncontrolling interests in operating partnership 

(2,892)


(2,665)


(5,152)


(6,902)


 Equity in loss of unconsolidated joint ventures 

10,105


7,373


14,626


17,654


 Company's portion of FFO of unconsolidated joint ventures 

6,991


5,845


27,245


21,255











 FFO available to common shareholders 

21,120


15,248


82,341


64,672












 Write-off of loan costs and exit fees 

-


-


1,971


-


 Other income (1) 

(314)


(607)


(231)


1,065


 Legal costs related to litigation settlements (2) 

-


755


-


2,463


 Transaction, acquisition and management conversion costs 

326


-


1,626


-


 Transaction costs related to proposed spin-off 

2,587


-


6,442


-


 Unrealized (gain) loss on marketable securities 

(257)


48


(2,039)


(3,365)


 Unrealized loss on derivatives 

817


9,353


7,177


26,753


 El Conquistador results since appointment of receiver (3) 

-


1,144


-


1,144


 Equity-based compensation adjustment related to modified employment terms 

-


-


4,678


480


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

2


89


24


233











 Adjusted FFO available to common shareholders 

$        24,281


$      26,030


$    101,989


$      93,445











 Adjusted FFO per diluted share available to common shareholders 

$            0.25


$          0.31


$          1.12


$          1.10











 Weighted average diluted shares 

98,982


85,344


90,800


84,976











(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.

(3)

On August 15, 2012, a receiver was appointed to take over this hotel and had full control of the hotel operations and cash flow.  The operating results for the Hilton El Conquistador in Tucson, AZ from that date through September 30, 2012 are excluded from Adjusted FFO.

 

 

ASHFORD TRUST PORTFOLIO (INCLUDING 71.74% PRO RATA SHARE OF HIGHLAND HOSPITALITY PORTFOLIO, EXCLUDING ASHFORD PRIME PORTFOLIO)

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

SEPTEMBER 30, 2013

(dollars in thousands)

(Unaudited)




























 Pro Forma 


 Pro Forma 







 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%


$                 -


$           167,327

(1)

$                167,327


$               18,579


11.1%

 Wells Senior - 25 hotels 


March 2014


LIBOR + 3.00%


-


380,222

(5)

380,222


65,846


17.3%

 Mezz 1 - 28 hotels 


March 2014


Greater of 7.00% or LIBOR + 6.00%


-


93,581

(5)

93,581


88,233


14.4%

 Mezz 2 - 28 hotels 


March 2014


Greater of 8.00% or LIBOR + 7.00%


-


89,087

(5)

89,087


88,233


12.6%

 Mezz 3 - 28 hotels 


March 2014


Greater of 10.50% or LIBOR + 9.50%


-


76,360

(5)

76,360


88,233


11.3%

 Mezz 4 - 28 hotels 


March 2014


LIBOR + 2.00%




13,218

(5)

13,218


88,233


11.1%

 JPM Floater - 9 hotels 


May 2014


LIBOR + 6.50%


-


135,000

(2)

135,000


17,462


12.9%

 GEMSA Manchester - 1 hotel 


May 2014


8.32%


5,147


-


5,147


679


13.2%

 Senior credit facility - Various 


September 2014


LIBOR + 2.75% to 3.5%


-


-


-


 N/A 


N/A

 Goldman Sachs - 5 hotels 


November 2014


Greater of 6.40% or LIBOR + 6.15%


-


211,000

(3)

211,000


24,225


11.5%

 UBS 1 - 8 hotels 


December 2014


5.75%


102,948


-


102,948


11,888


11.5%

 Merrill 1 - 10 hotels 


July 2015


5.22%


150,177


-


150,177


21,402


14.3%

 JPM Pier House - 1 hotel 


September 2015


LIBOR + 4.90%


-


69,000

(4)

69,000


6,867


10.0%

 UBS 2 - 8 hotels 


December 2015


5.70%


95,415


-


95,415


11,381


11.9%

 Merrill 2 - 5 hotels 


February 2016


5.53%


108,557


-


108,557


16,546


15.2%

 Merrill 3 - 5 hotels 


February 2016


5.53%


90,027


-


90,027


15,703


17.4%

 Merrill 7 - 5 hotels 


February 2016


5.53%


77,983


-


77,983


13,005


16.7%

 Wachovia 1 - 5 hotels 


April 2017


5.95%


113,703


-


113,703


12,458


11.0%

 Wachovia 5 - 5 hotels 


April 2017


5.95%


102,201


-


102,201


10,451


10.2%

 Wachovia 6 - 5 hotels 


April 2017


5.95%


155,511


-


155,511


16,415


10.6%

 Wachovia 2 - 7 hotels 


April 2017


5.95%


124,391


-


124,391


12,519


10.1%

 Morgan Stanley Boston Back Bay - 1 hotel 


January 2018


4.38%


73,113


-


73,113


9,223


12.6%

 Morgan Stanley Princeton/Nashville - 2 hotels 


January 2018


4.44%


79,938


-


79,938


13,164


16.5%

 GACC Gateway - 1 hotel 


November 2020


6.26%


101,604


-


101,604


14,693


14.5%

 Zion Jacksonville RI - 1 hotel 


April 2034


Greater of 6% or Prime + 1%


-


6,393


6,393


1,278


20.0%

 Unencumbered hotels 






-


-


-


973


N/A
















 Total 






$    1,380,715


$        1,241,188


$             2,621,903


$             314,757


12.0%
















 Percentage 






52.7%


47.3%


100.0%




















 Weighted average interest rate 






5.62%


5.50%


5.56%




















 Weighted average interest rate with the effect of interest rate swaps 


5.17%

(6)

5.50%

(6)

5.33%




















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) This mortgage loan has three one-year extension options beginning September 2015, subject to satisfaction of certain conditions.

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

(6) These rates are calculated assuming the LIBOR rate stays at the September 30, 2013 level and with the effect of our interest rate derivatives.





























































ASHFORD PRIME PORTFOLIO

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

SEPTEMBER 30, 2013

(dollars in thousands)

(Unaudited)




























 Pro Forma 


 Pro Forma 







 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%


$         34,420


$                    -


$                  34,420


$               10,530


30.6%

 Wachovia 3 - 2 hotels 


April 2017


5.95%


126,147


-


126,147


17,209


13.6%

 Wachovia 7 - 3 hotels 


April 2017


5.95%


256,698


-


256,698


25,443


9.9%

 Aareal - 2 hotels 


February 2018


LIBOR + 3.50%


-


198,666


198,666


23,910


12.0%

 TIF Philly CY - 1 hotel 


June 2018


12.85%


8,098


-


8,098


N/A


N/A
















 Total 






$       425,363


$           198,666


$                624,029


$               77,092


12.4%
















 Percentage 






68.2%


31.8%


100.0%




















 Weighted average interest rate 






6.08%


3.68%


5.32%




















All indebtedness is non-recourse.















 

 

ASHFORD TRUST PORTFOLIO (INCLUDING 71.74% PRO RATA SHARE OF HIGHLAND HOSPITALITY PORTFOLIO, EXCLUDING ASHFORD PRIME PORTFOLIO)

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 SEPTEMBER 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 


-


-


167,327


-


-


-


167,327

 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

 Wells Senior - 25 hotels 


-


-


-


380,222


-


-


380,222

 Mezz 1 - 28 hotels 


-


-


-


93,581


-


-


93,581

 Mezz 2 - 28 hotels 


-


-


-


89,087


-


-


89,087

 Mezz 3 - 28 hotels 


-


-


-


76,360


-


-


76,360

 Mezz 4 - 28 hotels 


-


-


-


13,218


-


-


13,218

 JPM Floater - 9 hotels 


-


-


-


-


135,000


-


135,000

 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

 GACC Gateway - 1 hotel 


-


-


-


-


-


89,886


89,886

 JPM Pier House - 1 hotel 


-


-


-


-


-


69,000


69,000

 Morgan Stanley Boston Back Bay - 1 hotel 

-


-


-


-


-


67,358


67,358

 Morgan Stanley Princeton/Nashville - 2 hotels 

-


-


-


-


-


73,703


73,703

 Zion Jacksonville RI - 1 hotel 


-


-


-


-


-


-


-


















 Principal due in future periods 


$              -


$          105,123


$      400,929


$    911,667


$        814,106


$        299,946


$     2,531,772


















 Scheduled amortization payments remaining 

9,297


24,967


23,202


13,035


15,989


3,641


90,132


















 Total indebtedness of continuing operations 

$        9,297


$          130,090


$      424,131


$    924,702


$        830,095


$        303,587


$     2,621,903


















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

























































































 ASHFORD PRIME PORTFOLIO 

 INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED 

 SEPTEMBER 30, 2013 

 (in thousands) 

 (Unaudited) 







































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 

3,030


8,403


8,917


9,464


5,350


530


35,694


















 Total indebtedness of continuing operations 

$        3,030


$              8,403


$          8,917


$        9,464


$        399,328


$        194,887


$        624,029


















 

 

ASHFORD TRUST PORTFOLIO (INCLUDING 71.74% PRO RATA SHARE OF HIGHLAND HOSPITALITY PORTFOLIO, EXCLUDING ASHFORD PRIME PORTFOLIO)

KEY PERFORMANCE INDICATORS - PRO FORMA

(dollars in thousands)

(Unaudited)
































Three Months Ended


Nine Months Ended




September 30,


September 30,




2013


2012


% Variance


2013


2012


% Variance















ALL HOTELS INCLUDED IN ASHFORD TRUST CONTINUING OPERATIONS:











Room revenues (in thousands)

$ 204,188


$ 201,080


1.55%


$ 625,474


$ 607,446


2.97%



RevPAR

$     97.19


$     95.72


1.54%


$     99.92


$     96.95


3.06%



Occupancy

73.97%


74.78%


-0.81%


74.05%


74.26%


-0.21%



ADR

$   131.39


$   128.00


2.65%


$   134.93


$   130.56


3.35%















NOTES:














(1)

The above pro forma table assumes the 115 hotel properties owned and included in continuing operations at September 30, 2013 were owned as of the



beginning of the period presented.











































Three Months Ended


Nine Months Ended




September 30,


September 30,




2013


2012


% Variance


2013


2012


% Variance

ALL HOTELS NOT UNDER RENOVATION













INCLUDED IN ASHFORD TRUST CONTINUING OPERATIONS:













Room revenues (in thousands)

$ 170,369


$ 165,227


3.11%


$ 511,654


$ 494,665


3.43%



RevPAR

$     97.12


$     94.20


3.10%


$     97.91


$     94.57


3.53%



Occupancy

74.76%


74.69%


0.07%


74.09%


73.95%


0.14%



ADR

$   129.91


$   126.12


3.01%


$   132.16


$   127.87


3.35%















NOTES:














(1)

The above pro forma table assumes the 100 hotel properties owned and included in continuing operations at September 30, 2013, but not under renovation for



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
















(2)

Excluded Hotels Under Renovation:



Hampton Inn Buford, Hampton Inn Terre Haute, Embassy Suites Palm Beach Gardens, Hilton Garden Inn Jacksonville,



Marriott DFW, Hilton St. Petersburg, Residence Inn Atlanta Buckhead, Hyatt Coral Gables, Marriott Crystal Gateway,



Courtyard Boston Downtown, Hyatt Regency Wind Watch, Silversmith, Renaissance Nashville, Hilton Parsippany,



Hilton Garden Inn Austin
















(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 pro forma table assumes the Marriott-managed properties were reported on calendar quarters for all periods presented.




 

 

ASHFORD PRIME PORTFOLIO

KEY PERFORMANCE INDICATORS - PRO FORMA

(dollars in thousands)

(Unaudited)














































Three Months Ended


Nine Months Ended




September 30,


September 30,




2013


2012


% Variance


2013


2012


% Variance















ALL HOTELS INCLUDED IN ASHFORD PRIME CONTINUING OPERATIONS:











Room revenues (in thousands)

$  47,184


$          45,228


4.32%


$ 132,852


$ 125,325


6.01%



RevPAR

$  163.02


$          156.27


4.32%


$   153.50


$   145.02


5.85%



Occupancy

84.44%


83.57%


0.87%


80.39%


79.33%


1.06%



ADR

$  193.07


$          187.00


3.25%


$   190.94


$   182.80


4.45%















NOTES:














(1)

The above pro forma table assumes the eight hotel properties included in the Prime portfolio at September 30, 2013 were owned as of the




beginning of the period presented.
























(2)

Prime portfolio includes:  Capital Hilton Washington DC, Hilton La Jolla Torrey Pines, Courtyard Philadelphia Downtown, Marriott Dallas Plano Legacy,



Courtyard San Francisco Downtown, Courtyard Seattle Downtown Lake Union, Marriott Seattle Waterfront, Renaissance Tampa International Plaza
















(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. 











































Three Months Ended


Nine Months Ended




September 30,


September 30,




2013


2012


% Variance


2013


2012


% Variance

ALL HOTELS NOT UNDER RENOVATION













INCLUDED IN ASHFORD PRIME CONTINUING OPERATIONS:













Room revenues (in thousands)

$  43,193


$          41,303


4.58%


$ 119,922


$ 113,463


5.69%



RevPAR

$  171.22


$          163.73


4.57%


$   159.05


$   150.66


5.57%



Occupancy

87.94%


86.31%


1.63%


82.35%


81.32%


1.03%



ADR

$  194.70


$          189.70


2.64%


$   193.14


$   185.27


4.25%















NOTES:














(1)

The above pro forma table assumes the seven hotel properties included in the Prime portfolio at September 30, 2013, but not under renovation for the



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
















(2)

Excluded Hotels Under Renovation:



Marriott Dallas Plano Legacy
















(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 pro forma table assumes the Marriott-managed properties were reported on calendar quarters for



all periods presented. 

 

 

ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA HOTEL OPERATING PROFIT MARGIN

(Unaudited)













THE FOLLOWING PRO FORMA EBITDA MARGIN TABLES REFLECT: (I) THE 87 HOTELS INCLUDED IN

THE COMPANY'S CONTINUING OPERATIONS AND THE COMPANY'S 71.74% SHARE OF THE 28 HOTELS

INCLUDED IN HIGHLAND HOSPITALITY PORTFOLIO (PIM HIGHLAND HOLDING LLC), AND (II) THE 

EIGHT HOTELS INCLUDED IN THE ASHFORD PRIME PORTFOLIO, AS IF THESE HOTELS WERE OWNED 

AT THE BEGINNING OF THE FIRST COMPARATIVE REPORTING PERIOD.
















Ashford


Ashford




Trust


Prime




Portfolio


Portfolio

HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:











3rd Quarter 2013

29.74%


34.20%


3rd Quarter 2012

29.62%


34.24%



Variance

0.12%


-0.04%







HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:











Rooms 

-0.22%


0.06%


Food & Beverage and Other Departmental

0.18%


0.79%


Administrative & General 

0.00%


0.29%


Sales & Marketing

0.23%


0.27%


Hospitality

-0.12%


0.00%


Repair & Maintenance 

-0.18%


0.24%


Energy 

0.04%


0.35%


Franchise Fee 

-0.10%


0.00%


Management Fee 

0.01%


-0.08%


Incentive Management Fee 

-0.01%


-1.36%


Insurance 

0.04%


-0.08%


Property Taxes

-0.03%


-0.42%


Other Taxes

0.03%


0.00%


Leases/Other

0.25%


-0.10%



Total

0.12%


-0.04%







NOTE:


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 pro forma table assumes the 


Marriott-managed properties were reported on calendar quarters for all periods presented.