ASHFORD TRUST REPORTS SECOND QUARTER 2023 RESULTS

DALLAS, Aug. 1, 2023 /PRNewswire/ -- Ashford Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust" or the "Company") today reported financial results and performance measures for the second quarter ended June 30, 2023. The comparable performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA assume each of the hotel properties in the Company's hotel portfolio as of June 30, 2023 was owned as of the beginning of each of the periods presented. Unless otherwise stated, all reported results compare the second quarter ended June 30, 2023 with the second quarter ended June 30, 2022 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

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SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS

• Comparable RevPAR for all hotels increased 6.7% to $144.25 during the quarter on a 3.8% increase in Comparable ADR and a 2.8% increase in Comparable Occupancy.
• Net loss attributable to common stockholders was $(30.3) million or $(0.88) per diluted share for the quarter.  
• Adjusted EBITDAre was $104.0 million for the quarter, reflecting a growth rate of 8% over the prior year quarter.
• Adjusted funds from operations (AFFO) was $0.78 per diluted share for the quarter.
• Comparable Hotel EBITDA was $117.5 million for the quarter, reflecting a growth rate of 5% over the prior year quarter.
• The Company ended the quarter with cash and cash equivalents of $254.1 million and restricted cash of $150.5 million. The vast majority of the restricted cash is comprised of lender and manager held reserves.  At the end of the quarter, there was also $19.0 million in due from third-party hotel managers, which is primarily the Company's cash held by one of its property managers and is also available to fund hotel operating costs.
• Net working capital at the end of the quarter was $344.0 million.
• Capex invested during the quarter was $34.0 million.

RECENT OPERATING HIGHLIGHTS

• During the quarter, the Company extended its BAML Highland Pool Loan until April 2024. As part of this extension, the Company paid down the existing loan balance by $45 million.
• During the quarter, the Company refinanced its mortgage loans for the 157-room La Posada de Santa Fe in Santa Fe, New Mexico, which had a final maturity date in November 2023, and the 252-room Hilton Alexandria in Alexandria, Virginia, which had a final maturity date in June 2023.  These two loans were the Company's only final debt maturities in 2023.
• To date, the Company has issued approximately $51 million of its non-traded preferred stock.
• During the quarter, the Company extended its KEYS Pool C loan. Subsequent to quarter end, the Company extended its KEYS Pool D loan and its KEYS Pool E loan. In the interest of protecting stockholder value and liquidity, the Company elected not to make the required paydowns to extend its KEYS Pool A loan, its KEYS Pool B loan and its KEYS Pool F loan.

CAPITAL STRUCTURE
As of June 30, 2023, the Company had total loans of $3.7 billion with a blended average interest rate of 7.8%, taking into account in-the-money interest rate caps. Excluding the non-extended KEYS loans, based on the current level of LIBOR and SOFR and the corresponding interest rate caps, approximately 95% of the Company's debt is effectively fixed and approximately 5% is effectively floating.  Excluding the non-extended KEYS loans, currently twelve of the Company's hotels are in cash traps. 

During the quarter, the Company extended its BAML Highland Pool Loan until April 2024. As part of this extension, the Company paid down the existing loan balance by $45 million.

Also, during the quarter, the Company successfully refinanced its mortgage loans for the 157-room La Posada de Santa Fe in Santa Fe, New Mexico, which had a final maturity date in November 2023, and the 252-room Hilton Alexandria in Alexandria, Virginia, which had a final maturity date in June 2023. These two loans were the Company's only final debt maturities in 2023. The new, non-recourse loan totals $98.5 million and has a three-year initial term with two one-year extension options, subject to the satisfaction of certain conditions. The loan is interest only and provides for a floating interest rate of SOFR + 4.00%.

During the quarter, the Company extended its KEYS Pool C loan – secured by five hotels with a paydown of approximately $62 million. Subsequent to quarter end, the Company extended its KEYS Pool D loan – secured by five hotels with a paydown of approximately $26 million, and its KEYS Pool E loan – secured by five hotels with a paydown of approximately $41 million.  In the interest of protecting stockholder value and liquidity, the Company elected not to make the required paydowns to extend its KEYS Pool A loan – secured by seven hotels, its KEYS Pool B loan – secured by seven hotels, and its KEYS Pool F loan – secured by five hotels. The Company noted that proactively choosing not to extend three of these loan pools improves its balance sheet by lowering leverage and materially improves future cash flows. The combination of the paydowns and the removal of the debt associated with the pools the Company did not extend will lower the Company's debt by approximately $700 million. 

The Company did not pay a dividend on its common stock and common units for the second quarter ended June 30, 2023. The Board of Directors will continue to monitor the situation and assess future quarterly common dividend declarations. The Company is current on the dividends on its outstanding preferred stock and plans to pay dividends on its outstanding preferred stock on a current basis going forward.

The Company commenced the offering of its Non-Traded Preferred Equity during the third quarter of 2022. To date, the Company has issued 1,935,377 shares of its Series J and 90,323 shares of its Series K non-traded preferred stock raising approximately $50.6 million of gross proceeds. The expected use of proceeds for the Non-Traded Preferred Equity is acquisitions, paying down debt, and other general corporate purposes.

"During the second quarter, our portfolio delivered strong operating results," commented Rob Hays, Ashford Trust's President and Chief Executive Officer. "We've been extremely encouraged with the growth in both occupancy and ADR that we've been able to achieve and believe that strong performance reflects our high-quality, geographically diverse portfolio. Further, we're encouraged that the vast majority of our hotels are now out of their cash traps." Mr. Hays added, "On the capital management front, proactively choosing not to extend three of the KEYS loan pools improves our balance sheet by lowering leverage and materially improves our future cash flows. Looking ahead, our portfolio remains well positioned to outperform and, from a capital structure and balance sheet perspective, we will continue to focus on paying off our corporate financing and raising capital through our non-traded preferred stock."

INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Wednesday, August 2, 2023, at 11:00 a.m. ET. The number to call for this interactive teleconference is (201) 389-0920. A replay of the conference call will be available through Wednesday, August 9, 2023, by dialing (412) 317-6671 and entering the confirmation number, 13739435.

The Company will also provide an online simulcast and rebroadcast of its second quarter 2023 earnings release conference call. The live broadcast of Ashford Hospitality Trust's quarterly conference call will be available online at the Company's website, www.ahtreit.com, on Wednesday, August 2, 2023, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for approximately one year.

We use certain non-GAAP measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer real estate investment trusts more meaningful. Non-GAAP financial measures, which should not be relied upon as a substitute for GAAP measures, used in this press release are FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA. Please refer to our most recently filed Annual Report on Form 10-K for a more detailed description of how these non-GAAP measures are calculated.  The reconciliations of non-GAAP measures to the closest GAAP measures are provided below and provide further details of our results for the period being reported.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.  Securities will be offered only by means of a registration statement and prospectus which can be found at www.sec.gov.

Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. 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 Trust'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: our ability to repay, refinance, or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Trust's filings with the Securities and Exchange Commission.

The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. 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, except to the extent required by law.

SOURCE Ashford Hospitality Trust, Inc.