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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): February 28, 2019

ASHFORD HOSPITALITY TRUST, INC.
(Exact name of registrant as specified in its charter)

Maryland
 
001-31775
 
86-1062192
(State or other jurisdiction of incorporation or organization)
 
(Commission
File Number)
 
(IRS employer
identification number)
 
 
 
 
 
14185 Dallas Parkway, Suite 1100
 
 
 
 
Dallas, Texas
 
 
 
75254
(Address of principal executive offices)
 
 
 
(Zip code)

Registrant’s telephone number, including area code: (972) 490-9600

Check the appropriated box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14-a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨






ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 28, 2019, Ashford Hospitality Trust, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Form 8-K and Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS.

(d)    Exhibits
Exhibit Number        Description

99.1    Fourth Quarter 2018 Earnings Release of the Company, dated February 28, 2019







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 28, 2019

    
 
ASHFORD HOSPITALITY TRUST, INC.
 
 
 
 
By:
/s/ DERIC S. EUBANKS
 
 
Deric S. Eubanks
 
 
Chief Financial Officer


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
EXHIBIT 99.1

396925167_hosptrustleft300dpia02.jpg
NEWS RELEASE

Contact:
Deric Eubanks
Jordan Jennings
Joe Calabrese
 
Chief Financial Officer
Investor Relations
Financial Relations Board
 
(972) 490-9600
(972) 778-9487
(212) 827-3772

ASHFORD TRUST REPORTS FOURTH QUARTER AND YEAR END 2018 RESULTS
Actual RevPAR Increased 1.0% for the Full Year
Comparable RevPAR Increased 0.6% for all Hotels Not Under Renovation in the 4th Quarter
Completed Acquisition of La Posada de Santa Fe
Completed Acquisition of the Embassy Suites New York Midtown Manhattan
Completed Acquisition of the Hilton Santa Cruz/Scotts Valley

DALLAS, February 28, 2019 - Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) today reported financial results and performance measures for the fourth quarter and full year ended December 31, 2018. 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 December 31, 2018 were owned as of the beginning of each of the periods presented. Unless otherwise stated, all reported results compare the fourth quarter ended December 31, 2018 with the fourth quarter ended December 31, 2017 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

STRATEGIC OVERVIEW
Opportunistic focus on upper upscale, full-service hotels
Targets moderate leverage levels to enhance equity returns
Highly-aligned management team and advisory structure
Attractive dividend yield of approximately 8.8%
Targets cash and cash equivalents at a level of 25 - 35% of total equity market capitalization for the purposes of:
working capital needs at property and corporate levels;
providing a hedge in the event of uncertain economic times; and
being prepared to pursue accretive investments or stock buybacks as those opportunities arise

FINANCIAL AND OPERATING HIGHLIGHTS
Net loss attributable to common stockholders was $65.4 million or $0.66 per diluted share for the quarter. For the full year of 2018, net loss attributable to common stockholders was $169.5 million or $1.75 per diluted share.
Comparable RevPAR for all hotels decreased 0.6% to $115.54 during the quarter.
Comparable RevPAR for all hotels not under renovation increased 0.6% to $112.36 during the quarter.



AHT Reports Fourth Quarter Results
Page 2
February 28, 2019


Adjusted EBITDAre was $89.8 million for the quarter. Adjusted EBITDAre for the full year of 2018 was $411.5 million.
Adjusted funds from operations (AFFO) was $0.18 per diluted share for the quarter. For the full year of 2018, AFFO per diluted share was $1.26.
As of February 28, 2019, the Company’s common stock is trading at an approximate 8.8% dividend yield.
During the quarter, the Company completed the acquisition of the 157-room La Posada de Santa Fe in Santa Fe, New Mexico for $50 million.
Subsequent to quarter end, the Company completed the acquisition of the 310-room Embassy Suites New York Midtown Manhattan in New York, New York for $195 million.
Subsequent to quarter end, the Company completed the acquisition of the 178-room Hilton Santa Cruz/Scotts Valley in Santa Cruz, California for $50 million.
Capex invested during the quarter was $42.6 million, bringing the total capex invested for the full year to $207.3 million.
 
ENHANCED RETURN FUNDING PROGRAM
On June 26, 2018, the Company announced that it had entered into an Enhanced Return Funding Program (“ERFP”) with Ashford Inc. (NYSE American: AINC). Subject to the terms of the two-year programmatic agreement, Ashford Inc. has committed to effectively fund amounts equal to 10% of the purchase price of Ashford Trust hotel acquisitions, up to an amount of $50 million in aggregate funding. The Program has the potential to be upsized to $100 million based upon mutual agreement. The Program is structured to significantly improve the 5-year internal rate of return for new hotel acquisitions at Ashford Trust. To date, the Company has completed four acquisitions totaling $406 million under the ERFP, which amounts to approximately 80% committed utilization of the pledged $50 million of ERFP funding from Ashford Inc.

LA POSADA DE SANTA FE ACQUISITION
On October 31, 2018, the Company completed the acquisition of the 157-room La Posada de Santa Fe in Santa Fe, New Mexico (“La Posada”) for $50 million ($318,000 per key). In connection with this transaction, on November 13, 2018, the Company announced that it had entered into a $25 million non-recourse mortgage loan on the property. The loan has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The loan is interest only and bears interest at a rate of LIBOR + 2.55%. As part of this transaction, the Company received an ERFP commitment of $5 million from Ashford Inc. Remington Lodging took over management of the property following the acquisition.

EMBASSY SUITES BY HILTON NEW YORK MIDTOWN MANHATTAN ACQUISITION
On January 23, 2019, the Company announced it had completed the acquisition of the 310-room Embassy Suites New York Midtown Manhattan in New York, New York for $195 million ($629,000 per key). In connection with this transaction, the Company entered into a $145 million non-recourse mortgage loan. The loan 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 bears interest at a rate of LIBOR + 3.90%. As part of this transaction, the Company received an ERFP commitment of $19.5 million from Ashford Inc. Remington Lodging took over management of the property following the acquisition.

HILTON SANTA CRUZ/SCOTTS VALLEY ACQUISITION
On February 26, 2019, the Company completed the acquisition of the 178-room Hilton Santa Cruz/Scotts Valley in Santa Cruz, California for $50 million ($281,000 per key). In connection with this transaction, the Company assumed a $25.3 million non-recourse mortgage loan. The loan has a maturity date in March 2025



AHT Reports Fourth Quarter Results
Page 3
February 28, 2019


and bears interest at a fixed rate of 4.7%. The acquisition was partially funded by the issuance of approximately 1.5 million limited partnership common units in the Company’s operating partnership (“OP Units”). The OP Units were issued at a price of $7.00 per unit, which reflects an approximate 31% premium to yesterday’s stock price. As part of this transaction, the Company also received an ERFP commitment of $5 million from Ashford Inc. Remington Lodging took over management of the property following the acquisition.

CAPITAL STRUCTURE
At December 31, 2018, the Company had total mortgage loans of $4.0 billion with a blended average interest rate of 5.8%.

PORTFOLIO REVPAR
As of December 31, 2018, the portfolio consisted of 119 properties. During the fourth quarter of 2018, 109 of the Company’s hotels were not under renovation. The Company believes reporting its operating metrics for its hotels on a comparable total basis (all 119 hotels), and comparable not under renovation basis (109 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.

Comparable RevPAR decreased 0.6% to $115.54 for all hotels on a 1.1% increase in ADR and a 1.6% decrease in occupancy
Comparable RevPAR increased 0.6% to $112.36 for hotels not under renovation on a 1.6% increase in ADR and a 1.0% decrease in occupancy

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
The Company believes year-over-year Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin comparisons are more meaningful to gauge the performance of the Company’s hotels than sequential quarter-over-quarter comparisons. Given the 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 Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin for the current and certain prior-year periods based upon the number of hotels in the Company’s portfolio as of the end of the current period. As the Company’s portfolio mix changes from time to time, so will the seasonality for Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin. The details of the quarterly calculations for the previous four quarters for the 119 hotels are provided in the table attached to this release.

COMMON STOCK DIVIDEND
On December 10, 2018, 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 fourth quarter ending December 31, 2018, payable on January 15, 2019, to shareholders of record as of December 31, 2018.

“During 2018, we continued to see the advantages from our high-quality, well-diversified portfolio and remained focused on proactive asset management initiatives as well as accretive transactions,” commented Douglas A. Kessler, Ashford Trust’s President and Chief Executive Officer. “Over the last several months, we have diligently executed on several acquisitions that have benefitted from our ERFP initiative with Ashford Inc. We remain excited about the opportunity the ERFP provides us, and, looking ahead, we are committed to maximizing value for our shareholders as we focus on generating solid operating performance, continuing to identify opportunities to accretively grow our platform and efficiently managing our balance sheet.”




AHT Reports Fourth Quarter Results
Page 4
February 28, 2019


INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Friday March 1, 2019, at 11:00 a.m. ET. The number to call for this interactive teleconference is (323) 794-2423.  A replay of the conference call will be available through Friday, March 8, 2019, by dialing (719) 457-0820 and entering the confirmation number, 5558707.

The Company will also provide an online simulcast and rebroadcast of its fourth quarter 2018 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, March 1, 2019, 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. The 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 reconciliation of non-GAAP measures to the closing GAAP measures are provided below and provide further details of our results for the period being reported.

* * * * *

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

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

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Forward looking statements in this press release may include, among others, statements about the Company’s strategy and future plans. 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: general conditions of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; our ability to successfully complete and integrate acquisitions, and manage our planned growth, and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford 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. 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.





ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(unaudited)
 
December 31,
2018
 
December 31, 2017
ASSETS
 
 
 
Investments in hotel properties, net
$
4,105,219

 
$
4,035,915

Cash and cash equivalents
319,210

 
354,805

Restricted cash
120,602

 
116,787

Marketable securities
21,816

 
26,926

Accounts receivable, net of allowance of $485 and $770, respectively
37,060

 
44,257

Inventories
4,224

 
4,244

Investment in Ashford Inc.
1,896

 
437

Investment in OpenKey
2,593

 
2,518

Deferred costs, net
3,449

 
2,777

Prepaid expenses
19,982

 
19,269

Derivative assets, net
2,396

 
2,010

Other assets
15,923

 
14,152

Intangible asset, net
9,824

 
9,943

Due from third-party hotel managers
21,760

 
17,387

Assets held for sale

 
18,423

Total assets
$
4,685,954

 
$
4,669,850

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Liabilities:
 
 
 
Indebtedness, net
$
3,927,266

 
$
3,696,300

Accounts payable and accrued expenses
136,757

 
132,401

Dividends and distributions payable
26,794

 
25,045

Due to Ashford Inc., net
23,034

 
15,146

Due to related party, net
1,477

 
1,067

Due to third-party hotel managers
2,529

 
2,431

Intangible liabilities, net
15,483

 
15,839

Derivative liabilities, net
50

 

Other liabilities
18,716

 
18,376

Liabilities associated with assets held for sale

 
13,977

Total liabilities
4,152,106

 
3,920,582

 
 
 
 
Redeemable noncontrolling interests in operating partnership
80,743

 
116,122

Equity:
 
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
 
 
 
Series D Cumulative Preferred Stock 2,389,393 shares issued and outstanding at December 31, 2018 and 2017
24

 
24

Series F Cumulative Preferred Stock 4,800,000 shares issued and outstanding at December 31, 2018 and 2017
48

 
48

Series G Cumulative Preferred Stock 6,200,000 shares issued and outstanding at December 31, 2018 and 2017
62

 
62

Series H Cumulative Preferred Stock 3,800,000 shares issued and outstanding at December 31, 2018 and 2017
38

 
38

Series I Cumulative Preferred Stock 5,400,000 shares issued and outstanding at December 31, 2018 and 2017
54

 
54

Common stock, $0.01 par value, 400,000,000 shares authorized, 101,035,530 and 97,409,113 shares issued and outstanding at December 31, 2018 and 2017, respectively
1,010

 
974

Additional paid-in capital
1,814,273

 
1,784,997

Accumulated deficit
(1,363,020
)
 
(1,153,697
)
Total shareholders' equity of the Company
452,489

 
632,500

Noncontrolling interests in consolidated entities
616

 
646

Total equity
453,105

 
633,146

Total liabilities and equity
$
4,685,954

 
$
4,669,850


5



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
REVENUE
 
 
 
 
 
 
 
Rooms
$
266,597

 
$
266,208

 
$
1,134,687

 
$
1,143,135

Food and beverage
59,442

 
59,772

 
224,311

 
234,777

Other
16,424

 
14,484

 
67,782

 
58,204

Total hotel revenue
342,463

 
340,464

 
1,426,780

 
1,436,116

Other
1,025

 
1,102

 
4,009

 
3,154

Total revenue
343,488

 
341,566

 
1,430,789

 
1,439,270

EXPENSES
 
 
 
 
 
 
 
Hotel operating expenses
 
 
 
 
 
 
 
Rooms
60,642

 
59,786

 
248,139

 
248,643

Food and beverage
40,632

 
40,064

 
156,902

 
161,683

Other expenses
109,834

 
106,344

 
442,463

 
444,322

Management fees
12,772

 
12,553

 
53,078

 
52,653

Total hotel operating expenses
223,880

 
218,747

 
900,582

 
907,301

Property taxes, insurance and other
18,992

 
18,286

 
78,355

 
73,579

Depreciation and amortization
65,922

 
61,351

 
258,458

 
246,731

Impairment charges
21,739

 
8,368

 
23,391

 
10,153

Transaction costs

 
3

 
11

 
14

Advisory services fee:
 
 
 
 
 
 
 
Base advisory fee
8,882

 
8,716

 
35,526

 
34,650

Reimbursable expenses
2,574

 
1,672

 
8,351

 
7,472

Non-cash stock/unit-based compensation
4,705

 
3,329

 
25,245

 
11,077

Incentive fee

 

 

 

Corporate, general and administrative:
 
 
 
 
 
 
 
Non-cash stock/unit-based compensation

 

 
536

 
565

Other general and administrative
2,481

 
2,452

 
10,395

 
12,723

Total operating expenses
349,175

 
322,924

 
1,340,850

 
1,304,265

Gain (loss) on sale of hotel properties
81

 
6

 
475

 
14,030

OPERATING INCOME (LOSS)
(5,606
)
 
18,648

 
90,414

 
149,035

Equity in earnings (loss) of unconsolidated entities
(25
)
 
(2,286
)
 
867

 
(5,866
)
Interest income
1,173

 
742

 
3,952

 
2,202

Other income (expense), net
(16
)
 
117

 
64

 
(3,422
)
Interest expense, net of premium amortization
(56,281
)
 
(53,109
)
 
(215,344
)
 
(209,412
)
Amortization of loan costs
(6,825
)
 
(2,298
)
 
(21,442
)
 
(13,219
)
Write-off of premiums, loan costs and exit fees
469

 
(1,216
)
 
(8,847
)
 
(2,845
)
Unrealized gain (loss) on marketable securities
(255
)
 
164

 
(1,013
)
 
(4,649
)
Unrealized gain (loss) on derivatives
1,494

 
(998
)
 
(2,178
)
 
(2,802
)
INCOME (LOSS) BEFORE INCOME TAXES
(65,872
)
 
(40,236
)
 
(153,527
)
 
(90,978
)
Income tax benefit (expense)
(176
)
 
1,711

 
(2,782
)
 
2,218

NET INCOME (LOSS)
(66,048
)
 
(38,525
)
 
(156,309
)
 
(88,760
)
(Income) loss from consolidated entities attributable to noncontrolling interest
22

 
114

 
30

 
110

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
11,226

 
8,440

 
29,313

 
21,642

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY
(54,800
)
 
(29,971
)
 
(126,966
)
 
(67,008
)
Preferred dividends
(10,644
)
 
(11,409
)
 
(42,577
)
 
(44,761
)
Extinguishment of issuance costs upon redemption of preferred stock

 
(6,292
)
 

 
(10,799
)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
(65,444
)
 
$
(47,672
)
 
$
(169,543
)
 
$
(122,568
)
 
 
 
 
 
 
 
 
INCOME (LOSS) PER SHARE – BASIC AND DILUTED
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.66
)
 
$
(0.50
)
 
$
(1.75
)
 
$
(1.30
)
Weighted average common shares outstanding – basic
99,324

 
95,328

 
97,282

 
95,207

Diluted:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.66
)
 
$
(0.50
)
 
$
(1.75
)
 
$
(1.30
)
Weighted average common shares outstanding – diluted
99,324

 
95,328

 
97,282

 
95,207

Dividends declared per common share:
$
0.12

 
$
0.12

 
$
0.48

 
$
0.48


6



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
(in thousands)
(unaudited)
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Net income (loss)
$
(66,048
)
 
$
(38,525
)
 
$
(156,309
)
 
$
(88,760
)
Interest expense and amortization of premiums and loan costs, net
63,106

 
55,407

 
236,786

 
222,631

Depreciation and amortization
65,922

 
61,351

 
258,458

 
246,731

Income tax expense (benefit)
176

 
(1,711
)
 
2,782

 
(2,218
)
Equity in (earnings) loss of unconsolidated entities
25

 
2,286

 
(867
)
 
5,918

Company's portion of EBITDA of Ashford Inc.
2,486

 
(1,646
)
 
3,445

 
(1,666
)
Company's portion of EBITDA of OpenKey
(153
)
 
(137
)
 
(572
)
 
(498
)
EBITDA
65,514

 
77,025

 
343,723

 
382,138

Impairment charges on real estate
21,739

 
8,368

 
23,391

 
10,153

(Gain) loss on sale of hotel properties
(81
)
 
(6
)
 
(475
)
 
(14,030
)
EBITDAre
87,172

 
85,387

 
366,639

 
378,261

Amortization of unfavorable contract liabilities
(38
)
 
(384
)
 
(155
)
 
(1,535
)
Uninsured hurricane related costs
(20
)
 
(882
)
 
(291
)
 
2,829

(Gain) loss on insurance settlements
(928
)
 
(192
)
 
(928
)
 
(192
)
Write-off of premiums, loan costs and exit fees
(469
)
 
1,216

 
8,847

 
2,845

Other (income) expense, net
194

 
(117
)
 
539

 
3,422

Transaction, acquisition and management conversion costs
267

 
529

 
863

 
4,299

Legal judgment and related legal costs
156

 
108

 
1,084

 
4,199

Unrealized (gain) loss on marketable securities
255

 
(164
)
 
1,013

 
4,649

Unrealized (gain) loss on derivatives
(1,494
)
 
998

 
2,178

 
2,802

Dead deal costs
236

 

 
291

 
9

Software implementation costs

 

 

 
1,034

Non-cash stock/unit-based compensation
4,993

 
3,536

 
26,939

 
12,287

Company's portion of (gain) loss of investment in securities investment fund

 

 

 
(52
)
Company's portion of adjustments to EBITDAre of Ashford Inc.
(495
)
 
3,038

 
4,479

 
6,790

Company's portion of adjustments to EBITDAre of OpenKey
16

 
9

 
17

 
13

Adjusted EBITDAre
$
89,845

 
$
93,082

 
$
411,515

 
$
421,660

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO FUNDS FROM OPERATIONS ("FFO") AND ADJUSTED FFO
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
2018
 
2017
Net income (loss)
$
(66,048
)
 
$
(38,525
)
 
$
(156,309
)
 
$
(88,760
)
(Income) loss from consolidated entities attributable to noncontrolling interest
22

 
114

 
30

 
110

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
11,226

 
8,440

 
29,313

 
21,642

Preferred dividends
(10,644
)
 
(11,409
)
 
(42,577
)
 
(44,761
)
Extinguishment of issuance costs upon redemption of preferred stock

 
(6,292
)
 

 
(10,799
)
Net income (loss) attributable to common stockholders
(65,444
)
 
(47,672
)
 
(169,543
)
 
(122,568
)
Depreciation and amortization on real estate
65,864

 
61,293

 
258,227

 
246,490

Gain (loss) on sale of hotel properties
(81
)
 
(6
)
 
(475
)
 
(14,030
)
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership
(11,226
)
 
(8,440
)
 
(29,313
)
 
(21,642
)
Equity in (earnings) loss of unconsolidated entities
25

 
2,286

 
(867
)
 
5,918

Impairment charges on real estate
21,739

 
8,368

 
23,391

 
10,153

Company's portion of FFO of Ashford Inc.
134

 
(2,145
)
 
1,524

 
(5,410
)
Company's portion of FFO of OpenKey
(155
)
 
(139
)
 
(581
)
 
(505
)
FFO available to common stockholders and OP unitholders
10,856

 
13,545

 
82,363

 
98,406

Extinguishment of issuance costs upon redemption of preferred stock

 
6,292

 

 
10,799

Write-off of premiums, loan costs and exit fees
(469
)
 
1,216

 
8,847

 
2,845

(Gain) loss on insurance settlements
(928
)
 
(192
)
 
(928
)
 
(192
)
Uninsured hurricane related costs
(20
)
 
(882
)
 
(291
)
 
2,829

Other (income) expense, net
194

 
(117
)
 
539

 
3,422

Transaction, acquisition and management conversion costs
267

 
529

 
863

 
4,299

Legal judgment and related legal costs
156

 
108

 
1,084

 
4,199

Unrealized (gain) loss on marketable securities
255

 
(164
)
 
1,013

 
4,649

Unrealized (gain) loss on derivatives
(1,494
)
 
998

 
2,178

 
2,802

Dead deal costs
236

 

 
291

 
9

Software implementation costs

 

 

 
1,034

Non-cash stock/unit-based compensation
4,993

 
3,536

 
26,939

 
12,287

Tax reform

 
(1,080
)
 

 
(1,080
)
Amortization of loan costs
6,823

 
2,297

 
21,435

 
13,213

Company's portion of (gain) loss of investment in securities investment fund

 

 

 
(52
)
Company's portion of adjustments to FFO of Ashford Inc.
199

 
3,244

 
907

 
9,374

Company's portion of adjustments to FFO of OpenKey
17

 
9

 
21

 
13

Adjusted FFO available to common stockholders and OP unitholders
$
21,085

 
$
29,339

 
$
145,261

 
$
168,856

Adjusted FFO per diluted share available to common stockholders and OP unitholders
$
0.18

 
$
0.26

 
$
1.26

 
$
1.49

Weighted average diluted shares
116,786

 
113,989

 
115,466

 
113,398


7



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
SUMMARY OF INDEBTEDNESS
DECEMBER 31, 2018
(dollars in thousands)
(unaudited)

Indebtedness
 
Maturity
 
Interest Rate
 
Fixed-Rate
Debt
 
Floating-Rate
Debt
 
Total
Debt
 
Comparable TTM
Hotel EBITDA
(8)
 
Comparable TTM EBITDA
Debt Yield
BAML Le Pavillon - 1 hotel
 
June 2019
 
LIBOR + 5.10%
 
$

 
$
43,750

(1)
$
43,750

 
$
2,326

 
5.3
%
Omni American Bank Ashton - 1 hotel
 
July 2019
 
4.00%
 
5,232

 


5,232

 
1,089

 
20.8
%
Morgan Stanley Ann Arbor - 1 hotel
 
July 2019
 
LIBOR + 4.15%
 

 
35,200

(2)
35,200

 
3,504

 
10.0
%
Morgan Stanley - 8 hotels
 
July 2019
 
LIBOR + 4.09%
 

 
144,000

(2)
144,000

 
12,066

 
8.4
%
NorthStar HGI Wisconsin Dells - 1 hotel
 
August 2019
 
LIBOR + 4.95%
 

 
7,778

(3)
7,778

 
916

 
11.8
%
Secured credit facility - various
 
September 2019
 
Base Rate(4) + 1.65% or LIBOR + 2.65%
 

 



 
 N/A

 
N/A

Morgan Stanley Pool - 17 hotels
 
November 2019
 
LIBOR + 3.00%
 

 
427,000

(5)
427,000

 
49,951

 
11.7
%
JPMorgan Chase - 8 hotels
 
February 2020
 
LIBOR + 2.92%
 

 
395,000

(5)
395,000

 
43,978

 
11.1
%
BAML Highland Pool - 21 hotels
 
April 2020
 
LIBOR + 3.20%
 

 
962,575

(5)
962,575

 
104,290

 
10.8
%
BAML Indigo Atlanta - 1 hotel
 
May 2020
 
LIBOR + 2.90%
 

 
16,100

(6)
16,100

 
2,096

 
13.0
%
KEYS Pool A - 7 hotels
 
June 2020
 
LIBOR + 3.65%
 

 
180,720

(5)
180,720

 
21,505

 
11.9
%
KEYS Pool B - 7 hotels
 
June 2020
 
LIBOR + 3.39%
 

 
174,400

(5)
174,400

 
21,348

 
12.2
%
KEYS Pool C - 5 hotels
 
June 2020
 
LIBOR + 3.73%
 

 
221,040

(5)
221,040

 
24,353

 
11.0
%
KEYS Pool D - 5 hotels
 
June 2020
 
LIBOR + 4.02%
 

 
262,640

(5)
262,640

 
28,131

 
10.7
%
KEYS Pool E - 5 hotels
 
June 2020
 
LIBOR + 2.73%
 

 
160,000

(5)
160,000

 
24,832

 
15.5
%
KEYS Pool F - 5 hotels
 
June 2020
 
LIBOR + 3.68%
 

 
215,120

(5)
215,120

 
23,945

 
11.1
%
GACC Gateway - 1 hotel
 
November 2020
 
6.26%
 
93,433

 


93,433

 
12,667

 
13.6
%
JPMorgan Chase La Posada - 1 hotel
 
November 2020
 
LIBOR + 2.55%
 

 
25,000

(7)
25,000

 
3,293

 
13.2
%
Aareal Princeton/Nashville - 2 hotels
 
June 2022
 
LIBOR + 3.00%
 

 
178,099


178,099

 
28,962

 
16.3
%
Prudential Boston Back Bay - 1 hotel
 
November 2022
 
LIBOR + 2.00%
 

 
97,000


97,000

 
13,790

 
14.2
%
Deutsche Bank W Minneapolis - 1 hotel
 
May 2023
 
5.46%
 
52,843

 


52,843

 
6,523

 
12.3
%
Aareal Hilton Alexandria - 1 hotel
 
June 2023
 
LIBOR + 2.45%
 

 
73,450


73,450

 
8,535

 
11.6
%
GACC Manchester RI - 1 hotel
 
January 2024
 
5.49%
 
6,883

 


6,883

 
1,251

 
18.2
%
GACC Jacksonville RI - 1 hotel
 
January 2024
 
5.49%
 
10,045

 


10,045

 
264

 
2.6
%
Key Bank Manchester CY - 1 hotel
 
May 2024
 
4.99%
 
6,414

 


6,414

 
890

 
13.9
%
Morgan Stanley Pool C1 - 3 hotels
 
August 2024
 
5.20%
 
65,242

 


65,242

 
8,164

 
12.5
%
Morgan Stanley Pool C2 - 2 hotels
 
August 2024
 
4.85%
 
12,048

 


12,048

 
1,761

 
14.6
%
Morgan Stanley Pool C3 - 3 hotels
 
August 2024
 
4.90%
 
24,086

 


24,086

 
3,569

 
14.8
%
BAML Pool 5 - 2 hotels
 
February 2025
 
4.45%
 
19,835

 


19,835

 
2,615

 
13.2
%
BAML Pool 3 - 3 hotels
 
February 2025
 
4.45%
 
51,304

 

 
51,304

 
7,093

 
13.8%

Unencumbered hotels
 
 
 
 
 

 



 
2,175

 
N/A

Total
 
 
 
 
 
$
347,365

 
$
3,618,872

 
$
3,966,237

 
$
465,882

 
11.7
%
Percentage
 
 
 
 
 
8.8
%
 
91.2
%
 
100.0
%
 
 
 
 
Weighted average interest rate
 
 
 
 
 
5.33
%
 
5.79
%
 
5.75
%
 
 
 
 
All indebtedness is non-recourse with the exception of the secured credit facility.
(1) 
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The second one-year extension period began in June 2018.
(2) 
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The second one-year extension period began in July 2018.
(3) 
This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in August 2018.
(4) 
Base Rate, as defined in the secured credit facility agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.
(5) 
This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions.
(6) 
This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.
(7) 
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.
(8) 
See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

8



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED
DECEMBER 31, 2018
(dollars in thousands)
(unaudited)
 
 
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
Secured credit facility - various
 
$

 
$

 
$

 
$

 
$

 
$

 
$

Omni American Bank Ashton - 1 hotel
 
5,168

 

 

 

 

 

 
5,168

BAML Le Pavillon - 1 hotel
 

 
43,750

 

 

 

 

 
43,750

Morgan Stanley - 8 hotels
 

 
144,000

 

 

 

 

 
144,000

Morgan Stanley Ann Arbor - 1 hotel
 

 
35,200

 

 

 

 

 
35,200

NorthStar HGI Wisconsin Dells - 1 hotel
 

 
7,778

 

 

 

 

 
7,778

GACC Gateway - 1 hotel
 

 
89,886

 

 

 

 

 
89,886

BAML Indigo Atlanta - 1 hotel
 

 

 

 
15,470

 

 

 
15,470

Aareal Princeton/Nashville - 2 hotels
 

 

 

 
172,099

 

 

 
172,099

Prudential Boston Back Bay - 1 hotel
 

 

 

 
97,000

 

 

 
97,000

Deutsche Bank W Minneapolis - 1 hotel
 

 

 

 

 
48,182

 

 
48,182

Aareal Hilton Alexandria - 1 hotel
 

 

 

 

 
73,450

 

 
73,450

JPMorgan Chase La Posada - 1 hotel
 

 

 

 

 
25,000

 

 
25,000

GACC Jacksonville RI - 1 hotel
 

 

 

 

 

 
9,036

 
9,036

GACC Manchester RI - 1 hotel
 

 

 

 

 

 
6,191

 
6,191

Key Bank Manchester CY - 1 hotel
 

 

 

 

 

 
5,671

 
5,671

Morgan Stanley Pool C1 - 3 hotels
 

 

 

 

 

 
58,612

 
58,612

Morgan Stanley Pool C2 - 2 hotels
 

 

 

 

 

 
10,755

 
10,755

Morgan Stanley Pool C3 - 3 hotels
 

 

 

 

 

 
21,522

 
21,522

Morgan Stanley Pool - 17 hotels
 

 

 

 

 

 
427,000

 
427,000

JPMorgan Chase - 8 hotels
 

 

 

 

 

 
395,000

 
395,000

BAML Pool 3 - 3 hotels
 

 

 

 

 

 
44,413

 
44,413

BAML Pool 5 - 2 hotels
 

 

 

 

 

 
17,073

 
17,073

BAML Highland Pool - 21 hotels
 

 

 

 

 

 
962,575

 
962,575

KEYS Pool A - 7 hotels
 

 

 

 

 

 
180,720

 
180,720

KEYS Pool B - 7 hotels
 

 

 

 

 

 
174,400

 
174,400

KEYS Pool C - 5 hotels
 

 

 

 

 

 
221,040

 
221,040

KEYS Pool D - 5 hotels
 

 

 

 

 

 
262,640

 
262,640

KEYS Pool E - 5 hotels
 

 

 

 

 

 
160,000

 
160,000

KEYS Pool F - 5 hotels
 

 

 

 

 

 
215,120

 
215,120

Principal due in future periods
 
5,168

 
320,614

 

 
284,569

 
146,632

 
3,171,768

 
3,928,751

Scheduled amortization payments remaining
 
6,337

 
8,035

 
8,170

 
6,805

 
4,658

 
3,481

 
37,486

Total indebtedness
 
$
11,505

 
$
328,649

 
$
8,170

 
$
291,374

 
$
151,290

 
$
3,175,249

 
$
3,966,237



9



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(unaudited)

ALL HOTELS:
 
 
 
Three Months Ended December 31,
 
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Comparable
 
 
2018
 
2018
 
2018
 
2017
 
2017
 
2017
 
% Variance
 
% Variance
 
Rooms revenue (in thousands)
$
265,654

 
$
1,015

 
$
266,669

 
$
265,196

 
$
2,968

 
$
268,164

 
0.17
 %
 
(0.56
)%
 
RevPAR
$
115.34

 
$
215.54

 
$
115.54

 
$
115.04

 
$
1,152.19

 
$
116.19

 
0.26
 %
 
(0.56
)%
 
Occupancy
72.88
%
 
84.73
%
 
72.91
%
 
73.96
%
 
191.61
%
 
74.10
%
 
(1.46
)%
 
(1.61
)%
 
ADR
$
158.25

 
$
254.38

 
$
158.48

 
$
155.53

 
$
601.31

 
$
156.81

 
1.75
 %
 
1.06
 %
ALL HOTELS:
 
 
 
Year Ended December 31,
 
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Comparable
 
 
2018
 
2018
 
2018
 
2017
 
2017
 
2017
 
% Variance
 
% Variance
 
Rooms revenue (in thousands)
$
1,130,258

 
$
12,065

 
$
1,142,323

 
$
1,138,188

 
$
2,979

 
$
1,141,167

 
(0.70
)%
 
0.10
 %
 
RevPAR
$
124.19

 
$
217.93

 
$
124.75

 
$
122.98

 
$
(29.83
)
 
$
124.64

 
0.99
 %
 
0.09
 %
 
Occupancy
76.40
%
 
88.38
%
 
76.47
%
 
77.42
%
 
(53.66
)%
 
77.68
%
 
(1.32
)%
 
(1.56
)%
 
ADR
$
162.55

 
$
246.57

 
$
163.14

 
$
158.84

 
$
(55.58
)
 
$
160.46

 
2.34
 %
 
1.67
 %
NOTES:
(1)
The above comparable information assumes the 119 hotel properties owned and included in the Company's operations at December 31, 2018, were owned as of the beginning of each of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.
(2)
All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.
(3)
The above information does not reflect the operations of Orlando WorldQuest Resort.
ALL HOTELS
NOT UNDER RENOVATION:
 
Three Months Ended December 31,
 
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Comparable
 
 
2018
 
2018
 
2018
 
2017
 
2017
 
2017
 
% Variance
 
% Variance
 
Rooms revenue (in thousands)
$
225,555

 
$
1,015

 
$
226,570

 
$
222,294

 
$
2,968

 
$
225,262

 
1.47
 %
 
0.58
 %
 
RevPAR
$
112.12

 
$
215.54

 
$
112.36

 
$
110.39

 
$
1,152.19

 
$
111.72

 
1.57
 %
 
0.58
 %
 
Occupancy
73.03
%
 
84.73
%
 
73.06
%
 
73.63
%
 
191.61
%
 
73.78
%
 
(0.81
)%
 
(0.98
)%
 
ADR
$
153.52

 
$
254.38

 
$
153.80

 
$
149.92

 
$
601.31

 
$
151.42

 
2.40
 %
 
1.57
 %
ALL HOTELS
NOT UNDER RENOVATION:
 
Year Ended December 31,
 
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Non-comparable Adjustments
 
Comparable
 
Actual
 
Comparable
 
 
2018
 
2018
 
2018
 
2017
 
2017
 
2017
 
% Variance
 
% Variance
 
Rooms revenue (in thousands)
$
954,004

 
$
12,065

 
$
966,069

 
$
958,731

 
$
2,979

 
$
961,710

 
(0.49
)%
 
0.45
 %
 
RevPAR
$
120.08

 
$
217.93

 
$
120.76

 
$
118.37

 
$
(29.83
)
 
$
120.22

 
1.45
 %
 
0.45
 %
 
Occupancy
76.09
%
 
88.38
%
 
76.17
%
 
76.91
%
 
(53.66
)%
 
77.20
%
 
(1.07
)%
 
(1.33
)%
 
ADR
$
157.82

 
$
246.57

 
$
158.53

 
$
153.90

 
$
(55.58
)
 
$
155.72

 
2.55
 %
 
1.81
 %
NOTES:
(1)
The above comparable information assumes the 109 hotel properties owned and included in the Company's operations at December 31, 2018, and not under renovation during the three months ended December 31, 2018, were owned as of the beginning of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.
(2)
All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.
(3)
The above information does not reflect the operations of Orlando WorldQuest Resort.
(4)
Excluded Hotels Under Renovation:
Courtyard Louisville Airport, Embassy Suites Crystal City, Hampton Inn Suites Columbus Easton, Hilton Tampa Westshore, Hilton Garden Inn BWI Airport, Hotel Indigo Atlanta Midtown, Hyatt Regency Coral Gables, Marriott Crystal Gateway, Renaissance Nashville, Ritz-Carlton Atlanta

10



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
HOTEL EBITDA
(dollars in thousands)
(unaudited)
ALL HOTELS:
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2018
 
2017
 
% Variance
 
2018
 
2017
 
% Variance
Total hotel revenue
$
341,229

 
$
339,160

 
0.61
 %
 
$
1,421,032

 
$
1,429,763

 
(0.61
)%
Non-comparable adjustments
1,519

 
5,786

 
 
 
19,170

 
10,558

 
 
Comparable total hotel revenue
$
342,748

 
$
344,946

 
(0.64
)%
 
$
1,440,202

 
$
1,440,321

 
(0.01
)%
 
 
 
 
 
 
 
 
 
 
 
 
Hotel EBITDA
$
102,549

 
$
106,630

 
(3.83
)%
 
$
459,344

 
$
471,882

 
(2.66
)%
Non-comparable adjustments
490

 
1,271

 
 
 
6,538

 
6,504

 
 
Comparable hotel EBITDA
$
103,039

 
$
107,901

 
(4.51
)%
 
$
465,882

 
$
478,386

 
(2.61
)%
Hotel EBITDA margin
30.05
%
 
31.44
%
 
(1.39
)%
 
32.32
%
 
33.00
%
 
(0.68
)%
Comparable hotel EBITDA margin
30.06
%
 
31.28
%
 
(1.22
)%
 
32.35
%
 
33.21
%
 
(0.86
)%
 
 
 
 
 
 
 
 
 
 
 
 
Hotel EBITDA adjustments attributable to consolidated noncontrolling interests
$
63

 
$
85

 
(25.88
)%
 
$
321

 
$
368

 
(12.77
)%
Hotel EBITDA attributable to the Company and OP unitholders
$
102,486

 
$
106,545

 
(3.81
)%
 
$
459,023

 
$
471,514

 
(2.65
)%
Comparable hotel EBITDA attributable to the Company and OP unitholders
$
102,976

 
$
107,816

 
(4.49
)%
 
$
465,561

 
$
478,018

 
(2.61
)%
NOTES:
(1)
The above comparable information assumes the 119 hotel properties owned and included in the Company's operations at December 31, 2018, were owned as of the beginning of each of the periods presented. Non-comparable adjustments include pre-acquisition results from hotel properties acquired during the period offset by results from hotel properties sold during the period.
(2)
All pre-acquisition information was obtained from the prior owner. The Company performed a limited review of the information as part of its analysis of the acquisition.
(3)
The above information does not reflect the operations of Orlando WorldQuest Resort.
(4)
See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

ALL HOTELS
NOT UNDER RENOVATION:
Three Months Ended
 
Year Ended
December 31,
 
December 31,
 
2018
 
2017
 
% Variance
 
2018
 
2017
 
% Variance
Total hotel revenue
$
284,387

 
$
279,756

 
1.66
 %
 
$
1,181,365

 
$
1,182,553

 
(0.10
)%
Non-comparable adjustments
1,519

 
5,786

 
 
 
19,170

 
10,558

 
 
Comparable total hotel revenue
$
285,906

 
$
285,542

 
0.13
 %
 
$
1,200,535

 
$
1,193,111

 
0.62
 %
 
 
 
 
 
 
 
 
 
 
 
 
Hotel EBITDA
$
86,931

 
$
88,691

 
(1.98
)%
 
$
388,695

 
$
394,695

 
(1.52
)%
Non-comparable adjustments
490

 
1,329

 
 
 
6,538

 
6,537

 
 
Comparable hotel EBITDA
$
87,421