Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Braemar Hotels & Resorts Inc. | ahpinvestorpresentation8-k.htm |
March 2018
Company Presentation // March 2018
Forward Looking Statements and Non-GAAP Measures
2
In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking
and subject to certain risks and uncertainties that could cause results to differ materially from those projected. 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 forward-looking statements include, but are not limited to, our business and investment strategy, our understanding of our
competition, current market trends and opportunities, projected operating results, and projected capital expenditures.
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, and the degree and nature of our
competition. These and other risk factors are more fully discussed in the company'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 or debt amount. A capitalization rate is determined by dividing the property's 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. EBITDA, FFO, AFFO, CAD and
other terms are non-GAAP measures, reconciliations of which have been provided in prior earnings releases and filings with the SEC or in the
appendix to this presentation.
The calculation of implied equity value is derived from an estimated blended capitalization rate (“Cap Rate”) for the entire portfolio using
the capitalization rate method. The estimated Cap Rate is based on recent Cap Rates of publically traded peers involving a similar blend of
asset types found in the portfolio, which is then applied to Net Operating Income (“NOI”) of the company’s assets to calculate a Total
Enterprise Value (“TEV”) of the company. From the TEV, we deduct debt and preferred equity and then add back working capital and the
company’s investment in Ashford Inc. to derive an equity value.
The capitalization rate method is one of several valuation methods for estimating asset value and implied equity value. Among the
limitations of using the capitalization rate method for determining an implied equity value are that it does not take into account the
potential change or variability in future cash flows, potential significant future capital expenditures, the intended hold period of the asset, or
a change in the future risk profile of an asset.
This overview is for informational purposes only and is not an offer to sell, or a solicitation of an offer to buy or sell, any securities of Ashford
Hospitality Prime, Inc. or any of its respective affiliates, and may not be relied upon in connection with the purchase or sale of any such
security.
Company Presentation // March 2018
Management Team
3
20 years of hospitality
experience
1 year with Ashford
15 years with Morgan Stanley
Cornell School of Hotel
Administration, BS
University of Pennsylvania
MBA
RICHARD J. STOCKTON
Chief Executive Officer &
President
18 years of hospitality
experience
15 years with Ashford
3 years with ClubCorp
CFA charterholder
Southern Methodist University
BBA
DERIC S. EUBANKS, CFA
Chief Financial Officer
13 years of hospitality
experience
8 years with Ashford (5 years
with Ashford predecessor)
5 years with Stephens
Investment Bank
Oklahoma State University BS
JEREMY J. WELTER
Chief Operating Officer
Company Presentation // March 2018
Strategic Overview
4
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Focused strategy of investing in luxury hotels and resorts
Grow organically through strong revenue and cost
control initiatives
Grow externally through accretive acquisitions of
high quality assets
Targets conservative leverage of Net Debt / Gross
Assets of 45% with non-recourse property debt
Highly-aligned management team and advisory
structure
Company Presentation // March 2018
2017 Q4 and Full Year Hotel Operating Results
5
Comparable Operating Results(1)
Q4
2017 2016
% Variance
ADR $ 243.78 $ 257.29 (5.25)%
REVPAR $ 188.15 207.27 (9.22)%
Occupancy 77.18% 80.56% (4.20)%
Revenues $ 89,572 $ 98,900 (9.43)%
Hotel EBITDA $ 27,092 $ 26,961 0.49%
Hotel EBITDA Margin 30.25 % 27.26% 2.99%
(1) Includes: Bardessono, Hotel Yountville, Ritz-Carlton St. Thomas, Pier House, Marriott Seattle Waterfront, Capital
Hilton, Sofitel Chicago, Hilton Torrey Pines, Courtyard San Francisco, Renaissance Tampa, Courtyard Philadelphia,
and Park Hyatt Beaver Creek.
Comparable Operating Results(1)
Full Year
2017 2016
% Variance
ADR 268.07 $ 269.85 (0.66)%
REVPAR $ 219.15 224.71 (2.47)%
Occupancy 81.75% 83.27% (1.83)%
Revenues $ 409,741 $ 422,292 (2.97)%
Hotel EBITDA $ 126,921 $ 126,714 0.16%
Hotel EBITDA Margin 30.98 % 30.01% 0.97%
Company Presentation // March 2018
Q4 Earnings Highlights
6
• Adjusted EBITDA was $22.0mm for the quarter, compared with $21.6mm for the prior year quarter
• Comparable RevPAR for all hotels that did not incur business interruption claims decreased 1.1%
• Adjusted funds from operations (AFFO) was $0.31 per diluted share for the quarter as compared with $0.34
per diluted share from prior-year quarter
• The Company booked $4.1mm of business interruption revenue
• Capex invested during the quarter was $10.3mm
QUARTERLY DIVIDEND PER SHARE AFFO PER SHARE
REVPAR GROWTH
$0.05 $0.05 $0.10
$0.16 $0.05 $0.10
$0.12
$0.16
$0.05
$0.10
$0.12
$0.16
$0.05
$0.10
$0.12
$0.16
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
2014 2015 2016 2017
Q1 Q2 Q3 Q4
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2014 2015 2016 2017
Full Year Highlights
• Adjusted EBITDA was $102.5mm for the year, compared with $101.4mm for the prior year
• Comparable RevPAR for all hotels decreased 2.5%
• Adjusted funds from operations (AFFO) was $1.62 per diluted share for the year, compared with $1.73 per
diluted share for the prior year
• Capex invested during the year was $43.0mm
ADJUSTED EBITDA
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
2015 2016 2017
(i
n
t
h
o
u
sa
n
ds
)
$0.18 $0.26
$0.39 $0.46
$0.45
$0.62
$0.60 $0.50
$0.42
$0.42
$0.38 $0.37 $0.21
$0.20
$0.34 $0.31
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
2014 2015 2016 2017
Company Presentation // March 2018
Business Interruption Recoveries
7
Note:
(1) Expected to Reopen 11/1/19. BI claims can be submitted for 18 months after reopening
(2) Expected BI Recoveries for Q1 2018
PIER HOUSE RESORT
RITZ-CARLTON ST. THOMAS(1)
HOTEL YOUNTVILLE
BARDESSONO
Properties Affected
HURRICANE IRMA
HURRICANE IRMA
NAPA WILDFIRES
NAPA WILDFIRES
Event
($520K)
($608K)
($227K)
($273K)
BI Deductible
($1.6mm)
$1.3mm
$2.8mm
$1.0mm
$1.3mm
Gross BI
$6.4mm
$1.3mm
BI Booked
4Q2017 1Q2018E(2)
-
$2.8mm -
- $0.8mm
- $1.0mm
$4.1mm $1.8mm
3Q2017
($0.5mm)
($0.6mm)
($1.1mm)
Company Presentation // March 2018
Recent Developments
8
Meets Defined Strategy
Luxury Chainscale Segment
Increases portfolio RevPAR by $5
Replaces critically needed EBITDA
Attractive Financial returns
No need to raise equity
Property Financial Overview
Hotel Net Operating Income of
$10.2MM
12.8x Hotel EBITDA multiple
Hotel EBITDA $13.3MM
Property Highlights
26,000 sq. ft. Beach Club with 410
feet of beachfront
Private, luxury Tom Fazio-
designed Golf Club
Award-winning 15,000 sq. ft. Ritz-
Carlton Spa Club,
Eight food and beverage outlets,
including the acclaimed Jack
Dusty waterfront restaurant
29,000 sq. ft. of flexible indoor
meeting space
Two outdoor pools
24-hour state-of-the-art fitness club
Lighted tennis courts and the Ritz
Kids Club
RITZ-CARLTON SARASOTA
We have entered into a definitive agreement to acquire the 266-room Ritz-
Carlton Sarasota in Sarasota, Florida for $171mm
Stabilized Yield(2): 8% IRR(3): 10% RevPAR(1): $284
(1) TTM RevPAR at time of announcement
(2) Expected unlevered stabilized yield
(3) Underwritten unlevered IRR
TTM Cap Rate: 6%
Company Presentation // March 2018
Portfolio Overview
9
Rooms: 3,547(1) Hotels: 12(1) Gross Assets: $1.7B(1)
Brand(1),(2) Chain Scale(1),(2)
(1) Includes pro forma data for Ritz-Carlton Sarasota, and excludes Renaissance Tampa
(2) Portfolio by Hotel EBITDA as of December 31, 2017
Upscale, 19%
Upper
Upscale, 36%
Luxury, 45% Marriott, 49%
Hilton, 24%
Accor, 4%
Independent,
15%
Hyatt, 7%
Company Presentation // March 2018
High-Quality Hotels in Leading Urban & Resort Markets
10 Non-Core Assets
Marriott Seattle
Seattle, WA
Hilton Torrey Pines
La Jolla, CA
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
Renaissance Tampa
Tampa, FL
Sofitel Chicago Magnificent
Mile
Chicago, IL
Capital Hilton
Washington D.C.
Courtyard San Francisco
San Francisco, CA
Courtyard Philadelphia
Philadelphia, PA
Capital Hilton
Washington D.C.
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Hotel Yountville
Yountville, CA
Park Hyatt Beaver Creek
Beaver Creek, CO
Core Assets
The Ritz-Carlton,
Sarasota, FL
Renaissance Tampa
Tampa, FL
Pending Close
Company Presentation // March 2018
• Core portfolio quality unparalleled in the
public lodging REIT sector
• Geographically diversified portfolio
located in strong markets
Portfolio Detail
11
(1) Pro Forma TTM as of December 31, 2017
(2) Announced repositioning to Autograph Collection by Marriott
Note: Hotel EBITDA in thousands
$219
OVERALL REVPAR
$243
CORE REVPAR
(2)
(2)
Number of TTM TTM TTM TTM Hotel % of
Core Location Rooms ADR
(1) OCC(1) RevPAR(1) EBITDA(1) Total
Bardessono Napa Valley, CA 62 $770 77% $593 $4,441 3.5%
Hotel Yountville Napa Valley, CA 80 $544 73% $398 $5,157 4.1%
Ritz-Carlton St. Thomas St. Thomas, USVI 180 $553 80% $442 $10,595 8.3%
Pier House Key West, FL 142 $431 77% $332 $10,982 8.7%
Park Hyatt Beaver Creek Beaver Creek, CO 190 $442 61% $271 $9,387 7.4%
Marriott Seattle Waterfront Seattle, WA 361 $272 88% $240 $16,209 12.8%
Capital Hilton Washington D.C. 550 $238 89% $211 $17,672 13.9%
Sofitel Chicago Magnificent Mile Chicago, IL 415 $203 81% $164 $5,778 4.6%
Hilton Torrey Pines La Jolla, CA 394 $205 84% $172 $14,740 11.6%
Total Core 2,374 $297 82% $243 $94,961 74.8%
Non-Co e
Courty rd San Francisco Downtown San Francisco, CA 408 $270 80% $216 $12,737 10.0%
Renaissance Tampa Tampa, FL 293 $192 82% $158 $7,002 5.5%
Courtyard Philadelphia Downtown Philadelphia, PA 499 $177 82% $145 $12,221 9.6%
Total Non-Core 1,200 $212 81% $172 $31,960 25.2%
Total Portfolio 3,574 $268 82% $219 $126,921 100.0%
Company Presentation // March 2018
Why We Focus on Luxury
12
(1) Total nominal growth from December 1987 to December
2017
Source: STR
Greatest long-term
RevPAR growth of
256%(1)
LUXURY
Second greatest long-
term RevPAR growth of
155%(1)
UPPER-UPSCALE
R
e
v
PAR
(
In
d
exe
d
)
50
100
150
200
250
300
350
D
e
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-8
7
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Jun
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-9
2
D
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-9
2
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c
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3
Au
g
-9
4
Jun
-9
5
A
p
r-
9
6
Fe
b
-9
7
D
e
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-9
7
O
c
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8
Au
g
-9
9
Jun
-0
0
A
p
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1
Fe
b
-0
2
D
e
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-0
2
O
c
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3
Au
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-0
4
Ju
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A
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Fe
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-0
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D
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7
O
c
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Au
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Jun
-1
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A
p
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Fe
b
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Jun
-1
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A
p
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6
Fe
b
-1
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D
e
c
-1
7
Luxury Class Upper Upscale Class Upscale Class Upper Midscale Class Midscale Class Economy Class
Company Presentation // March 2018
Long-Term Trading Premium
13
Source: STR, SNL
Top Quartile: BEE, PEB, LHO
Peers: AHT, CLDT, CHSP, DRH, FCH, HT, HPT, HST, INN, RLJ, SHO
The top quartile of lodging REITs (by RevPAR)
have consistently had higher quality assets and
traded at a premium relative to other peers
over a long-term 10 year period
2.0
PREMIUM EBITDA TRADING MULTIPLE
(TURNS)
5.0x
7.0x
9.0x
11.0x
13.0x
15.0x
17.0x
19.0x
21.0x
23.0x
25.0x
1/3/2006 1/3/2007 1/3/2008 1/3/2009 1/3/2010 1/3/2011 1/3/2012 1/3/2013 1/3/2014 1/3/2015 1/3/2016 1/3/2017
Top Quartile Avg NTM EBITDA Multiple Peer Avg NTM EBITDA Multiple
Company Presentation // March 2018
Highly Aligned Management Team
14
Management has significant personal wealth invested in the Company
REIT Avg includes: AHT, HT, APLE, CLDT, CHSP, RLJ, PEB, INN, HST, DRH, SHO, XHR, LHO, PK
Source: Company filings
* Insider equity ownership for Ashford Prime includes direct interests and interests of related parties
15%
Insider ownership 4.2x higher than REIT industry average 4.2x
Total dollar value of insider ownership (as of 3/6/18) $54mm
18.9%
14.9%
7.6%
6.1%
3.6% 3.5%
2.5% 2.3% 2.0% 1.7% 1.6% 1.1% 0.8% 0.5% 0.4% 0.3%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
AHT AHP HT APLE CLDT REIT
Avg
CHSP RLJ PEB INN HST DRH SHO XHR LHO PK
Highly-aligned management team with
among highest insider equity ownership
of publicly-traded Hotel REITs
Company Presentation // March 2018
Asset Management Overview
15
Senior Oversight
1 – COO
8 – Asset managers
2 – Legal
+ 1 – Director of Underwriting
+ 1 – Analyst
+ 2 – Revenue Optimization
+ 1 – Analyst
+ 4 – Capex Specialists
+ 1 – Property Tax specialist
+ 1 – Analyst
+ 3 – Risk & Insurance
+ 1 – Analyst
Acquisition
Underwriting
Revenue
Optimization
Expense
Control
Risk
Management
Company Presentation // March 2018
Past Operating Performance Relative to Peers
16
RevPAR Growth
7.3%
4.2%
Hotel EBITDA Growth
8.5%
8.3%
-2.5%
-0.2%
0.2%
-2.3%
2015
2.4%
1.7%
3.7%
2.5%
2016 2017
Note: Comparable Results. Peers include CHSP, PEB,
DRH, LHO, and SHO.
• Prime has outperformed its REIT peers 3 of the past 4 years (Prime results
in green, or red; REIT averages in black)
Company Presentation // March 2018
External Growth – Luxury Markets
17
TOP 15 LUXURY MARKETS BY ROOMS(1)
(1) Based on information provided by STR for luxury class as of May 2017
Market Hotels Rooms
Las Vegas 18 26,273
New York 71 17,288
Miami 51 13,132
Los Angeles 53 11,340
Hawaii 28 8,398
Chicago 40 7,920
San Francisco 22 7,795
Denver/Mountain Resorts 31 7,691
Washington DC 27 7,306
San Diego 59 6,472
Orlando 8 5,418
Phoenix 14 5,238
New Orleans 24 4,963
New Jersey 35 4,793
Atlanta 14 4,486
TOP 15 LUXURY MARKETS BY REVPAR(1)
Market RevPAR
Hawaii $405
New York $348
California Central Coast $330
Los Angeles / Long Beach $324
San Francisco $313
Boston $282
Mountain Resorts $262
Washington D.C. $233
Austin $223
Orlando $220
Miami $210
Seattle $208
Chicago $193
Phoenix $181
Philadelphia $175
~260,000 total luxury hotel rooms in U.S.(1)
Company Presentation // March 2018
Target Market Analysis(1)
18 (1) Based on internal analysis
Market Size Fundamentals Pricing Desirability
0
10
20
30
40
50
60
Fundamentals Market Size Pricing
Company Presentation // March 2018
Acquisition Strategy
19
Hotel EBITDA Margins
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2015 2016 2017
($
i
n
t
h
o
u
sa
n
ds
)
Capex
130 bps
175 bps
AVG NOI YIELD
GROWTH:
Acquisition Portfolio(2),(3),(4)
AVG NOI YIELD
GROWTH:
Acquire Luxury Assets, Focus
on Expanding Margins and
Increasing NOI by Aggressive
Asset Management and
Careful Capex Spend
Legacy Portfolio(1)
(1) NOI to gross book value from 12/31/2013 to 12/31/2017
(2) NOI to gross book value from date of acquisition to 12/31/2017
(3) Includes BI recoveries
(4) Excludes Beaver Creek and Hotel Yountville since they were acquired too recently
AVG NOI YIELD GROWTH
PER YEAR:
AVG NOI YIELD GROWTH
PER YEAR:
32 bps
131 bps
29.2%
29.4%
29.6%
29.8%
30.0%
30.2%
30.4%
30.6%
30.8%
31.0%
31.2%
2015 2016 2017
Company Presentation // March 2018
Case Study – The Ritz-Carlton St. Thomas
20
2016 (1st Full Year of Ownership)
450 83%
RPI INCREASE (BPS) HOTEL EBITDA FLOW-THROUGH
Acquired in
December 2015
from Marriott for
$64mm
Going-in TTM NOI
cap rate of 10%
Performance was
strong due to BI
recoveries in Q4
Top resort in U.S.
Virgin Islands
Quarterly NOI and NOI Yield
*NOI yield based on gross book value
Note: Includes $2.8mm of BI recoveries
$3,953 $4,155 $3,624
$1,548
$1,882 $2,406
$134
($387)
$272 $908 $649
$2,095
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
($1,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield *
Company Presentation // March 2018
Case Study – Pier House Resort
21
• Ashford Prime purchased the asset in early 2014 for $92.7mm
• Remington had recently taken over property management & has a proven ability to
deliver superior results
2015
2.5% 255 86%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA
FLOW-THROUGH
2016
4.9% 170 206%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
2017
0.6% 362 469%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Quarterly NOI and NOI Yield
*NOI yield based on gross book value
Note: Includes $1.3mm of BI recoveries in Q4 2017
$2,854 $3,224 $3,385 $3,383
$1,773
$2,104 $2,185 $2,469
$1,116
$1,317 $1,480 $999
$2,020
$2,157 $2,242
$3,203
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2014 2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield *
Company Presentation // March 2018
Case Study – Bardessono Hotel & Spa
22
• Purchased for $85 million unencumbered by management. Installed Remington as
property manager
• Initial TTM cap rate was 4.6%, current yield on cost is 7.4%*
2016 (First Full Year of Ownership)
9.7% 518 242%
REVPAR GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
2017
-4.2% -147 52%
REVPAR GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Quarterly NOI and NOI Yield
*NOI yield based on gross book value
Note: 2017 Reflects $1.0mm adjustment for BI expected to be booked in Q1
2018 related to Q4 2017, which is net of deductible
Despite California wildfire negative
impact in Q4, property continues to grow
yield on cost
($438)
$4 $93
$1,025 $1,339
$1,369
$1,566
$1,692
$1,915
$1,061
$1,238
$1,314
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
($1,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield *
Company Presentation // March 2018
Conservative Capital Structure(1)
23
45%
TARGET LEVERAGE
Net Debt
Gross Assets
(1) As of December 31, 2017
Non-recourse debt
lowers risk profile of
the platform
OVERVIEW
Floating-rate debt
provides a natural
hedge to hotel cash
flows
Maximizes flexibility
in all economic
environments
Long-standing lender
relationships
100%
NON-RECOURSE DEBT
100%
PROPERTY LEVEL,
MORTGAGE DEBT
0%
CORPORATE LEVEL DEBT
DEBT PROFILE
Company Presentation // March 2018
Cash Management Strategy
24
(1) As of December 31, 2017
(2) At market value as of 3/6/2018
NET WORKING CAPITAL(1)
10-15%
CASH TO GROSS DEBT TARGET
17%
CURRENT CASH TO
GROSS DEBT(1)
Defend our assets at financing maturity
BENEFITS
Hilton Torrey Pines
La Jolla, CA
$4.38
NWC / SHARE
Opportunistic investments in severe
economic downtown
(2)
Cash & Cash Equivalents $131.8
Restricted Cash 46.1
Accounts Receivable, net 13.5
Insurance Receivable 8.8
Prepaid Expenses 3.5
Due from Affiliates, net (1.4)
Due from Third-Party Hotel Managers, net 3.0
Investment in Ashford Inc. 18.5
Total Current Assets $224.0
Accounts Payable, net & Accrued Expenses $54.1
Dividends Payable 8.1
Total Current Liabilities $62.3
Net Working Capital $161.8
Company Presentation // March 2018
Value-Add
Refinancings
Long-Term Interest Rate Improvement
Cash Flow and Dividends
25
(1) As of December 31, 2017
(2) GAAP reconciliation in appendix
$12mm
3-PACK REFI - JAN 2017
$45mm
CAD(1),(2),(3) 4.3% 2017
Expected Cash Flow Savings
$1mm
BARDESSONO REFI - AUG 2017
Expected Cash Flow Savings
$13mm
Total Expected Annual
Cash Flow Savings
+ =
4.8% 2016
4.7% 2015
5.0% 2014
5.3% 2013
~1
0
0
b
p
s to
ta
l inte
res
t ra
te
im
p
ro
v
e
m
e
n
t since
2
0
1
3
6.5%
DIVIDEND
YIELD(4)
53%
CAD
PAYOUT RATIO(1)
Bardessono Hotel & Spa
Yountville, CA
(3) Deducts preferred dividends and actual FF&E reserve payments which are
between 4% and 5% of hotel revenue and adds back amortization of loan costs
(4) As of 3/6/2018
37%
AFFO
PAYOUT RATIO(1)
Company Presentation // March 2018
Laddered debt maturities
Debt Maturities
26
2019
NEXT HARD DEBT MATURITY
2.1x
FCCR
OVERVIEW(1)
(1) As of December 31, 2017
(2) Adjusted for sale of the Marriott Plano Legacy
Note: Excludes an $8.1mm TIF note maturing in 2018
Courtyard Philadelphia
Philadelphia, PA
(2)
$80.0 $112.0
$177.5
$436.1
0
50
100
150
200
250
300
350
400
450
500
2017 2018 2019 2020 2021 Thereafter
Fixed-Rate Floating-Rate
Company Presentation // March 2018
AHP
SHO
DRH
CHSP
LHO
PEB
Valuation Opportunity
27
(1) As reported by company earnings releases
(2) Pro forma for acquisitions of Park Hyatt Beaver Creek and Hotel Yountville
and sale of Marriott Plano Legacy
TEV / 2018E EBITDA MULTIPLE(3),(4) PRICE / 2018E AFFO / SHARE MULTIPLE(3),(4) TTM CAP RATE(3)
Discount to
average peer
trading cap
rate (bps)
Valuation Opportunity
2017 Comparable RevPAR(1)
200
Discount to
average peer
trading AFFO
multiple (turns)
4.9
Discount to
average peer
trading EBITDA
multiple (turns)
2.3
Opportunity to capture significant
valuation upside relative to peers and
NAV
#1
#2
#3
#4
#5
#6
$219
$207
$204
$187
$184
$164
(2)
(3) As of 3/6/ 2018
(4) Based on consensus estimates
6.0x
10.3x
10.9x 11.0x
12.1x
12.9x 13.1x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
AHP DRH Peer
Avg
CHSP LHO SHO PEB
9.8%
8.1% 7.9% 7.8% 7.6%
6.9%
6.4%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
AHP DRH LHO Peer
Avg
SHO CHSP PEB
10.1x
11.1x
12.3x 12.4x
13.0x 13.1x
14.9x
9.0x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
AHP DRH SHO Peer
Avg
CHSP LHO PEB
Company Presentation // March 2018
ASHFORD PRIME PORTFOLIO
*(ADJUSTED FOR SALE OF MARRIOTT PLANO)
(mms) Low-End High-End
TTM NOI*(5) $100.8 $100.8
Cap Rate(6) 8.0% 6.5%
Implied Value $1,261 $1,551
NWC*(7),(8) $162 $162
Preferred Equity(7) ($124) ($124)
Debt*(7) ($779) ($779)
Implied Equity Mkt Cap $519 $810
Intrinsic Value(1),(2)
28
Valuation
Disconnect
$361mm
Current Equity
Market Cap(3)
$665mm
Implied Equity
Market Cap(4)
$303mm
Implied Equity
Value Upside
(1) See valuation methodology disclaimer
(2) Excludes termination fee
(3) As of 3/6/2018
(4) Based on average of estimated cap rates
(5) See GAAP reconciliation in appendix
(6) Based on current implied cap rates of publicly traded peers
(7) As of December 31, 2017; Adjusted for Hilton JV
(8) Investment in Ashford Inc. at market value as of 3/6/2018
--
84% Increase
$361
$519
$665
$810
Current Market
Cap
Low End -
Implied Equity
Market Cap
Avg - Implied
Equity Market
Cap
High End -
Implied Equity
Market Cap
Company Presentation // March 2018
Key Takeaways
29
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Highest Quality Portfolio Amongst All Lodging REITs…In
The Segment With Greatest Growth Trajectory
Growing Organically: Rigorous Asset Management
While Mining Portfolio for Investment Opportunities
Growing Externally: Redeploying Capital into
Accretive Acquisitions
Shares Are Significantly Undervalued vs Peers
Highly Aligned Mgmt. Team That Is a Major Shareholder
Appendix
Company Presentation // March 2018
Reconciliation of Net Income (Loss) to Hotel NOI
31
Year Ended December 31, 2017
Net income (loss) 82,469$
(Income) loss from consolidated entities attributable to
noncontrolling interest (5,176)
Net (income) loss attributable to redeemable noncontrolling
interests in operating partnership -
Net income (loss) attributable to the Company 77,293
Non-property adjustments (22,712)
Interest income (51)
Interest expense 9,214
Amortization of loan cost 1,018
Depreciation and amortization 52,158
Income tax expense (benefit) (512)
Non-hotel EBITDA ownership expense 6,716
Income (loss) from consolidated entities attributable to
noncontrolling interest 5,176
Hotel EBITDA including amounts attributable to noncontrolling
interest 128,300
Less: EBITDA adjustments attributable to noncontrolling interest (2,927)
(Income) loss from consolidated entities attributable to
noncontrolling interest (5,176)
Net income (loss) attributable to redeemable noncontrolling
interests in operating partnership -
Hotel EBITDA attributable to the Company and OP unitholders 120,197$
Non-comparable adjustments (1,379)
Comparable hotel EBITDA 126,921$
FFE reserve (19,264)$
Comparable net operating income 107,657$
NOI adjustments attributable to noncontrolling interests (6,812)
NOI attributable to the Company and OP unitholders 100,845$
Company Presentation // March 2018
Reconciliation of Net Income (Loss) to Cash Available for Distribution
32
Year Ended December 31, 2017
Net income (loss) 28,324$
(Income) loss from consolidated entities attributable to noncontrolling interest (3,264)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership (2,038)
Preferred div idends (6,795)
Net income (loss) attributable to common stockholders 16,227
Depreciation and amortization on real estate 49,361
Impairment charges on real estate 1,068
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership 2,038
Gain on sale of hotel property (23,797)
FFO available to common stockholders and OP unitholders 44,897
Preferred div idends 6,795
Transaction and management conv ersion costs 6,774
Other (income) expense 377
Write-off of loan costs and exit fees 3,874
Unrealized (gain) loss on inv estments (9,717)
Unrealized (gain) loss on deriv ativ es 2,053
Non-cash stock/unit-based compensation (1,327)
Legal, adv isory and settlement costs 3,711
Contract modification cost 5,000
Software implementation costs 79
Uninsured hurricane related costs 3,821
Tax reform (161)
Adjusted FFO available to the Company and OP unitholders 66,176$
FFE reserv e (net of noncontrolling interest) (19,336)
Preferred div idends (6,795)
Amortizatoin of Loan costs 4,804
Cash av ailable for distribution to the Company and OP unitholders 44,849$