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): November 3, 2016

 

ASHFORD HOSPITALITY TRUST, INC.

(Exact name of registrant as specified in its charter)

 

 

 

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:

 

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

 

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

 

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

 

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

 

 

 

ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On November 3, 2016, Ashford Hospitality Trust, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2016.  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		Third Quarter 2016 Earnings Press Release of the Company, dated November 3, 2016.

 

2

 

SIGNATURE

 

Pursuant to the requirements of Section 12 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:  November 3, 2016
	ASHFORD HOSPITALITY TRUST, INC.
	By:	/s/ Deric S. Eubanks
	Deric S. Eubanks
	Chief Financial Officer

 

3

Exhibit 99.1

 

NEWS RELEASE

 

Contact:	Deric Eubanks	Jordan Jennings	Marilynn Meek
	Chief Financial Officer	Investor Relations	Financial Relations Board
	(972) 490-9600	(972) 778-9487	(212) 827-3773

 

ASHFORD TRUST REPORTS THIRD QUARTER 2016 RESULTS

Comparable RevPAR for all Hotels Not Under Renovation Grew 4.4%

Adjusted Funds from Operations per Share Increased 14.3%

Comparable Hotel EBITDA Margin Increased 59 bps

Comparable Hotel EBITDA Flow-Through was 54%

 

DALLAS, November 3, 2016 — Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) today reported financial results and performance measures for the third quarter ended September 30, 2016. The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA are comparable assuming each of the hotel properties in the Company’s hotel portfolio as of September 30, 2016 were owned as of the beginning of each of the periods presented.  Unless otherwise stated, all reported results compare the third quarter ended September 30, 2016, with the third quarter ended September 30, 2015 (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 debt levels of approximately 55 – 60% net debt/gross assets

·                  Highly-aligned management team and advisory structure

·                  One of the highest long-term total shareholder returns in the industry

·                  Attractive dividend yield of approximately 8.5%

·                  Targets cash and cash equivalents at a level of 25% - 35% of total equity market capitalization for the purposes of:

 

·                  property-level and corporate-level working capital needs

·                  as a hedge against a downturn in the economy or hotel fundamentals

·                  to be prepared to pursue accretive investments or stock buybacks as those opportunities arise

 

FINANCIAL AND OPERATING HIGHLIGHTS

 

·                  Net loss attributable to common stockholders was $35.1 million or $0.37 per diluted share

·                  Comparable RevPAR for all hotels increased 3.4% during the quarter

·                  Comparable RevPAR for all hotels not under renovation increased 4.4% during the quarter

·                  Adjusted EBITDA increased $5.6 million or 5.3%

·                  Comparable Hotel EBITDA Margin increased 59 basis points

·                  Comparable Hotel EBITDA flow-through was 54%

·                  Adjusted funds from operations (AFFO) was $0.40 per diluted share for the quarter as compared with $0.35 from the prior-year quarter representing an increase of 14.3%

·                  The Company’s common stock is currently trading at an approximate 8.5% dividend yield

 

 

AHT Reports Third Quarter Results

Page 2

November 3, 2016

 

·                  In the third quarter, the Company completed its underwritten public offering of 4,800,000 shares of 7.375% Series F Cumulative Preferred Stock at $25.00 per share

·                  In the third quarter, the Company completed the redemption of all of its issued and outstanding shares of 9.00% Series E Cumulative Preferred Stock, which was funded from the Company’s public offering of Series F Cumulative Preferred Stock

·                  In the third quarter, the Company completed the sale of the 124-room Hampton Inn & Suites in Gainesville, FL for approximately $27 million in cash ($218,000 per key)

·                  Subsequent to quarter end, the Company closed on the sale of the 162-room SpringHill Suites Gaithersburg in Gaithersburg, MD for approximately $13.2 million ($81,000 per key)

·                  Subsequent to quarter end, the Company closed on the sale of the two-hotel portfolio comprised of the 151-room Courtyard Palm Desert and the 130-room Residence Inn Palm Desert for $36 million ($128,000 per key)

·                  Subsequent to quarter end, the Company refinanced four mortgage loans with existing outstanding balances totaling approximately $415 million with a new loan totaling $450 million

·                  Subsequent to quarter end, the Company priced an underwritten public offering of 6,200,000 shares of 7.375% Series G Cumulative Preferred Stock at $25.00 per share

·                  Capex invested in the quarter was $50 million

 

CAPITAL STRUCTURE

 

At September 30, 2016, the Company had total assets of $4.8 billion.  As of September 30, 2016, the Company had $3.8 billion of mortgage debt. The Company’s total combined debt had a blended average interest rate of 5.3%.

 

On July 6, 2016, the Company announced that it had priced its underwritten public offering of 4,800,000 shares of 7.375% Series F Cumulative Preferred Stock at $25.00 per share.  Dividends on the Series F Cumulative Preferred Stock will accrue at a rate of 7.375% per annum on the liquidation preference of $25.00 per share.

 

On August 9, 2016, the Company announced that it had completed the redemption of all of its issued and outstanding shares of 9.00% Series E Cumulative Preferred Stock.  The total redemption cost was approximately $117 million, which was funded from the Company’s public offering of Series F Cumulative Preferred Stock.

 

Subsequent to quarter end, on October 10, 2016, the Company announced it had refinanced four mortgage loans with existing outstanding balances totaling approximately $415 million.  The previous mortgage loans that were refinanced were the Wachovia 1, Wachovia 2 and Wachovia 6 loans with final maturity dates in April 2017, and the JP Morgan Chase Marriott Fremont loan with a final maturity date in August 2019.  The mortgage loans were refinanced through one new mortgage loan, totaling $450 million, with a two-year initial term and four one-year extension options, subject to the satisfaction of certain conditions.   The new loan is interest only, provides for a floating interest rate of LIBOR + 4.55%, and contains flexible release provisions for the potential sale of assets.  The next non-extendable debt maturity for the Company is a $16 million loan that matures in June 2017.

 

Subsequent to quarter end, on October 13, 2016, the Company announced that it had priced its underwritten public offering of 6,200,000 shares of 7.375% Series G Cumulative Preferred Stock at $25.00 per share. Dividends on the Series G Preferred Stock will accrue at a rate of 7.375% per annum on the liquidation preference of $25.00 per share.

 

SELECT-SERVICE HOTEL PORTFOLIO SALES PROCESS UPDATE

 

During the quarter and subsequent to quarter end, the Company closed on the sales of the 124-room Hampton Inn & Suites in Gainesville, FL for approximately $27 million in cash ($218,000 per key), the 162-room SpringHill Suites Gaithersburg in Gaithersburg, MD for approximately $13.2 million ($81,000 per key), and the

 

 

AHT Reports Third Quarter Results

Page 3

November 3, 2016

 

two-hotel portfolio comprised of the 151-room Courtyard Palm Desert and the 130-room Residence Inn Palm Desert for $36 million ($128,000 per key).  Since the announcement of the strategy, the Company has closed on approximately $218 million of sales of its non-core, select-service hotels.

 

PORTFOLIO REVPAR

 

As of September 30, 2016, the portfolio consisted of direct hotel investments with 126 properties.  During the third quarter of 2016, 108 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 126 hotels) and comparable not under renovation basis (108 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 increased 3.4% to $122.76 for all hotels on a 2.8% increase in ADR and a 0.5% increase in occupancy

·                  Comparable RevPAR increased 4.4% to $126.11 for hotels not under renovation on a 3.0% increase in ADR and a 1.4% increase 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 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 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 126 hotels are provided in the table attached to this release.

 

COMMON STOCK DIVIDEND

 

On September 15, 2016, 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, 2016, payable on October 17, 2016, to shareholders of record as of September 30, 2016.

 

“We are pleased with our portfolio performance this quarter which speaks to the quality and diversity of our portfolio as well as our superior asset management capabilities,” commented Monty J. Bennett, Ashford Trust’s Chairman and Chief Executive Officer.  “Additionally, during the quarter and subsequent to quarter end, we made solid progress on the sale of our non-core, select-service hotels as well as completing the refinancing of four mortgage loans last month which addressed the vast majority of our 2017 debt maturities.  We are committed to maximizing value for our shareholders by focusing on upper-upscale, full-service hotels, generating superior operating performance and pursuing opportunities to sell additional select-service assets.”

 

INVESTOR CONFERENCE CALL AND SIMULCAST

 

Ashford Hospitality Trust, Inc. will conduct a conference call on Friday, November 4, 2016, at 11:00 a.m. ET.  The number to call for this interactive teleconference is (719) 325-2454. A replay of the conference call will be available through Friday, November 11, 2016, by dialing (719) 457-0820 and entering the confirmation number, 2119816.

 

The Company will also provide an online simulcast and rebroadcast of its third quarter 2016 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, November 4, 2016, beginning at 11:00 a.m. ET.  The online replay will follow shortly after the call and continue for approximately one year.

 

 

AHT Reports Third Quarter Results

Page 4

November 3, 2016

 

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 EBITDA.  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 EBITDA 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 EBITDA 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 in upper upscale, full-service hotels.

 

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

 

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 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:  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 Ashford Trust’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)

(unaudited)

 

		September 30,			December 31,
		2016			2015
ASSETS
Investments in hotel properties, net		$	4,187,939		$	4,419,684
Cash and cash equivalents		256,421			215,078
Restricted cash		149,865			153,680
Accounts receivable, net of allowance of $722 and $715, respectively		61,019			40,438
Inventories		4,776			4,810
Note receivable, net of allowance of $6,739 and $7,083, respectively		3,906			3,746
Investment in Ashford Inc.		5,657			6,616
Investment in securities investment fund		52,675			55,952
Deferred costs, net		2,974			3,847
Prepaid expenses		23,188			12,458
Derivative assets, net		7,851			3,435
Other assets		15,212			10,647
Intangible assets, net		9,294			11,343
Due from Ashford Prime OP, net		—			528
Due from third-party hotel managers		15,672			22,869
Assets held for sale		43,295			—
Total assets		$	4,839,744		$	4,965,131
LIABILITIES AND EQUITY
Liabilities:
Indebtedness, net		$	3,728,645		$	3,840,617
Accounts payable and accrued expenses		150,119			123,444
Dividends payable		22,547			22,678
Unfavorable management contract liabilities		1,873			3,355
Due to Ashford Inc., net		10,240			9,856
Due to Ashford Prime OP, net		7			—
Due to related party, net		831			1,339
Due to third-party hotel managers		2,737			2,504
Intangible liabilities, net		16,224			16,494
Other liabilities		16,691			14,539
Liabilities related to assets held for sale		25,982			—
Total liabilities		3,975,896			4,034,826
Redeemable noncontrolling interests in operating partnership		118,926			118,449
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, 2016 and December 31, 2015		17			17
Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at September 30, 2016 and December 31, 2015		95			95
Series E Cumulative Preferred Stock, 0 and 4,630,000 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		—			46
Series F Cumulative Preferred Stock, 4,800,000 and 0 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		48			—
Common stock, $0.01 par value, 200,000,000 shares authorized, 96,178,680 and 95,470,903 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		962			955
Additional paid-in capital		1,605,978			1,597,194
Accumulated deficit		(862,932		)	(787,221		)
Total stockholders’ equity of the Company		744,168			811,086
Noncontrolling interest in consolidated entities		754			770
Total equity		744,922			811,856
Total liabilities and equity		$	4,839,744		$	4,965,131

 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2016			2015			2016			2015
REVENUE
Rooms		$	300,875		$	294,768		$	917,396		$	787,428
Food and beverage		56,206			55,210			188,467			159,528
Other		14,389			14,097			43,213			35,402
Total hotel revenue		371,470			364,075			1,149,076			982,358
Other		461			441			1,297			1,731
Total revenue		371,931			364,516			1,150,373			984,089
EXPENSES
Hotel operating expenses
Rooms		65,474			65,402			195,769			169,290
Food and beverage		41,086			40,570			129,606			108,891
Other expenses		114,377			112,759			347,126			295,936
Management fees		13,616			13,324			42,191			36,366
Total hotel operating expenses		234,553			232,055			714,692			610,483
Property taxes, insurance and other		17,172			17,997			55,077			47,167
Depreciation and amortization		60,170			58,741			182,411			149,221
Impairment charges		4,922			(111		)	4,695			19,623
Transaction costs		124			392			201			5,850
Advisory services fee:
Base advisory fee		8,576			8,701			25,842			25,217
Reimbursable expenses		1,485			1,619			4,550			4,820
Non-cash stock/unit-based compensation		1,887			468			4,535			1,790
Corporate, general and administrative:
Non-cash stock/unit-based compensation		67			—			604			538
Other general and administrative		1,901			3,772			5,822			11,194
Total operating expenses		330,857			323,634			998,429			875,903
OPERATING INCOME		41,074			40,882			151,944			108,186
Equity in loss of unconsolidated entities		(560		)	(4,369		)	(4,432		)	(9,084		)
Interest income		92			21			229			67
Gain on acquisition of Highland JV and sale of hotel properties		1,448			—			24,428			380,705
Other income (expense)		(926		)	(314		)	(4,263		)	1,733
Interest expense, net of premiums		(50,113		)	(46,567		)	(150,167		)	(121,082		)
Amortization of loan costs		(5,649		)	(5,292		)	(18,000		)	(12,907		)
Write-off of loan costs and exit fees		(972		)	—			(4,913		)	(4,767		)
Unrealized gain on marketable securities		—			—			—			127
Unrealized gain (loss) on derivatives		(9,548		)	(2,750		)	4,248			(6,403		)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(25,154		)	(18,389		)	(926		)	336,575
Income tax benefit (expense)		16			(1,721		)	(1,216		)	(4,635		)
INCOME (LOSS) FROM CONTINUING OPERATIONS		(25,138		)	(20,110		)	(2,142		)	331,940
Gain on sale of hotel properties, net of tax		—			599			—			599
NET INCOME (LOSS)		(25,138		)	(19,511		)	(2,142		)	332,539
(Income) loss from consolidated entities attributable to noncontrolling interest		(16		)	(3		)	16			8
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership		5,009			3,193			2,745			(39,616		)
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		(20,145		)	(16,321		)	619			292,931
Preferred dividends		(8,875		)	(8,490		)	(25,856		)	(25,471		)
Extinguishment of issuance costs upon redemption of Series E preferred stock		(6,124		)	—			(6,124		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(35,144	)	$	(24,811	)	$	(31,361	)	$	267,460
INCOME (LOSS) PER SHARE — BASIC AND DILUTED
Basic:
Net income (loss) attributable to common stockholders		$	(0.37	)	$	(0.26	)	$	(0.34	)	$	2.72
Weighted average common shares outstanding — basic		94,531			95,888			94,384			97,061
Diluted:
Net income (loss) attributable to common stockholders		$	(0.37	)	$	(0.26	)	$	(0.34	)	$	2.63
Weighted average common shares outstanding — diluted		94,531			95,888			94,384			115,560
Dividends declared per common share:		$	0.12		$	0.12		$	0.36		$	0.36

 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

(in thousands)

(unaudited)

 

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2016			2015			2016			2015
Net income (loss)		$	(25,138	)	$	(19,511	)	$	(2,142	)	$	332,539
(Income) loss from consolidated entities attributable to noncontrolling interest		(16		)	(3		)	16			8
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership		5,009			3,193			2,745			(39,616		)
Net income (loss) attributable to the Company		(20,145		)	(16,321		)	619			292,931
Interest income		(92		)	(21		)	(229		)	(67		)
Interest expense and amortization of premiums and loan costs, net		55,732			51,829			168,078			133,900
Depreciation and amortization		60,108			58,682			182,227			149,068
Income tax (benefit) expense		(16		)	1,721			1,216			4,635
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership		(5,009		)	(3,193		)	(2,745		)	39,616
Equity in loss of unconsolidated entities		85			437			959			4,204
Company’s portion of EBITDA of Ashford Inc.		165			680			(207		)	(13		)
Company’s portion of EBITDA of Ashford Prime		—			509			—			7,640
Company’s portion of EBITDA of Highland JV		—			—			—			11,982
EBITDA available to the Company and OP unitholders		90,828			94,323			349,918			643,896
Amortization of unfavorable contract liabilities		(543		)	(543		)	(1,629		)	(1,593		)
Impairment charges		4,922			(111		)	4,695			19,623
Gain on acquisition of Highland JV and sale of hotel properties		(1,448		)	(599		)	(24,428		)	(381,304		)
Write-off of loan costs and exit fees		972			—			4,913			4,767
Other (income) expense		926			314			4,263			(1,733		)
Transaction, acquisition and management conversion costs		778			1,963			1,422			11,552
Legal judgment and related legal costs		23			23			71			71
Unrealized gain on marketable securities		—			—			—			(127		)
Unrealized (gain) loss on derivatives		9,548			2,750			(4,248		)	6,403
Dead deal costs		30			320			331			567
Non-cash stock/unit-based compensation		2,185			468			5,511			2,328
Company’s portion of unrealized loss of unconsolidated entities and investment in securities investment fund		475			3,932			3,473			4,880
Company’s portion of adjustments to EBITDA of Ashford Inc.		793			528			2,929			3,184
Company’s portion of adjustments to EBITDA of Ashford Prime		—			582			—			738
Adjusted EBITDA available to the Company and OP unitholders		$	109,489		$	103,950		$	347,221		$	313,252

 

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						Nine Months Ended
		September 30,						September 30,
		2016			2015			2016			2015
Net income (loss)		$	(25,138	)	$	(19,511	)	$	(2,142	)	$	332,539
(Income) loss from consolidated entities attributable to noncontrolling interest		(16		)	(3		)	16			8
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership		5,009			3,193			2,745			(39,616		)
Preferred dividends		(8,875		)	(8,490		)	(25,856		)	(25,471		)
Extinguishment of issuance costs upon redemption of Series E preferred stock		(6,124		)	—			(6,124		)	—
Net income (loss) attributable to common stockholders		(35,144		)	(24,811		)	(31,361		)	267,460
Depreciation and amortization on real estate		60,108			58,682			182,227			149,068
Gain on acquisition of Highland JV and sale of hotel properties		(1,448		)	(599		)	(24,428		)	(381,304		)
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership		(5,009		)	(3,193		)	(2,745		)	39,616
Equity in loss of unconsolidated entities		85			437			959			4,204
Impairment charges on real estate		5,039			—			5,039			19,949
Company’s portion of FFO of Ashford Inc.		(85		)	372			(597		)	(619		)
Company’s portion of FFO of Ashford Prime		—			63			—			4,371
Company’s portion of FFO of Highland JV		—			—			—			3,791
FFO available to common stockholders and OP unitholders		23,546			30,951			129,094			106,536
Extinguishment of issuance costs upon redemption of Series E preferred stock		6,124			—			6,124			—
Write-off of loan costs and exit fees		972			—			4,913			4,767
Other impairment charges		(117		)	(111		)	(344		)	(326		)
Other (income) expense		926			314			4,263			(1,733		)
Transaction, acquisition and management conversion costs		778			1,963			1,422			11,552
Legal judgment and related legal costs		23			23			71			71
Unrealized gain on marketable securities		—			—			—			(127		)
Unrealized (gain) loss on derivatives		9,548			2,750			(4,248		)	6,403
Dead deal costs		30			320			331			567
Non-cash stock/unit-based compensation		2,185			468			5,511			2,328
Company’s portion of unrealized loss of unconsolidated entities and investment in securities investment fund		475			3,932			3,473			4,880
Company’s portion of adjustments to FFO of Ashford Inc.		793			(484		)	2,929			(498		)
Company’s portion of adjustments to FFO of Ashford Prime		—			573			—			593
Adjusted FFO available to common stockholders and OP unitholders		$	45,283		$	40,699		$	153,539		$	135,013
Adjusted FFO per diluted share available to common stockholders and OP unitholders		$	0.40		$	0.35		$	1.35		$	1.16
Weighted average diluted shares		114,303			115,012			113,788			116,000

 

 

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

SUMMARY OF INDEBTEDNESS

September 30, 2016

(dollars in thousands)

(unaudited)

 

															Comparable			Comparable
						Fixed-Rate			Floating-Rate			Total			TTM Hotel			TTM EBITDA
Indebtedness		Maturity		Interest Rate		Debt			Debt			Debt			EBITDA (8)			Debt Yield
Secured revolving credit facility - various		October 2016		Base Rate (6) + 2.00% or LIBOR + 3.00%		$	—		$	—	(5)	$	—		$	N/A		N/A
BAML Pool 1 & 2 - 8 hotels		January 2017		LIBOR + 4.95%		—			376,800		(2)	376,800			44,436			11.8	%
Morgan Stanley MIP - 5 hotels		February 2017		LIBOR + 4.75%		—			200,000		(1) (7)	200,000			23,920			12.0	%
Cantor Commercial Real Estate Memphis - 1 hotel		April 2017		LIBOR + 4.95%		—			33,300		(2)	33,300			3,699			11.1	%
Column Financial - 24 hotels		April 2017		LIBOR + 4.39%		—			1,070,560		(3)	1,070,560			116,660			10.9	%
Wachovia 1 - 5 hotels		April 2017		5.95%		109,087		(11)	—			109,087			17,355			15.9	%
Wachovia 2 - 7 hotels		April 2017		5.95%		119,341		(11)	—			119,341			18,112			15.2	%
Wachovia 6 - 5 hotels		April 2017		5.95%		149,197		(11)	—			149,197			19,263			12.9	%
JPM Lakeway - 1 hotel		May 2017		LIBOR + 5.10%		—			25,100		(2)	25,100			2,193			8.7	%
BAML Le Pavillon - 1 hotel		June 2017		LIBOR + 5.10%		—			43,750		(2)	43,750			2,830			6.5	%
US Bank Indigo Atlanta - 1 hotel		June 2017		5.98%		15,800			—			15,800			2,141			13.6	%
Morgan Stanley - 8 hotels		July 2017		LIBOR + 4.09%		—			144,000		(2)	144,000			12,543			8.7	%
Morgan Stanley Ann Arbor - 1 hotel		July 2017		LIBOR + 4.15%		—			35,200		(2)	35,200			4,060			11.5	%
BAML W Atlanta - 1 hotel		July 2017		LIBOR + 5.10%		—			40,500		(2)	40,500			4,937			12.2	%
Morgan Stanley Pool A - 7 hotels		August 2017		LIBOR + 4.35%		—			301,000		(10)	301,000			38,566			12.8	%
Morgan Stanley Pool B - 4 hotels		August 2017		LIBOR + 4.38%		—			52,530		(10)(9)	52,530			6,861			13.1	%
JPM Chase Marriott Fremont - 1 hotel		August 2017		LIBOR + 4.20%		—			37,500		(10)(11)	37,500			8,382			22.4	%
BAML Pool - 17 hotels		December 2017		LIBOR + 5.52%		—			412,500		(3)	412,500			48,682			11.8	%
Morgan Stanley Boston Back Bay - 1 hotel		January 2018		4.38%		96,644			—			96,644			14,519			15.0	%
Morgan Stanley Princeton/Nashville - 2 hotels		January 2018		4.44%		105,551			—			105,551			28,871			27.4	%
NorthStar HGI Wisconsin Dells - 1 hotel		August 2018		LIBOR + 4.95%		—			12,000		(4)	12,000			1,602			13.4	%
Omni American Bank Ashton - 1 hotel		July 2019		4.00%		5,460			—			5,460			1,017			18.6	%
GACC Gateway - 1 hotel		November 2020		6.26%		97,278			—			97,278			15,276			15.7	%
Deutsche Bank W Minneapolis - 1 hotel		May 2023		5.46%		54,903			—			54,903			6,731			12.3	%
GACC Jacksonville RI - 1 hotel		January 2024		5.49%		10,417			—			10,417			1,624			15.6	%
GACC Manchester RI - 1 hotel		January 2024		5.49%		7,138			—			7,138			1,344			18.8	%
Key Bank Manchester CY - 1 hotel		May 2024		4.99%		6,668			—			6,668			946			14.2	%
Morgan Stanley Pool C1 - 3 hotels		August 2024		5.20%		67,391			—			67,391			8,456			12.5	%
Morgan Stanley Pool C2 - 2 hotels		August 2024		4.85%		12,471			—			12,471			2,370			19.0	%
Morgan Stanley Pool C3 - 3 hotels		August 2024		4.90%		24,922			—			24,922			3,650			14.6	%
BAML Pool 3 - 3 hotels		February 2025		4.45%		53,443			—			53,443			8,531			16.0	%
BAML Pool 4 - 2 hotels		February 2025		4.45%		23,850			—			23,850			3,536			14.8	%
BAML Pool 5 - 2 hotels		February 2025		4.45%		20,662			—			20,662			3,014			14.6	%
Unencumbered hotels						—			—			—			3,173			N/A
						$	980,223		$	2,784,740		$	3,764,963		$	479,300		12.7	%
Percentage						26.0		%	74.0		%	100.0		%
Weighted average interest rate						5.37		%	5.20		%	5.25		%

 

All indebtedness is non-recourse with the exception of the secured revolving credit facility.

 

(1) The interest rate on this mortgage loan is subject to a LIBOR floor of 0.20%.

(2) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

(3) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions.

(4) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.

(5) Our borrowing capacity under our secured revolving credit facility is $100.0 million.

(6) Base rate, as defined in the secured revolving credit facility agreement is the greater of (i) the prime rate set by Bank of America, (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(7) This mortgage loan has three one-year extension options subject to satisfaction of certain conditions, of which the first was exercised in February 2016.

(8) See Exhibit 1 for reconciliation of net income (loss) to hotel EBITDA.

(9) This loan had a $10.4 million pay down of principal related to the Springhill Suites Gaithersburg.

(10) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in August 2016.

(11) Subsequent to quarter end, these loans were refinanced with a new $450 million mortgage loan with an interest rate of LIBOR + 4.55% and a two-year intial term with four one-year extension options, subject to satisfaction of certain conditions.