Co mpa ny Pre se nta tio n – No ve mb e r 2016
Ce rta in Disc lo sure s Ce rta in sta te me nts a nd a ssumptio ns in this pre se nta tio n c o nta in o r a re b a se d upo n “fo rwa rd-lo o king ” info rma tio n a nd a re b e ing ma de pursua nt to the sa fe ha rb o r pro visio ns o f the Priva te Se c uritie s L itig a tio n Re fo rm Ac t o f 1995. T he se fo rwa rd-lo o king sta te me nts a re sub je c t to risks a nd unc e rta intie s. Whe n we use the wo rds “will like ly re sult,” “ma y,” “a ntic ipa te ,” “e stima te ,” “sho uld,” “e xpe c t,” “b e lie ve ,” “inte nd,” o r simila r e xpre ssio ns, we inte nd to ide ntify fo rwa rd-lo o king sta te me nts. Suc h fo rwa rd-lo o king sta te me nts inc lude , b ut a re no t limite d to , o ur b usine ss a nd inve stme nt stra te g y, o ur unde rsta nding o f o ur c o mpe titio n, c urre nt ma rke t tre nds a nd o ppo rtunitie s, a nd pro je c te d c a pita l e xpe nditure s. Suc h sta te me nts a re sub je c t to nume ro us a ssumptio ns a nd unc e rta intie s, ma ny o f whic h a re o utside o f o ur c o ntro l. T he se fo rwa rd-lo o king sta te me nts a re sub je c t to kno wn a nd unkno wn risks a nd unc e rta intie s, whic h c o uld c a use a c tua l re sults to diffe r ma te ria lly fro m tho se a ntic ipa te d, inc luding , witho ut limita tio n: g e ne ra l vo la tility o f the c a pita l ma rke ts, the g e ne ra l e c o no my o r the ho spita lity industry, whe the r the re sult o f ma rke t e ve nts o r o the rwise ; o ur a b ility to de plo y c a pita l a nd ra ise a dditio na l c a pita l a t re a so na b le c o sts to re pa y de b ts, inve st in o ur pro pe rtie s a nd fund future a c q uisitio ns; una ntic ipa te d inc re a se s in fina nc ing a nd o the r c o sts, inc luding a rise in inte re st ra te s; the de g re e a nd na ture o f o ur c o mpe titio n; a c tua l a nd po te ntia l c o nflic ts o f inte re st with Ashfo rd Ho spita lity T rust, I nc ., Ashfo rd Ho spita lity Adviso rs, L L C (“Ashfo rd L L C”), Ashfo rd I nc ., Re ming to n L o dg ing & Ho spita lity, L L C, o ur e xe c utive o ffic e rs a nd o ur no n-inde pe nde nt dire c to rs; o ur a b ility to imple me nt a nd e xe c ute o n pla nne d initia tive s a nno unc e d in c o nne c tio n with the c o nc lusio n o f o ur inde pe nde nt dire c to rs’ stra te g ic re vie w pro c e ss; c ha ng e s in pe rso nne l o f Ashfo rd L L C o r the la c k o f a va ila b ility o f q ua lifie d pe rso nne l; c ha ng e s in g o ve rnme nta l re g ula tio ns, a c c o unting rule s, ta x ra te s a nd simila r ma tte rs; le g isla tive a nd re g ula to ry c ha ng e s, inc luding c ha ng e s to the I nte rna l Re ve nue Co de a nd re la te d rule s, re g ula tio ns a nd inte rpre ta tio ns g o ve rning the ta xa tio n o f re a l e sta te inve stme nt trusts (“RE I T s”); a nd limita tio ns impo se d o n o ur b usine ss a nd o ur a b ility to sa tisfy c o mple x rule s in o rde r fo r us to q ua lify a s a RE I T fo r U.S. fe de ra l inc o me ta x purpo se s. T he se a nd o the r risk fa c to rs a re mo re fully disc usse d in the se c tio n e ntitle d “Risk F a c to rs” in o ur Annua l Re po rt o n F o rm 10-K , a nd fro m time to time , in o ur o the r filing s with the Se c uritie s a nd E xc ha ng e Co mmissio n (“SE C”). T he fo rwa rd-lo o king sta te me nts inc lude d in this pre se nta tio n a re o nly ma de a s o f the da te o f this pre se nta tio n. I nve sto rs sho uld no t pla c e undue re lia nc e o n the se fo rwa rd-lo o king sta te me nts. We a re no t o b lig a te d to pub lic ly upda te o r re vise a ny fo rwa rd-lo o king sta te me nts, whe the r a s a re sult o f ne w info rma tio n, future e ve nts o r c irc umsta nc e s, c ha ng e s in e xpe c ta tio ns o r o the rwise . E BI T DA is de fine d a s ne t inc o me b e fo re inte re st, ta xe s, de pre c ia tio n a nd a mo rtiza tio n. E BI T DA yie ld is de fine d a s tra iling twe lve mo nth E BI T DA divide d b y the purc ha se pric e . A c a pita liza tio n ra te is de te rmine d b y dividing the pro pe rty's ne t o pe ra ting inc o me b y the purc ha se pric e . Ne t o pe ra ting inc o me is the pro pe rty's funds fro m o pe ra tio ns minus a c a pita l e xpe nse re se rve o f e ithe r 4% o r 5% o f g ro ss re ve nue s. Ho te l E BI T DA flo w-thro ug h is the c ha ng e in Ho te l E BI T DA divide d b y the c ha ng e in to ta l re ve nue s. E BI T DA, F F O, AF F O, CAD a nd o the r te rms a re no n-GAAP me a sure s, re c o nc ilia tio ns o f whic h ha ve b e e n pro vide d in prio r e a rning s re le a se s a nd filing s with the SE C. T his o ve rvie w is fo r info rma tio na l purpo se s o nly a nd is no t a n o ffe r to se ll, o r a so lic ita tio n o f a n o ffe r to b uy o r se ll, a ny se c uritie s o f Ashfo rd Prime o r a ny o f its re spe c tive a ffilia te s, a nd ma y no t b e re lie d upo n in c o nne c tio n with the purc ha se o r sa le o f a ny suc h se c urity. 2
Ashfo rd Ho spita lity Prime F o c use d stra te g y o f T a rg e ts c o nse rva tive Hig hly-a lig ne d inve sting in luxury le ve ra g e le ve ls o f Ne t ma na g e me nt te a m ho te ls in re so rt a nd De b t/ E BI T DA o f 5.0x o r a nd a d viso ry g a te wa y ma rke ts le ss struc ture Simple a nd Gro w o rg a nic a lly Gro w pla tfo rm stra ig htfo rwa rd thro ug h stro ng thro ug h a c c re tive inve stme nt pro file re ve nue a nd c o st a c q uisitio ns o f hig h c o ntro l initia tive s q ua lity a sse ts T he Ritz- Ca rlton St. T homa s St. T ho mas, USVI Ba rde ssono Hote l & Spa Pie r House Re sort Yountville , CA Ke y We st, F L 3
E xc e lle nt Pro g re ss o n Stra te g ic Alte rna tive s WHAT WE SAID WE WOUL D DO WHAT WE HAVE DONE I I nc re a se divide nd nc re a se d divide nd 20% to $0.12 Co urtya rd Se a ttle so ld fo r $84.5 millio n Se ll up to 4 no n-stra te g ic ho te ls a t 6.8% T T M NOI c a p ra te L I iq uida te inve stme nt fund nve stme nt ha s b e e n re de e me d Sinc e April 8, 2016 we ha ve b o ug ht $50 millio n sto c k re purc ha se pro g ra m b a c k a ppro xima te ly 2.9 millio n sha re s fo r $39 millio n Adde d K Add 2 inde pe nde nt dire c to rs e n F e a rn a s a n inde pe nde nt dire c to r Appo inte d Ric ha rd J. Sto c kto n a s ne w Appo int ne w CE O CE O e ffe c tive No ve mb e r 14, 2016 4
Re c e nt Upda te s Q3 2016 Re vPAR inc re a se d 4.3% E xc e lle nt pro g re ss o n stra te g ic a lte rna tive s to e nha nc e sha re ho lde r va lue Sinc e c o nc lusio n o f stra te g ic a lte rna tive s re vie w in April 2016 Prime 's T o ta l Sha re ho lde r Re turn (T SR) o utpe rfo rma nc e ve rsus its pe e rs is 20.4%* Anno unc e d c o rpo ra te g o ve rna nc e e nha nc e me nts & a ppo intme nt o f ne w inde pe nde nt dire c to r Anno unc e d a ppo intme nt o f Ric ha rd J. Sto c kto n a s ne w CE O e ffe c tive No ve mb e r 14, 2016 5 *Pe r S NL as o f No ve mb e r 3, 2016
AHP L e a de rship Has De live r e d Re sults in Prude nt, Ac c re tive Gro wth Ac q uire d the Ritz-Ca rlto n St. T ho ma s, Ba rde sso no Ho te l & Spa , So fite l Chic a g o Ma g nific e nt Mile , & Pie r Ho use Re so rt ACCRE T IVE GROWT H OF I nc re a se d po rtfo lio Re vPAR sinc e spin-o ff b y o ve r 47% to $206 a s o f T T M HOT E L Se pte mb e r 2016 PORT F OL IO I nc re a se d a sse t b a se b y 50% sinc e spin-o ff $250.00 $206.17 $199.43 $200.00 $171.35 $148.64 $140.20 $150.00 $100.00 $50.00 $0.00 2012 2013 2014 2015 T T M 2016 6
AHP L e a de rship Has De live r e d Re sults in Re turning Ca pita l to Sha re ho lde rs Inc r e ase d quar te r ly c ommon divide nd by Attr ac tive E BIT DA flow- thr ough 140% sinc e spin- off pe r for manc e 100.0% $0.14 $0.12 77% $0.12 80.0% $0.10 63% $0.10 60.0% $0.08 $0.05 $0.06 40.0% $0.04 20.0% $0.02 $0.00 0.0% 2013 Q2 15 2016 Q1 16 YT D Q3 16 Disc ipline d Capital Str ate gie s We ig hte d Ave r a g e Inte r e st R a te De c r e a se d Re fina nc e d d e b t a t lo we r we ig hte d a ve ra g e 5.4% we ig hte d inte re st ra te s a ve r a g e 5.3% 5.2% inte r e st r a te by $72 millio n c o nve rtib le pre fe rre d e q uity ra ise a t 60 bps sinc e 5.0% 5.0% 2013 impr oving $18.90 c o nve rsio n pric e (53% pre mium to c urre nt 4.8% c a sh flow sto c k pric e a s o f No ve mb e r 3, 2016) 4.7% 4.6% 4.4% 2013 2014 2015 7
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