Company Presentation – March 2016
Certain Disclosures 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. 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. 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. Important Information Ashford Hospitality Prime, Inc. ("Ashford Prime") plans to file with the SEC and furnish to its stockholders a Proxy Statement in connection with its 2016 Annual Meeting, and advises its stockholders to read the Proxy Statement relating to the 2016 Annual Meeting when it becomes available, because it will contain important information. Stockholders may obtain a free copy of the Proxy Statement and other documents (when available) that Ashford Prime files with the SEC at the SEC's website at www.sec.gov. The Proxy Statement and these other documents may also be obtained for free from Ashford Prime by directing a request to Ashford Hospitality Prime, Inc., Attn: Investor Relations, 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254 or by calling (972) 490-9600. Certain Information Concerning Participants Ashford Prime, its directors and named executive officers may be deemed to be participants in the solicitation of Ashford Prime's stockholders in connection with its 2016 Annual Meeting. Stockholders may obtain information regarding the names, affiliations and interests of such individuals in Ashford Prime's proxy statement dated April 17, 2015, which is filed with the SEC. To the extent holdings of Ashford Prime's securities have changed since the amounts printed in the proxy statement, dated April 17, 2015, such changes have been reflected on Statements of Change in Ownership on Form 4 filed with the SEC. 2
Ashford Prime – Update Ashford Prime is under attack from what the Company believes is an irresponsible and inexperienced shareholder Ashford Prime’s operations have performed exceptionally well with 2015 RevPAR growth #1 amongst its peers The Ashford Prime Board is reviewing all possible strategic alternatives to maximize value for shareholders – including a sale, and initiated that process before Sessa's initial 13D filing The Company believes that Sessa has bungled every step of its engagement with the Company – including, for example, a failure to understand our contractual obligations or properly research our annual meeting date and bylaws The Company believes that now is not the time to hand over the keys to what the Company believes is an inexperienced shareholder and a slate of Directors with no relevant lodging experience The Company believes Sessa’s only actionable strategy is to subject shareholders to costly litigation If Sessa's purported slate is elected it could trigger a termination fee under the advisory agreement in the hundreds of millions of dollars 3
Maximizing Value is Our #1 Objective Acquired the Ritz-Carlton St. • Thomas, Bardessono Hotel & 7.3% RevPAR growth in 2015 - • Strong Spa, Sofitel Chicago, & Pier highest amongst peers Operating House Resort Accretively Increased dividend by 100% • Performance Grow Hotel Increased portfolio RevPAR since spin • Portfolio since spin-off by over 40% to $199 as of 12/31/15 Increased asset base by 50% • Bought back ~$30mm of stock • since spin-off at discount to NAV Since strategic alternatives • $164mm of cash & equivalents Disciplined • announcement AHP has been on hand Capital restricted from buybacks Conservative Strategies Target leverage of 5.0x net • Capital $65 million convertible • debt/EBITDA preferred equity raise at $18.90 Structure No 2016 debt maturities • conversion price All debt is non-recourse • Lower cost than if internally • managed Highest insider ownership • Benefits from scale through • amongst peers Highly Aligned affiliation with AHT Advisory Management Incentive fee based on AHP • Agreement Advisor is publicly traded • Team total return outperformance Announced key money • vs. its peers concept Fees not based on gross assets • 4
Strategic Alternatives Update After implementing several steps to improve value, in August of 2015, the Company announced a plan to explore a full range of strategic alternatives, including a possible sale of the Company Status Quo Independent directors engaged Deutsche Bank as financial advisor Sale of the PIPE Company Board is discussing all possible strategic alternatives to maximize Select Asset Management value for shareholders Sales Buyout The Company believes that shareholders Strategic Share would be best served by allowing the Board Combination Repurchases to finish the strategic review that it began before Sessa's initial 13D filing Special Dividend The current Board will decide upon the best route to maximize value for shareholders, and the Company believes Sessa will not have a better alternative based on its inability to articulate an actionable strategy to date 5 Note: Diagram includes non-exhaustive list.
Sessa Has Proposed No Plan To Maximize Value Sessa’s Proposals Negative Impacts х Could trigger termination fee in the hundreds of millions of dollars х The Company believes the election of Sessa's nominees could result in hostile relationship with advisor that would likely destroy value given Sessa's Replace Board through proxy litigation strategy contest х Removes highly qualified Board with long history of hospitality experience х Sessa's proposed slate has no relevant lodging experience and includes nominees with a history of aligning with activists х Sessa has articulated no actionable plan other than litigation х Sessa has not articulated any plan to maximize value х No actionable plan Based on its prior comments about a sale of the Company, Sessa may be seeking to make a quick profit on its estimated $13.43 cost basis х Sessa has no experience with investments in lodging or hotel market cycles 6
Sessa Has Proposed No Plan To Maximize Value (cont'd) Sessa’s Proposals Negative Impacts х Sessa has pursued litigation against the Company, the Board of Directors, and Ashford Inc. х Costly for shareholders х Distracting to Management and Board Litigation х We believe the existing Board is in a better position to negotiate with Ashford Inc. than a hostile slate from Sessa х The advisory agreement between Ashford Prime and Ashford Inc. is a contractual obligation 7
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