Ja nua ry 2018
F or war d L ooking State me nts and Non- GAAP Me asur e s I n ke e ping with the SE C's "Sa fe Ha rb o r" g uide line s, c e rta in sta te me nts ma de during this pre se nta tio n c o uld b e c o nside re d fo rwa rd-lo o king a nd sub je c t to c e rta in risks a nd unc e rta intie s tha t c o uld c a use re sults to diffe r ma te ria lly fro m tho se pro je c te d. 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, pro je c te d o pe ra ting re sults, a nd pro je c te d c a pita l e xpe nditure s. 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 a nd the ma rke t pric e o f o ur c o mmo n sto c k; c ha ng e s in o ur b usine ss o r inve stme nt stra te g y; a va ila b ility, te rms a nd de plo yme nt o f c a pita l; a va ila b ility o f q ua lifie d pe rso nne l; c ha ng e s in o ur industry a nd the ma rke t in whic h we o pe ra te , inte re st ra te s o r the g e ne ra l e c o no my, a nd the de g re e a nd na ture o f o ur c o mpe titio n. T he se a nd o the r risk fa c to rs a re mo re fully disc usse d in the c o mpa ny's filing s with the Se c uritie s a nd E xc ha ng e Co mmissio n. 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 o r de b t a mo unt. 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 o r in the a ppe ndix to this pre se nta tio n. T he c a lc ula tio n o f implie d e q uity va lue is de rive d fro m a n e stima te d b le nde d c a pita liza tio n ra te (“Ca p Ra te ”) fo r the e ntire po rtfo lio using the c a pita liza tio n ra te me tho d. T he e stima te d Ca p Ra te is b a se d o n re c e nt Ca p Ra te s o f pub lic a lly tra de d pe e rs invo lving a simila r b le nd o f a sse t type s fo und in the po rtfo lio , whic h is the n a pplie d to Ne t Ope ra ting I nc o me (“NOI ”) o f the c o mpa ny’ s a sse ts to c a lc ula te a T o ta l E nte rprise Va lue (“T E V”) o f the c o mpa ny. F ro m the T E V, we de duc t de b t a nd pre fe rre d e q uity a nd the n a dd b a c k wo rking c a pita l a nd the c o mpa ny’ s inve stme nt in Ashfo rd I nc . to de rive a n e q uity va lue . T he c a pita liza tio n ra te me tho d is o ne o f se ve ra l va lua tio n me tho ds fo r e stima ting a sse t va lue a nd implie d e q uity va lue . Amo ng the limita tio ns o f using the c a pita liza tio n ra te me tho d fo r de te rmining a n implie d e q uity va lue a re tha t it do e s no t ta ke into a c c o unt the po te ntia l c ha ng e o r va ria b ility in future c a sh flo ws, po te ntia l sig nific a nt future c a pita l e xpe nditure s, the inte nde d ho ld pe rio d o f the a sse t, o r a c ha ng e in the future risk pro file o f a n a sse t. 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 Ho spita lity Prime , I nc . 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. Company Presentation // January 2018 2
Manage me nt T e am R ICHARD J. S T ON OCKT J E MY J. W E R D E RIC S. E UBANKS , CF A RE L T E Chie f E xe c utive Offic e r & E VP o f Asse t Manag e me nt Chie f F inanc ial Offic e r Pre side nt 12 ye ar 20 ye ar 17 ye ar s of hospitality s of hospitality s of hospitality e xpe r ie nc e e xpe r ie nc e e xpe r ie nc e 7 ye ar 1 ye ar 14 ye ar s with Ashfor d (5 ye ar s with Ashfor d s with Ashfor d with Ashfor d pr e de c e ssor ) 15 ye ar 3 ye ar s with Mor gan Stanle y s with ClubCor p 5 ye ar s with Ste phe ns Cor CF ne ll Sc hool of Hote l A c har te r holde r Inve stme nt Bank Administr ation, BS Southe r Oklahoma State Unive r n Me thodist Unive r sity sity BS Unive r sity of Pe nnsylvania BBA MBA Company Presentation // January 2018 3
Str ate gic Ove r vie w F oc use d str a te g y of inve sting in luxur y hote ls a nd r e sor ts Ba rde ssono Hote l & Spa Yountville , CA Gr ow or g a nic a lly thr oug h str ong r e ve nue a nd c ost c ontr ol initia tive s Gr ow e xte r na lly thr oug h a c c r e tive a c quisitions of hig h qua lity a sse ts Pie r House Re sort Ke y We st, F L T a r g e ts c onse r va tive le ve r a g e of Ne t De bt / Gr oss Asse ts of 45% with non-r e c our se pr ope r ty de bt T he Ritz- Ca rlton St. T homa s St. T ho mas, USVI Hig hly-a lig ne d ma na g e me nt te a m a nd a dvisor y str uc tur e Company Presentation // January 2018 4
Q3 E ar nings Highlights Comparable RevPAR for all hotels decreased 5.3% to $211.36 during Q3 • Comparable RevPAR for all hotels not under renovation decreased 2.9% to $204.72 • during Q3 Comparable Hotel EBITDA flow-through for all hotels was 72% for Q3 • Comparable Hotel EBITDA margin was 30.6% • Adjusted funds from operations (AFFO) was $0.37 per diluted share for Q3 as compared • with $0.38 per diluted share from the prior-year quarter Adjusted EBITDA was $26.0 million for Q3 reflecting 18.3% growth over the prior year • quarter Adjusted EBITDA margin was 25.5% (adjusted for Hilton JV revenue) • Capex invested during Q3 was $11 million • Q UAR Y D IVIDE ND PE R S HAR E AF F O PE R S HAR E R V PAR G R H T E R L E OWT $0.60 $2.00 15.0% $2.00 10.0% $0.50 $0.34 $0.34 $1.50 $1.50 $0.22 5.0% $0.22 $0.40 $0.12 $0.16 $0.38 $0.38 $0.21 $0.37 $0.21 $0.37 $0.39 0.0% $0.39 $0.30 $1.00 $1.00 $0.10 $0.12 $0.42 $0.42 $0.16 -5.0% $0.50 $0.50 $0.20 $0.60 $0.60 $0.10 $0.05 $0.60 $0.60 $0.12 $0.50 $0.50 $0.05 $0.45 -10.0% $0.45 $0.10 $0.10 $0.05 $0.16 $0.46 $0.46 $0.38 $0.38 $0.10 $0.26 $0.26 $0.05 $0.05 $0.18 $0.18 $0.00 $0.00 $0.00 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 5 Company Presentation // January 2018
Re c e nt De ve lopme nts $105M $145.5M $96.5M Announc e d Common Announc e d Stoc kholde r s Announc e d Re fine d E quity & Ac quisition of Pr og r e ss on Ac quisition of Appr ove Pr og r e ss on Str a te g y & Conve r tible Pa r k Hya tt Non- Cor e Hote l Ame ndme nt Non- Cor e Ame ndme nt Pr e fe r r e d Be a ve r Cr e e k to Advisor y Hote ls Hote ls Yountville to Advisor y E quity Ra ise Ag r e e me nt Str a te g y #1 Str a te g y #2 Ag r e e me nt M AR 2017 N OV 2017 J AN 2017 M AR 2017 M AY 2017 J UN 2017 J UN 2017 Re fine d Str ate gy Cour tyar d Philade lphia P ARK H YAT B E R C RE K T AVE E L uxury fo c us Upb ra nding to Auto g ra ph Inc re a se divide nd b y 33% to $0.16 Co lle c tio n b y Ma rrio tt 45% Ne t De b t / Gro ss Asse ts Cour tyar d San F r anc isc o 10%-15% o f g ro ss de b t in c a sh o n- ha nd Upb ra nding to Auto g ra ph Co lle c tio n b y Ma rrio tt Ide ntifie d no n-c o re ho te ls stra te g y Ame nde d Advisor y Agmt Mar r iott Plano L e gac y H OT Y OUNT E E L VIL L Re mo val o f 1.1x multiple a nd ta x So ld 11/ 1 fo r $104MM g ro ss up Cha ng e in ma jo rity no lo ng e r T ampa Re naissanc e trig g e rs te rmina tio n fe e L iste d fo r sa le Pa yme nt o f $5 millio n to Ashfo rd Inc . $207 $212 $217 $223 #1 (1) F Y16 R V PAR (1) Q1 17 R V PAR (1) Q2 17 R V PAR Q3 17 R V PAR (1),(2) R V PAR L R E E E E E E ADE (1) T T M c o mpa ra b le Re vPAR a s re po rte d 6 Company Presentation // January 2018 (2) Pro fo rma fo r sa le o f Ma rrio tt Pla no L e g a c y
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