Ashford Hospitality Trust Reports Fourth Quarter Results and Reinstates Quarterly Dividend of $.10 Per Share
|
|
Ashford Hospitality Trust Reports Fourth Quarter Results and Reinstates Quarterly Dividend of $.10 Per Share
|
Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2011-02-25
Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the fourth quarter ended December 31, 2010. The proforma performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) include the Company's 97 hotels owned and included in continuing operations as of December 31, 2010. Unless otherwise stated, all reported results compare the fourth quarter ended December 31, 2010, with the fourth quarter ended December 31, 2009 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.
FINANCIAL HIGHLIGHTS
RevPAR increased 7.5% for the hotels not under renovation
Operating profit margin increased 384 basis points for the hotels not under renovation
Net loss attributable to common shareholders was $111.5 million, or $2.17 per diluted share, compared with net loss attributable to common shareholders of $76.9 million, or $1.30 per diluted share, in the prior-year quarter
Adjusted funds from operations (AFFO) was $0.40 per diluted share for the quarter
Adjusted funds from operations (AFFO) was $1.50 per diluted share for the entire year
Net debt to gross assets ratio improved to 55.0% compared with 59.0% a year ago
Fixed charge coverage ratio was 1.70x under the senior credit facility covenant versus a required minimum of 1.25x
Reinstates common stock quarterly dividend at $0.10 per share, or $0.40 per share annualized rate
CAPITAL ALLOCATION
Capex invested in the quarter was $15.7 million and $62.2 million year to date
IMPAIRMENTS
During the fourth quarter due to assets being marketed for sale, the Company recorded impairments of $39.9 million for the Hilton Tucson and $23.6 million for the Hilton Rye Town. Also the Company took impairments of $21.6 million for its JER portfolio mezzanine loan six position and an impairment of $7.8 million for a partial write down of the Tharaldson portfolio mezzanine loan maturing in April 2011. In addition, the Company received in the fourth quarter a $4.4 million payoff of its mezzanine loan secured by interests in the Hotel La Jolla, which when combined with a payment of $1.8 million in the third quarter of 2010, resulted in a discounted payoff of 87.5%.
CAPITAL STRUCTURE
In October 2010, the Company converted its $1.8 billion interest rate swap to a fixed rate of 4.09%, resulting in locked-in annual interest expense savings of approximately $32 million for the remaining term of the swap. There was no cash cost to the Company in structuring the swap, and the Company's flooridors for 2010 and 2011, remained outstanding, the latter of which may provide additional benefit.
In November 2010, the Company closed a $105 million loan with Deutsche Bank secured by the Marriott Crystal Gateway in Arlington, VA. The new financing, which has a 10-year term and a fixed interest rate of 6.26%, replaced an existing $60.8 million loan on the property that had an initial maturity date in March 2012 and had an interest rate of 400 basis points over LIBOR. The excess loan proceeds were used to pay down the Company’s credit facility and for general corporate purposes.
In December 2010, the Company closed its underwritten public offering of 7.5 million shares of its common stock at a price to the public of $9.65 per share. In January 2011, the underwriter exercised its option to purchase an additional 300,000 shares of common stock at $9.65 per share. The proceeds were used for general corporate purposes.
PORTFOLIO REVPAR
As of December 31, 2010, the Company had a portfolio of direct hotel investments consisting of 97 properties classified in continuing operations. During the fourth quarter, 80 of the hotels included in continuing operations were not under renovation. The Company believes reporting its operating metrics for continuing operations on a proforma total basis (all 97 hotels) and proforma not-under-renovation basis (80 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its direct hotel portfolio. The Company's reporting by region and brand includes the results of all 97 hotels in continuing operations. Details of each category are provided in the tables attached to this release.
Proforma RevPAR increased 7.5% for hotels not under renovation on a 0.5% increase in ADR to $117.07 and a 429 basis point increase in occupancy
Proforma RevPAR increased 5.3% for all hotels on a 0.2% increase in ADR to $122.80 and a 324 basis point increase in occupancy
HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
For the 80 hotels as of December 31, 2010, that were not under renovation, Proforma Hotel EBITDA increased 23.5% to $42.8 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 384 basis points to 27.2%. For all 97 hotels included in continuing operations as of December 31, 2010, Proforma Hotel EBITDA increased 14.7% to $60.7 million and Hotel EBITDA margin increased 256 basis points to 26.9%.
Ashford believes year-over-year Hotel EBITDA and 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 Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and certain prior-year periods based upon the number of core hotels in the portfolio as of the end of the current period. As Ashford’s portfolio mix changes from time to time so will the seasonality for Proforma Hotel EBITDA and Proforma Hotel EBITDA margin. The details of the quarterly calculations for the previous four quarters for the current portfolio of 97 hotels included in continuing operations are provided in the tables attached to this release.
COMMON STOCK DIVIDEND REINSTATED
Ashford announced that the Board of Directors has declared a dividend on the Company’s common stock for the first quarter of 2011 of $0.10 per share and has given guidance that while each future quarter’s dividend, if any, will be definitively announced near the end of each quarter, the Company intends to maintain at least a $.10 per share dividend per quarter going forward. The dividend is payable on April 15, 2011, to shareholders of record as of March 31, 2011, and equates to an annualized yield of 4.1% based on today’s closing stock price.
Monty J. Bennett, Chief Executive Officer, commented, “The strong results for the fourth quarter continue to reflect the benefit of an improving lodging market and our ability to achieve better margin improvement through differentiated asset management strategies. Combined with our opportunistic capital market activities, we have been able to position our portfolio for better performance.”
INVESTOR CONFERENCE CALL AND SIMULCAST
Ashford Hospitality Trust, Inc. will conduct a conference call on Friday, February 25, 2011, at 11 a.m. ET. The number to call for this interactive teleconference is (212) 231-2906. A replay of the conference call will be available through Thursday, March 3, 2011, by dialing (402) 977-9140 and entering the confirmation number, 21508722.
The Company will also provide an online simulcast and rebroadcast of its fourth quarter 2010 earnings release conference call. The live broadcast of Ashford's quarterly conference call will be available online at the Company's website at www.ahtreit.com on Friday, February 25, 2011, beginning at 11 a.m. ET. The online replay will follow shortly after the call and continue for approximately one year.
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 Operating Profit. 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 Operating Profit 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 Operating Profit 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 self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, second mortgages, mezzanine loans and sale-leaseback transactions. Additional information can be found on the Company's web site at www.ahtreit.com.
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.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 forward-looking statements include, but are not limited to, the timing for closing, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures.Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford's control.
|
|
