Ashford Hospitality Trust CEO Discusses Q3 2010 Results - Earnings Call Transcript
Ashford Hospitality Trust, Inc. (
)
Q3 2010 Earnings Conference Call
November, 04 2010 12:00 pm ET
Executives
Monty Bennett - Ashford Hospitality Trust, Inc. - CEO
David Kimichik - Ashford Hospitality Trust, Inc. - CFO and Treasurer
Tripp Sullivan – Investor Relations
Analysts
Smedes Rose - KBW
Will Marks - JMP Securities
Andrew Wittmann - Robert W. Baird
Presentation
Operator
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Ashford Hospitality Trust Inc. Q3 2009 Earnings Conference Call
Ashford Hospitality Trust, Inc third quarter 2010 earnings conference call, during the presentation all participants will be in a listen only mode. Afterwards we’ll conduct a question and answer session. At that time if you have a question please press the start followed by the four on your telephone. If at nay time during the conference you need to reach an operator please press star zero. As a reminder this conference is being recorded, Thursday, November 4th, 2010. I would now like to turn the conference over to Tripp Sullivan, Investor Relations. Please go ahead, sir.
Tripp Sullivan
Thank you, Myra, welcome to this Ashford Hospitality Trust conference call to review the company’s results for the third quarter of 2010. On the call today will be Monty Bennett, Chief Executive Officer and David Kimichik, Chief Financial Officer.
The results as well as notice and accessibility of this conference call are on a listen only basis over the internet and were released yesterday afternoon in a press release that has been covered by the financial media. As we start let me remind you that certain statements and assumptions in this conference call 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. Such forward-looking statements are subject to numerous assumptions, uncertainties and known or un-known risks which could cause actual results to differ materially from those anticipated.
These risk factors are more fully discussed in the section entitled risk factors and ask for the registration statement on form F-3 and other filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made until the date of this call and the company is not obligated to update or revise them. In addition through terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company’s earnings release and the company tables are scheduled which has been filed or maintained with the SEC on November 3rd, 2010 and may also be accessed through the company’s website at www.ahtreit.com.
Each listener is encouraged to review those reconciliations provided in the earnings release together.
Montgomery Bennett
Thank you, Tripp. Doug Kessler, our President, is on the road today and unfortunately couldn’t dial-in. I will offer some opening comments then turn it over to Kimo for a review of the financial highlights. I’ll then discuss our capital allocation strategies at the end of our call.
Kimo
As compared to our peers we have had time to take a different approach to our investment capital market strategies. We continue to demonstrate the platform comprised of a diverse portfolio and relentless focus on maximizing efforts, capital markets, ingenuity, and management interests closely aligned with shareholders and produce strong returns that outperform the competition. A clear indication of the success of our efforts is that our one, two, three, four, five and six year total shareholder returns exceed each of our peers. In fact for the most recent quarter we continue to (inaudible) strong year over year growth pace with an 83% increase in (inaudible) vote per share at $0.33. Once again that’s among the strongest growth reported today and for among our launching peers.
It’s also the highest per share (inaudible) in the third quarter since our inception and is a direct result of wealth to continue in the capital market and asset strategies. Turning to the performance of our portfolio we reported a 6.1% increase in rev par for hotels not under renovation in the quarter. APR was 7.7% and occupancy was up 372 basis points. That versus a 3.4% decline in APR in the second quarter. I think we can safely say the industry is beyond the recovery.
Strong complex performance has been accompanied by strong operating results. We are consistently focused on cost control and continue to in part this operating discipline on our managers and (inaudible) above 50% and drive growth in hotel EBITDA margin. For the hotels not under renovation EBITDA margin increased 192 basis points from a year ago to 25.6% while for all hotels EBITDA margin increased 173 basis points to 25.4%. Our affiliated manager, Remington, significantly contributed to these results. And we also had a strong contribution from the brands as we continue to work very closely with him to keep costs under control. To wrap up the third quarter and too date, the fourth quarter, we have actively worked to create liquidity, extend our maturities and to reduce our overall leverage.
As a result we enter the quarter with a leverage ratio of just under 55% compared with 59% at year-end 2009. During the quarter we eliminated one of our upcoming maturities with a loan restructuring and asset sale and completed the consensual deed holder transaction. We’ve created 215 million (inaudible) capacity on our revolving credit line and currently have only $35 million strong. As it stands today we have only $209 million in hard maturities in 2011. Most of which occurs in December and $242 million in 2012 and are working to address these loans. Although we have not made any recent share repurchases our share buy back programs have incentive through the third quarter reflection. The repurchase of $73.6 million common shares representing a 50% reduction from our pink share accounts.
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