DALLAS | Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the second quarter ended June 30, 2008. 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 105 hotels owned and included in continuing operations as of June 30, 2008. Unless otherwise stated, all reported results compare the second quarter ended June 30, 2008, with the second quarter ended June 30, 2007. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.
FINANCIAL HIGHLIGHTS
- Total revenue increased 8.2% to $318.4 million from $294.3 million
- Net loss available to common shareholders was $33.5 million, or $0.28 per diluted share, compared with net income of $14.1 million in the prior-year quarter
- Adjusted funds from operations (AFFO) increased 3.3% to $57.2 million
- AFFO per diluted share was $0.41
- Cash available for distribution (CAD) increased 4.4% to $46.1 million
- CAD per diluted share was $0.33
- Declared quarterly common dividend of $0.21 per diluted share
- AFFO dividend coverage was 194% for the quarter
- CAD dividend coverage was 156%
- Sole debt maturity in 2008 refinanced. Debt maturities due in 2009 totals $30M
STRONG INTERNAL GROWTH
- Proforma RevPAR increased 2.0% for hotels not under renovation on a 2.3% increase in ADR to $142.16 and a 18-basis point decline in occupancy
- Proforma RevPAR increased 0.9% for all hotels on a 2.6% increase in ADR to $145.11 and a 134-basis point decline in occupancy
- Proforma Hotel Operating Profit for hotels not under renovation improved 4.8%
- Proforma Hotel Operating Profit margin for hotels not under renovation improved 95 basis points
CAPITAL RECYCLING AND ASSET ALLOCATION
- Capex invested in the second quarter totaled $44 million
- Three hotels sold in the second quarter for $208 million in proceeds
- Two additional hotels sold in third quarter for $21 million in proceeds
PORTFOLIO REVPAR GROWTH
As of June 30, 2008, the Company had a portfolio of direct hotel investments consisting of 105 properties classified in continuing operations. During the second quarter, 97 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 105 hotels) and proforma not-under-renovation basis (97 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 105 hotels in continuing operations. Details of each category are provided in the tables attached to this release.
- RevPAR growth by region was led by: New England (2 hotels) with 5.6%; East North Central (10) with 5.4%; East South Central (2) with 4.9%; West South Central (10) with 2.7%; South Atlantic (38) with 1.5%; Mountain (8) with 0.1%; Pacific (22) with a 0.3% decrease; West North Central (3) with a 2.4% decrease and Middle Atlantic (10) with a 2.5% decrease.
- RevPAR growth by brand was led by: Radisson (1 hotel) with 5.9%; Hyatt (3) with 5.6%; Starwood (6) with 1.8%; Hilton (34) with 1.6%; Marriott (57) with 0.0%; InterContinental (2) with a 0.2% decrease and Independents (2) with a 19.4% decrease.
HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS
For the 97 hotels as of June 30, 2008 that were not under renovation, Proforma Hotel EBITDA (adjusted as if all hotels were included throughout both periods) increased 4.8% to $91.4 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 95 basis points to 32.5%. For all 105 hotels included in continuing operations as of June 30, 2008, Proforma Hotel EBITDA increased 1.6% to $101.0 million and Hotel EBITDA margin improved 33 basis points to 31.6%.
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 105 hotels included in continuing operations are provided in the tables attached to this release.
Monty J. Bennett, President and CEO, commented, "We are pleased with the performance of our portfolio in this challenging market. Despite the hotel industry decelerating RevPAR trends, we were able to generate a 2.0% increase in RevPAR and a 4.8% increase in EBITDA, while improving our EBITDA margin by 95 basis points for the 97 hotels not under renovation. Our strategy to enhance cash flow with property and enterprise-level contingency plans and aggressive management of fixed costs should help us navigate what is expected to be a difficult second half of the year in the lodging industry."
Further details and charts are available at www.ahtreit.com/
Tripp Sullivan
