[PPT] - Co mpa ny Pre se nta tio n Ja nua ry 2016 Sa fe Ha rb o r I n ke PowerPoint Presentation

SLIDE 1

Co mpa ny Pre se nta tio n – Ja nua ry 2016

SLIDE 2

Sa fe Ha rb o r

2 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 Co 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 . 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

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. 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 T rust, 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.

SLIDE 3

Ashfo rd Ho spita lity T rust Visio n

Oppor

tunistic platfor m foc use d on full- se r vic e hote ls

3

Manage me nt te am mor

e highly- aligne d with shar e holde r s than our pe e r s

Appr
pr

iate use of financ ial le ve r age

Be st in c lass hote l manage r

s

Supe r

ior long- te r m total shar e holde r r e tur n pe r for manc e

Announc e d str

ate gy r e fine me nts to impr

ve shar

e holde r value

SLIDE 4

Re c e nt De ve lo pme nts

4

Sa le of se le c t-se r

vic e a sse ts

Simplify stra te g y
Ma rke ting 24-ho te l po rtfo lio in sma lle r g ro ups a nd ind ivid ua lly
Pursuing the o ppo rtunistic sa le o f re ma ining 39 se le c t-se rvic e ho te ls o ve r time
Ame ndme nts to Advisor

y Ag r e e me nt with Ashfor d, Inc .

Re c e ive ke y mo ne y ($4 millio n thus fa r)
T

e rmina tio n rig ht witho ut fe e upo n Ad viso r Co C

Sho rte n initia l te rm o f a g re e me nt
Re d uc tio n in b a se fe e a mo unt
Distr

ibution of r e ma ining sha r e s of Ashfor d Pr ime

Simplify b a la nc e she e t
Crysta lize va lue fo r sha re ho ld e rs
Re spo nsive to inve sto r fe e d b a c k
Bloc k tr

a de to r e pur c ha se a ppr

xima te ly 5.8 million sha r

e s of c ommon stoc k

Oppo rtunistic
Ac q uire d sig nific a nt a mo unt o f sto c k we ll b e lo w priva te ma rke t va lue
Re spo nsive to inve sto r fe e d b a c k
T

e r mina tion fe e c la r ific a tion

SLIDE 5

Stra te g y to I mpro ve Sha re ho lde r Va lue

5

Cur r e nt Mar ke t Valuation

Inc r

e ase in tr anspar e nc y

No mor

e spin- offs

Impr
ve por

tfolio quality thr

ugh sale of se le c t-

se r vic e asse ts Pr ivate Mar ke t Valuation

Simplify str

ate gy and str uc tur e

Oppor

tunistic stoc k buybac ks

SLIDE 6

Be st I n Cla ss Ho te l Ma na g e rs

89 pro pe rtie s ma na g e d b y

Re ming to n re pre se nting 60% o f po rtfo lio ho te l E BI T DA

32 pro pe rtie s ma na g e d b y

Ma rrio tt re pre se nting 30% o f po rtfo lio ho te l E BI T DA

Re ma ining 11 pro pe rtie s

ma na g e d b y Hilto n, Sta rwo o d, Hya tt, a nd I nte rsta te

Be st in c la ss ho te l pro pe rty

ma na g e rs a nd a sse t ma na g e rs tha t drive stro ng pe rfo rma nc e thro ug h ROI initia tive s, re ve nue

ptimiza tio n, a nd c o st c utting

me a sure s

6

Base d o n Ho te l E BI T DA as o f S e pte mb e r 30, 2015 fo r 132 o wne d ho te ls as o f January 25, 2016

SLIDE 7

100 110 120 130 140 150 160 2009 2010 2011 2012 2013 2014 T T M 2015

Re ming to n Outpe rfo rma nc e - Re ve nue

Affilia tio n with Re ming to n is a c o mpe titive a dva nta g e

7

NOT E : Re ming to n manag e d ho te ls o wne d b y Ashfo rd T rust and Ashfo rd Prime as c o mpare d to No n-Re ming to n manag e d ho te ls

Supe rior re ve nue

ptimiza tion

stra te g ie s

Re vPAR Gr

wth (Inde xe d to 2009)
Re ming to n ma na g e d ho te ls ha ve c o nsiste ntly o utpe rfo rme d No n-Re ming to n

ma na g e d ho te ls in Re vPAR g ro wth sinc e 2009

Po te ntia l to drive e ve n g re a te r pe rc e nt o f po rtfo lio E

BI T DA to b e Re ming to n ma na g e d

SLIDE 8

52% 58% 59% 43% 41% 44% 22% 53% 60% 59% 68% 70% 47% 55%

200%
175%
150%
125%
100%
75%
50%
25%

0% 25% 50% 75% 100% 2008 2009 2010 2011 2012 2013 2014 T T M 2015

No n-Re ming to n Re ming to n

Re ming to n Outpe rfo rma nc e - Pro fita b ility

Re mington has outpe r

for me d in E BIT DA flow- thr

ugh 7 out of the

last 8 ye ar s

8

NOT E : Re ming to n manag e d ho te ls o wne d b y Ashfo rd T rust and Ashfo rd Prime as c o mpare d to No n-Re ming to n manag e d ho te ls

Hote l E BIT DA F low- T hr

ugh
Supe r

ior manage me nt of downside r isk and c ash flow loss

300%

800%
808%

334%

SLIDE 9

67%

15%
35%
8%

185% 49% 14% 48% 22%

2%
31%

97% 42% 22% 128% 829% 105% 22% 44%

2%
16%
39%
100%

0% 100% 200% 300% 400% 500% 600% 700% 800% 900% Inc e ption 10- Yr 9- Yr 8- Yr 7- Yr 6- Yr 5- Yr 4- Yr 3- Yr 2- Yr 1- Yr

Pe e r Avg AHT

De mo nstra te d L

ng -T

e rm T ra c k Re c o rd

9

(1) S inc e I PO o n Aug ust 26, 2003 Pe e r ave rag e inc lude s: CHS P, CL DT , DRH, F CH, HS T , HT , I NN, L HO, RL J, SHO Re turns as o f 1/ 11/ 16 S

urc e : S

NL

T

tal Shar

e holde r Re tur n F

c use d on

r e c e nt pe r for manc e

L

ng - te rm pe rforma nc e

prove s ma na g e me nt's a bility to c re a te va lue for sha re holde rs

(1)

SLIDE 10

Asse t Pe rfo rma nc e

10

S

urc e : Co mpany filing s

YT D Q3 2015 Re vPAR Gr

wth

9.0% 7.9% 6.6% 6.3% 6.3% 6.3% 5.9% 5.2% 4.3% 3.9% 2.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% F CH INN AHT HT CHSP CL DT SHO DR H R L J HST L HO

SLIDE 11

Hig he st I nside r Owne rship

11

Pub lic L

dg ing RE

I T s inc lude : CHS P, CL DT , DRH, F CH, HS T , HT , I NN, L HO, PE B, RL J, S HO S

urc e : Co mpany filing s.

* I nside r o wne rship fo r Ashfo rd T rust inc lude s dire c t & indire c t inte re sts & inte re sts o f re late d partie s

Inside r Owne r ship

16.0%* 5.0% 4.0% 3.0% 3.0% 2.2% 2.0% 2.0% 2.0% 1.0% 1.0% 1.0% 0.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% AHT HT INN RL J F CH Pe e r Avg CL DT CHSP HST PE B DRH SHO L HO

SLIDE 12

12

Sha re ho lde r Alig nme nt

Pe e rs Ashford T rust

I

nc e ntivize d to g ro w

No size a b le sha re re purc ha se s
L
w inside r o wne rship
Re luc ta nc e to mo ne tize
I

nte rna l

I

nc e ntivize d to o utpe rfo rm

Sig nific a nt sha re re purc ha se s
Hig h inside r o wne rship
Willing ne ss to mo ne tize
E

xte rna l o r inte rna l

Histo ry
Re ming to n invo lve me nt

SLIDE 13

Attra c tive Divide nd Yie ld

13

S

urc e : Co mpany filing s.
Hig he st divide nd yie ld in the industry a nd with c o ve ra g e ra tio o f 2.7x

Divide nd Yie ld (as of 1/ 11/ 16)

8.8% 7.0% 6.4% 6.3% 6.2% 5.9% 5.8% 5.7% 5.4% 5.3% 5.2% 4.4% 4.2% 3.2% 2.4% 1.7%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% AHT L HO RL J XHR APL E CL DT HST HT CHSP DRH Pe e r Avg PE B INN AHP F CH SHO

SLIDE 14

14

Ashfo r d T r ust Ho te ls

Hig h Qua lity, Ge o g ra phic a lly Dive rse Po rtfo lio

L e Pavillon Hote l Ne w Or le ans, L A L ake way Re sor t & Spa Austin, T X Hilton Costa Me sa Co sta Me sa, CA Mar r iott F r e mont F r e mo nt, CA L e Me r idie n Minne apolis Minne apo lis, MN Chic ago Silve r smith Chic ago , IL Hilton Bac k Bay Bo sto n, MA T he Chur c hill Washingto n, D.C. W Atlanta Downtown Atlanta, GA Cr

wne Plaza Ke y We st

Ke y We st, F L Mar r iott Sugar L and Sugar L and, T X Hilton Santa F e Santa F e , NM Re naissanc e Nashville Nashville , T N We stin Pr inc e ton Pr inc e to n, NJ Mar r iott Be ve r ly Hills Be ve r ly Hills, CA E mbassy Suite s Por tland Po r tland, OR Mar r iott Gate way Ar lingto n, VA

SLIDE 15

T

p 25

70.8% T

p 50

20.6% Othe r 8.6%

Po rtfo lio Ove rvie w

15

Ho te l E BI T DA as o f S e pte mb e r 30, 2015 fo r 132 o wne d ho te ls as o f January 25, 2016 Ho te l E BI T DA in tho usands

Hote l E BIT DA by Br and Hote l E BIT DA by Manage r Hote l E BIT DA by MSA Hote l E BIT DA by Chainsc ale

T

p T

e n Ma r ke ts Ma r r iott 50.3% Hilton 28.0% Hya tt 3.6% IHG 3.9% Sta r wood 7.8% Inte r Contine nta l 0.5% Inde pe nde nt 6.1% Ma r r iott 29.5% Hilton 5.4% Hya tt 2.9% Re ming ton 59.5% Sta r wood 2.3% Inte r sta te 0.5% Upsc a le 34.6% Uppe r

Upsc a le

52.6% L uxur y 4.3% Uppe r

Midsc a le

4.6% Inde pe nde nt 4.0% T T M Ho tel % o f E B I T DA T

ta l

Wa shing to n DC Area $45,886 9.8% NY/ NJ Metro Area $31,426 6.7% Sa n F ra n/ Oa kla nd , C A $31,108 6.6% Atla nta , GA $29,462 6.3% L

s Ang eles Metro Area

$28,979 6.2% B

sto n, MA

$25,558 5.4% DF W, T X $25,489 5.4% Orla nd o , F L $19,956 4.2% Na shville, T N Area $19,736 4.2% MN/ St. Pa ul Area $15,566 3.3%

T

ta l Portfolio

$469,601 100.0%

SLIDE 16

16

(1) Pro fo rma fo r sale o f all se le c t-se rvic e ho te ls e xc luding Hilto n Garde n I nn Austin, Co urtyard Bo sto n Do wnto wn, Hampto n I nn Parsippany, Co urtyard Crystal City, Co urtyard Basking Ridg e , Co urtyard Ne wark, and Re side nc e I nn Ne wark (2) As o f S e pte mb e r 30, 2015

Pro F

rma Po rtfo lio F

ig ure s

$112 Re vPAR $123 Re vPAR

9.4% Inc r e ase

Curre nt Po rtfo lio O ve rvie w Pro F

rma - Sa le o f All Se le c t

(1)

T T M % o f T T M % o f Ho tels Ro o m s RevPAR(2) E B I T DA Ho tels Ro o m s RevPAR(2) E B I T DA Atla nta , GA 11 2,070 $110 6.3% 3 1,176 $125 5.0% B

sto n, MA

3 915 $167 5.4% 2 705 $188 6.7% DF W, T X 7 1,518 $106 5.4% 5 1,239 $109 6.3% Ho usto n, T X 3 692 $115 3.1% 3 692 $115 4.3% L

s Ang eles Metro Area

8 1,901 $105 6.2% 3 1,156 $108 5.2% Mia m i Metro Area 3 587 $126 2.4% 2 413 $138 2.5% MN/ St. Pa ul Area 4 809 $122 3.3% 4 809 $122 4.6% Na shville, T N Area 1 673 $168 4.2% 1 673 $168 5.8% NY/ NJ Metro Area 7 1,887 $107 6.7% 6 1,741 $108 8.6% Orla nd o , F L 6 1,834 $90 4.2% 1 174 $114 0.7% Phila d elp hia , PA 3 648 $92 1.4% 2 449 $99 1.4% Sa n Dieg o , C A 2 410 $110 1.4% 1 260 $101 1.0% Sa n F ra n/ Oa kla nd , C A 6 1,368 $142 6.6% 5 1,212 $144 8.2% T a m p a , F L Area 3 680 $100 2.1% 2 571 $99 2.3% Wa shing to n DC Area 10 2,466 $125 9.8% 6 1,799 $138 11.1% Other Area s 55 9,519 $104 31.4% 23 5,156 $115 26.4%

T

ta l Portfolio

132 27,977

$112

100.0% 69 18,225

$123

100.0%

SLIDE 17

I nve stme nt Stra te g y

17

F

ull-se rvic e ho te ls

Uppe r-upsc a le ho te ls
F
c us o n a ll ma rke ts
Appro pria te use o f le ve ra g e
F
c us o n fra nc hise d pro pe rtie s whe re

we c a n a dd sig nific a nt va lue

Inve stme nt Str ate gy Compe titive Advantage

I

nc re a se d de a l flo w

L

e ss c o mpe titio n

I

mpro ve s se le c tivity

Mo re va lue -a dd o ppo rtunitie s
Co re c o mpe te nc y o f Re ming to n
De b t ma rke ts e xpe rtise
E

xte nsive re la tio nships with b ro ke rs, le nde rs, institutio ns, a nd b ra nds

Po rtfo lio o ppo rtunitie s g ive n dive rse

a sse t lo c a tio ns a nd q ua lity

SLIDE 18

Re c e nt Ac q uisitio ns

18

Str a te gic R a tiona le T

ta l Va lue

F

r

wa r d Ca p R a te (1) F

r

wa r d L e ve r a g e d Ca sh F low Yie ld (2)

JV Sha re o f Hig hla nd Po rtfo lio 100% o wne rship in hig h q ua lity po rtfo lio $490.3 mn 7.4% 15% L e Pa villo n, Ne w Orle a ns Sig nific a nt va lue -a dd

ppo rtunity; e xc e lle nt

lo c a tio n in a stro ng ma rke t $62.5 mn 7.8% 15% W Atla nta Do wnto wn Prime lo c a tio n in stro ng Atla nta ma rke t; va lue -a dd

ppo rtunitie s

$56.8 mn 7.2% 12% L e Me ridie n & W Minne a po lis Hig h q ua lity a sse ts with g re a t lo c a tio ns in a stro ng ma rke t $101.0 mn 7.0% 9% L a ke wa y Re so rt & Spa , Austin Uniq ue wa te rfro nt lo c a tio n in hig h g ro wth ma rke t $33.5 mn 8.7% 19% Ma rrio tt Me mphis Co nside ra b le upside po te ntia l a nd virtua lly no c a pe x ne e ds $43.5 mn 8.6% 20%

T

tal / We ighte d Ave rage

$787.6 mn 7.5% 15%

2015 Signific ant F ull- Se r vic e Ac quisitions

(1) Anno unc e d fo rward c ap rate (2) Base d o n e xpe c te d fo rward NOI at c lo sing / anno unc e me nt date and re late d mo rtg ag e de b t

SLIDE 19

Ca se Study – Co nve rsio n to Re ming to n Ma na g e d

19

Imple me nte d Stra te g ie s:

Inc re a se d c lub ro o m pre mium pric ing

fro m $30 to $45

Inc re a se d c o rpo ra te g ro up ro o m

nig hts to 25% mid-we e k to e nsure se ll-

uts a nd push ra te
Impro ve d pa tte rn ma na g e me nt a nd

b usine ss mix to inc re a se hig he r ra te d re ta il c o ntrib utio n

Mo ve d to pre mium pric ing , a llo wing

re stric tio n o f pre mium ro o ms a nd pre fe rre d b usine ss ma na g e me nt

Ag g re ssive ly pric e d pre fe rre d ro o ms

ra te s 25%-30% YOY

Marrio iott F t Fremont – Fremont, CA CA

*$ in T ho usands

Announc e d for

wa r d c a p r a te a nd E BIT DA multiple of 8.1% a nd 10.0x, r e spe c tive ly

Ac tua l c a p r

a te a nd E BIT DA multiple of 10.9% a nd 7.9x, r e spe c tive ly

T T M Pr e - T ake ove r T T M Post- T ake ove r Inc r e ase (% , BPs)

T

ta l Re ve nue *

$19,140 $22,153

15.7%

Re vPAR $107.1 $130.5

21.8%

GOP ma rg in 27.0% 38.1%

+1,116

E BIT DA ma rg in 20.9% 30.0%

+916 Mar r iott F r e mont

SLIDE 20

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n

20

SLIDE 21

21

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n (c o nt.)

Ashfo rd ide ntifie d unde rre pre se nta tio n o f full-se rvic e Ma rrio tt pro duc t in the

Be ve rly Hills ma rke t

Clo se st Ma rrio tt full-se rvic e ho te l is 6.6 mile s away

Full-service

SLIDE 22

22

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n (c o nt.)

Re novation Manage me nt T e r ms

$21mm (ne t o f Ma rrio tt ke y mo ne y)
Re ming to n
25 ye a r a g re e me nt with fe e ra mp, a re a o f

pro te c tio n a nd ke y mo ne y

Conve r sion

(258 Ro o ms)

Pr e mium Pr ic ing

Ave ra g e inc re me nta l inc re a se in BAR o f $42 sinc e

c o nve rsio n

Pr

pe r

ty T

ur
Pro pe rty to ur fo r a na lysts a nd inve sto rs

SLIDE 23

23

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n (c o nt.)

L

bby Bar

Re staur ant F r

nt De sk

L

bby

SLIDE 24

24

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n (c o nt.)

Gue str

om

Boar dr

om

Gue str

om

Club L

unge

SLIDE 25

25

Ca se Study – Ma rrio tt Be ve rly Hills Co nve rsio n (c o nt.)

E ntr anc e Pool F itne ss Ce nte r Outdoor Dining

SLIDE 26

Oppo rtunity – W Atla nta Do wnto wn

26

Ac q uire d in July 2015
237 ke ys, 9,000 sq . ft. o f me e ting

spa c e

L
c a te d in the he a rt o f Do wnto wn

Atla nta

Clo se pro ximity to the do wnto wn a nd

midto wn de ma nd g e ne ra to rs: Ce nte nnia l Olympic Pa rk, the Atla nta Aq ua rium, a nd Ge o rg ia Do me

Po te ntia l to re c o nc e pt o r le a se

unde rutilize d fo o d a nd b e ve ra g e

utle ts
Ag g re ssive ly ma rke t the 3,500 sq . ft. L

E D b illb o a rd fa c ing so uthb o und I-85/ I-75 tra ffic

Re ne g o tia te va le t pa rking a g re e me nt
Pote ntial impac t to E

BIT DA of approximate ly +$950,000

E

xpe c te d forward 12-month le ve rage d c ash flow yie ld of 12.0%

W Atlanta – Atlanta, GA W Atlanta – Atlanta, GA

Hote l Ove rvie w: Opportunitie s:

SLIDE 27

Oppo rtunity – L e Pa villo n

27

L e Pavillo n – Ne w Or le ans, L A L e Pavillo n – Ne w Or le ans, L A

Ac q uire d in June 2015
226 ke ys, 11,235 sq . ft. o f me e ting spa c e
L
c a te d in the he a rt o f Ne w Orle a ns
Surro unde d b y c o rpo ra te , g ro up, a nd

le isure de ma nd g e ne ra to rs

Clo se pro ximity to T

he Me rc e de s-Be nz Supe rdo me , the E rne st N. Mo ria l Co nve ntio n Ce nte r, a nd the F re nc h Qua rte r

Hote l Ove rvie w:

T
p-line re ve nue g ro wth upside o f

a ppro xima te ly $4mm po st re no va tio n

Impro ve o pe ra ting re sults with Re ming to n

ta ke o ve r

Re ne g o tia ting pa rking a g re e me nt o r

ma na g ing in-ho use c o uld impro ve pa rking inc o me

Se ll unde rutilize d a dja c e nt a pa rtme nt

b uilding s

E

xpe c te d forward 12-month le ve rage d c ash flow yie ld of 15%

Po te ntia lly pursue so ft b ra nding

Opportunitie s:

SLIDE 28

Ca pita l Struc ture a nd Ne t Wo rking Ca pita l

Appro pria te use o f le ve ra g e to mo re c o st e ffe c tive ly inve st in the ho te l c yc le
Curre nt ne t wo rking c a pita l o f a ppro xima te ly $3.44 pe r sha re
All d e b t is no n-re c o urse , pro pe rty le ve l mo rtg a g e d e b t
T

a rg e te d c a sh b a la nc e o f 25% to 30% o f ma rke t c a pita liza tio n

Ma inta in e xc e ss c a sh b a la nc e to c a pita lize o n o ppo rtunitie s
He d g e unfa vo ra b le e c o no mic sho c ks
Dry po wd e r to e xe c ute o ppo rtunistic a c q uisitio ns

28

As o f S e pte mb e r 30, 2015 (1) Adjuste d fo r ac q uisitio n o f I ndig o Atlanta, W Minne apo lis, and re financ e o f UBS 2, ML 2, and ML 7 lo an po o ls (2) At marke t value as o f January 11, 2016

E nte r pr ise Value Ne t Wor king Capital F ig ure s in m illio ns e xc e p t p e r sha re va lue s Sto c k Pric e (As o f Ja nua ry 11, 2016) $5.48 F ully Diluted Sha res Outsta nd ing 114.5

Eq uity Va lue $627.6

Plus: Preferred E q uity 393.9 Plus: Deb t(1) 3,920.9

T

ta l Ma rket Ca pita liza tion

$4,942.4

L ess: Net Wo rking C a p ita l(1) (393.5)

T

ta l Enterprise Va lue

$4,549.0

C a sh & C a sh E q uiva lents(1) $225.2 Restric ted C a sh 146.1 I nvestm ent in AI M RE HE , L P 54.5 Ac c o unts Rec eiva b le, net 53.2 Prep a id E xp enses 20.5 Due F ro m Affilia tes, net (10.3) Due fro m T hird Pa rty Ho tel Ma na g ers 35.5 Ma rket Va lue o f Ashfo rd , I nc . I nvestm ent(2) 32.8

T

ta l Current Assets

$557.5

Ac c o unts Pa ya b le, net & Ac c rued E xp enses $141.3 Divid end s Pa ya b le 22.7

T

ta l Current L

ia b ilities $164.0 Net Working Ca pita l $393.5

SLIDE 29

$498.7 $206.2 $98.8 $284.3 $606.9 $731.9 $1,495.6 $167.4 $191.8 $91.2 $123.2 $172.0

$0.0 $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 2016 2017 2018 2019 2020 T he re a fte r F ixe d- Ra te F loa ting - Ra te Hypothe tic a l Exc e ss Proc e e ds

De b t Ma turitie s a nd L e ve ra g e

T

a rg e t Ne t De b t/ Gro ss Asse ts o f 50-60%

Ma inta in mix o f fixe d a nd flo a ting ra te d e b t (Curre ntly 72% flo a ting & 28% fixe d )
L

a d d e r ma turitie s

E

xc lusive use o f pro pe rty-le ve l, no n-re c o urse d e b t

29

As o f S e pte mb e r 30, 2015 (1) Assume s e xte nsio n o ptio ns are e xe rc ise d (2) Hypo the tic al e xc e ss pro c e e ds at 10% de b t yie ld if re financ e d to day No te : Adjuste d fo r re financ e o f UBS 2, ML 2, and ML 7 lo an po o ls and ac q uisitio n o f I ndig o Atlanta and W Minne apo lis. All de b t yie ld statistic s are b ase d o n E BI T DA to princ ipal.

De bt Matur ity Sc he dule (mm)(1)

De bt Yie ld: 11.5% De bt Yie ld: 19.3% De bt Yie ld: 13.4%

(2)

De bt Yie ld: 11.5% De bt Yie ld: 11.0%

SLIDE 30

PK F Re vPAR Gro wth F

re c a sts

30

PKF Re vPAR Gr

wth*

*S

urc e : PKF

5.4% 8.2% 6.8% 5.4% 8.3% 6.7% 6.1% 5.8%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2010 2011 2012 2013 2014 2015F 2016F 2017F Histor ic a l Re vPAR Growth F

re c a se d Re vPAR Growth

CO MPO UNDED 2-YEAR REVPAR G RO WT H RAT E

24.5%

5.0% 5.5% 6.0% 6.5% 7.0% 20.0%

8.2% 9.0% 9.9% 10.7% 11.6%

25.0%

10.3% 11.3% 12.4% 13.4% 14.5%

30.0%

12.3% 13.6% 14.8% 16.1% 17.4%

35.0%

14.4% 15.8% 17.3% 18.8% 20.3%

40.0%

16.4%

18.1% 19.8% 21.5%

23.2%

45.0%

18.5%

20.3% 22.2% 24.2%

26.1%

50.0%

20.5%

22.6% 24.7% 26.8%

29.0%

55.0%

22.6%

24.9% 27.2% 29.5%

31.9%

60.0%

24.6%

27.1% 29.7% 32.2%

34.8%

65.0%

26.7% 29.4% 32.1% 34.9% 37.7%

70.0%

28.7% 31.6% 34.6% 37.6% 40.6%

2-YEAR EBIT DA F L O W % CUMUL AT IVE 2-YEAR EBIT DA G RO WT H

SLIDE 31

K e y T a ke a wa ys

31

F
c use d on inc r

e a sing sha r e holde r va lue thr

ug h:
Impr
ving por

tfolio qua lity

No mor

e spin-offs

Inc r

e a se in tr a nspa r e nc y

Simplify str

a te g y a nd str uc tur e

Attr

a c tive industr y funda me nta ls

Str
ng ma na g e me nt te a m with a long tr

a c k r e c or d of c r e a ting sha r e holde r va lue

Hig he st divide nd yie ld in the industr

y

Hig hly-a lig ne d pla tfor

m thr

ug h ma na g e me nt str

uc tur e a nd hig h inside r

wne r

ship

SLIDE 32