Ashford Hospitality Trust Inc

Greetings, and welcome to Ashford Hospitality Trust, Inc. Third Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jordan Jennings, Manager of Investor Relations.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the third quarter of 2020 and to update you on recent developments. On the call today will be Rob Hayes, President and Chief Executive Officer, Derek Eubanks, Chief Financial Officer, and Jeremy Walter, Chief Operating Officer. The results as well as notice of the accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday afternoon in a press release. At this time, 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 Federal Securities Regulations. Such forward-looking statements are subject to numerous assumptions and certainties and known or unknown risk, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8K with the SEC on October 27, 2020, and may also be accessed through the company's website at www.ahtreet.com. Each listener is encouraged to review those reconciliations provided in their earnings release together with all other information provided in the release. Also, unless otherwise stated... All reported results discussed in this call compared the third quarter of 2020 with the third quarter of 2019. I will now turn the call over to Rob Hayes. Please go ahead, sir.

Good morning, and welcome to our call. Since our last call in July, our business and industry have remained pressured due to the pandemic. The last several months continue to be unlike anything most of us have experienced in our lifetimes. And these remain challenging times for our country, the economy, and, of course, the hospitality industry. I'll start with the current environment and how Ashford Trust has managed through this pandemic and the early parts of the recovery. After that, Derek will review our financial results, and Jeremy will provide an operational update on the portfolio. While we have made progress getting our business back up and running, we anticipate dealing with pandemic-related challenges for some time because of the impact of COVID-19 on the U.S. hospitality industry and the day-to-day operations at our hotels. As discussed on our last two earnings calls, our response to the pandemic has been swift and comprehensive. We have focused our efforts on providing a safe environment for our guests and staff at our properties, while at the same time taking aggressive measures to protect our properties and preserve liquidity so we can be in a position to return to profitability as the economy opens up and travel resumes. Additionally, given the economic impact of the pandemic, we were initially required to make the difficult decision to temporarily suspend operations at many of our properties. I'm pleased to report that we currently have only two properties with suspended operations. We hope to reopen them soon as demand returns. Operationally, we are focused on mitigating the financial impact of the pandemic with cost control initiatives, including working closely with our property managers to manage cost structures and maximize liquidity at the properties. This is where our relationship with our affiliated property manager, Remington, really sets us apart. Remington has been able to quickly cut costs and rapidly adjust to this new operating environment. We are proud of their efforts and believe this has enabled us to better weather the impact of COVID-19, and Jeremy will discuss this in more detail. We have also significantly reduced our planned spend for CapEx for the rest of the year and suspended both our common and preferred dividends. Derek will provide more detail around our liquidity shortly, But throughout the quarter, we have taken action to preserve liquidity. We've been actively working with our lenders on property-level debt to arrange mutually acceptable forbearance agreements to reduce our near-term cash utilization and improve our liquidity. In early October, we announced we entered into forbearance agreements on our keys loan spools, as well as the Hilton Boston Back Bay, representing 35 hotels and approximately $1.3 billion of debt. With completion of these agreements, we now have loan forbearance or modification agreements in place for 62 properties representing approximately 72% of our current outstanding mortgage debt balance. The forbearance agreements typically allow us to defer interest on the loans for up to six months subject to certain conditions. They also allow us to utilize lender and manager held reserve accounts, which are included in restricted cash on our balance sheet to fund operating shortfalls at the hotels. Discussions on the remaining loan pools are progressing well, and we look forward to providing additional information as we work through this process. As I mentioned on our last call, it is unlikely that we will be able to agree on forbearance terms on all of our loan pools, and investors should anticipate that we may hand back assets to lenders during this process. There are several reasons why we may decide to give back assets to lenders. One, there is negative equity in the loan pool and is unlikely to reach positive equity in the medium to long term. Two, there are significant cash requirements to the property, such as operating shortfalls, ongoing debt service, or capital expenditures, that we do not believe are economical. Or three, the terms the lenders and servicers are proposing are onerous, making keeping the properties unattractive. While we hope to retain as many of our properties as possible, I do think it is important for our investors to know that during this process, we will plan on handing back assets that do not create long-term value for their shareholders. To that end, during the quarter, we handed back 13 hotels to lenders. And while we take no joy in handing back assets to our lenders, we do hope it demonstrates that we are willing to make hard decisions that are in the best interest of our shareholders. The first nine months of 2020 have been extraordinary by any measure. I could not be prouder of the effort and the performance of our teams during this time, and I believe our response has been the right one for both the short- and long-term health of our guests, our portfolio, the communities we serve, and our shareholders. We are closely monitoring the fluid situation and have plans in place to continue to reopen closed properties as business-demanding conditions warrant. Our management team has extensive experience in effectively navigating tough market environments and extended downturns. Now, each crisis is invariably different, but we believe we have the right plan in place to protect the long-term values of our assets in the company. And I'll turn the call over to Derek to review third quarter financial performance.