Ashford Hospitality Trust Inc

Greetings and welcome to the Astrid Hospitality Trust's fourth quarter 2020 results conference call. At this time, all participants are in 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, Investor Relations for Ashford Hospitality Trust. Please go ahead, Ms. Jennings.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the fourth quarter and full year 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 Welter, Chief Operating Officer. Your 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 State Harbor provisions of the Federal Security Regulations. Such forward-looking statements are subject to numerous assumptions and uncertainties and known or unknown risks, 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 February 24, 2021, and may also be accessed through the company's website at www.htreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the fourth quarter of 2020 with the fourth 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 October, our business and the industry have remained pressured due to the pandemic, 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. I'd like to highlight some of our accomplishments, and we can get into the details later in the call. First, we secured strategic financing with additional future commitments to provide years of runway. Second, we effectively completed our forbearance initiative. Third, we have delivered the balance sheet by close to half a billion dollars since the beginning of the pandemic. Fourth, we have materially grown both the equity value of the company and daily trading volume to provide increased liquidity for our shareholders. Fifth, we have reduced our monthly property cash utilization by approximately 85% since the second quarter. And lastly, Though we have an attractive loan maturity schedule, we have successfully modified property loan extension tests on two large pools for 23 and 24 tests. This initiative will continue to be a focus for us going forward. Now, while we have made progress getting our business back up and running, we anticipate dealing with challenges for some time because of the impact of COVID-19 on the US hospitality industry and the day-to-day operations at our hotels. But there have been, as I mentioned, a number of positive developments for both our company and the hospitality industry over the past few months. We are encouraged by the development and the deployment of vaccines in the US and believe that progress on the front will provide some visibility to the end of the pandemic. Some doctors and scientists believe that herd immunity in the US could be reached as early as April. As I mentioned earlier, we are substantially complete with our debt forbearance efforts, signing several agreements during and subsequent to the end of the quarter. Most importantly, last month we closed a crucial strategic financing. We drew down an initial $200 million at the closing of the financing and have the option to draw down an additional $250 million if needed. We are optimistic about the long-term outlook for the company, and by taking decisive actions to strengthen our balance sheet with this financing and other steps, we now have multiple years of runway that will allow us to capitalize on the upcoming recovery in the hospitality industry. As discussed on our recent earnings calls, Our response to this pandemic has been swift and comprehensive. We have focused our efforts on providing a safe environment for the guests and staff at our properties, while at the same time taking aggressive measures to protect our properties and preserve liquidity so that we can be in a position to return to profitability as the economy opens and travel resumes. Operationally, we are focused on mitigating the financial impact of the pandemic with aggressive cost control initiatives, including working closely with our property managers to minimize cost structures and maximize liquidity at the hotels. And 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're proud of their efforts and believe this important relationship has enabled us to better weather the impact of COVID-19. And Jeremy will discuss this more in detail. We also have significantly reduced our plan spend for CapEx for the year and suspended both our common and preferred dividends and Derek will provide more detail around our liquidity outlook. We've been actively working with our lenders on property level debt to arrange mutually acceptable forbearance arrangements to reduce our near-term cash utilization and improve our liquidity. In early October, we announced we had entered into forbearance agreements on our keys loan pools, as well as the Hilton Boston Back Bay, which in total represents 35 hotels and approximately $1.3 billion of debt. We also extended our loan on the Marriott Gateway which now is a final maturity date of November of 2021. We anticipate refinancing this loan later this year as debt terms continue to improve and the recovery advances. On December 31st, we executed forbearance arrangements on two loan pools representing five hotels, as well as the loans for the residents in Jacksonville and residents in Manchester. Together, these agreements represented $52 million of debt. Subsequent to quarter end on January 19th, we entered into a modification agreement on our JP Morgan aid portfolio loan representing eight hotels and $395 million of debt. This agreement paid all deferred amounts current in exchange for reducing future debt yield extension tests. And additionally, on February 9th, we entered into a modification agreement on our MS-17 portfolio loan representing 17 hotels and $419 million of debt. This agreement also paid deferred amounts current in exchange for lowering future debt yield extension tests. With the signing of these agreements, we are now substantially complete with our forbearance initiative, and as we have loan forbearance or modification agreements in place for 97 properties, representing approximately 98% of our current outstanding mortgage debt balance. These forbearance agreements are important because they typically allow us to defer interest on the loans for a period of time, subject to certain conditions. and also allow us to utilize lender and manage held reserve accounts, which are included in restricted cash in our balance sheet, to fund operating shortfalls at hotels. We continue to have discussions with our lenders on the small remaining loan pools where we have not yet signed forbearance agreements. As I mentioned on a prior call, one of my challenges as CEO is to make sure that we emerge from this crisis in a better position as a company. To that end, with the closing of our strategic financing and given the progress we've made on these forbearances, We are now in a position to spend time analyzing lessons that we've learned from this crisis and over the past decade. Those reflections will likely lead to an update of the go-forward strategy of Ashford Trust. This could include changes to our leverage profile, financing strategies, and investment criteria. We will be communicating these updates with the investment community in due course. The past year has been extraordinary by any measure, and I cannot be prouder of the effort and the performance of our teams during this time. 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. 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 long-term values of our assets and the company. And I'll turn the call over to Derek to review our fourth quarter financial performance.