Ashford Hospitality Trust Inc

Greetings and welcome to the Ashford Hospitality Trust second quarter 2021 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. It is now my pleasure to introduce your host, Jordan Jennings, Investor Relations for Ashford Trust. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the second quarter of 2021 and to update you on recent developments. On the call today will be Rob Hayes, President and Chief Executive Officer, Derek Eubanks, Chief Finance 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, 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. Before-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 in company tables or schedules. which have been filed on Form 8K with the SEC on July 28, 2021, and may also be accessed through the company's website at www.ahcreit.com. Each listener is encouraged to review those organizations 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 second quarter of 2021 with the second quarter of 2020. I will now turn the call over to Rob Haight. Please go ahead, sir.

Good morning. Welcome to our call. I'll start by providing an overview of the current environment and how Asher Trust has been navigating the recovery. After that, Derek will review our financial results, and Jeremy will provide an operational update on the portfolio. I'd first like to highlight some of our recent accomplishments and the main themes for the call. First, we had strong earnings in the second quarter that exceeded both street estimates and our internal forecasts. We reported positive hotel EBITDA for the second consecutive quarterly period and positive adjusted EBITDA RE. Second, our liquidity continues to improve. We ended the quarter with over $520 million of cash and cash equivalents. Third, we've continued to lower our leverage and improve our financial position. Since its peak in 2020, we have lowered our net debt plus preferred equity by over $800 million, equating to decreasing our leverage ratio defined as net debt plus preferred equity gross assets by over 10 percentage points. And finally, even with an already attractive loan maturity schedule, we successfully modified the loan extension test on another large loan for 2024 and 2025, improving our ability to qualify for those extension options. This loan modification initiative will continue to be a focus for us going forward. Additionally, we are making good progress on refinancing two of our upcoming debt maturities, the Marriott Gateway Crystal City and the Hilton Boston Back Bay. There have been numerous positive developments for both our company and the hospitality industry over the past several months. We highlighted many of them in an updated investor presentation that we put out in early April. We encourage you to review the presentation, which can be found on our website. We are optimistic about the long-term outlook for the company, and by taking decisive actions to strengthen our balance sheets, We now have multiple years of runway that will allow us to capitalize on the recovery we are seeing in the hospitality industry. So while our optimism remains, we must acknowledge some risks to the pace of the recovery due to the ongoing variants of COVID-19. In addition, we believe the majority of our loans could continue to be in cash traps over the next 12 to 24 months or longer. As a result, we will continue to focus on building our liquidity and improving our capital structure in the months to come. We have significantly reduced our planned spend for capital expenditures this year. However, given the sizeable strategic capital expenditures we made in our properties over the past several years, we believe our hotels are in fantastic condition and are well positioned for the industry rebound. Let me turn now to the operating performance at our hotels. The lodging industry is clearly showing signs of improvement. During the quarter, our hotels performed very well. RevPAR for all hotels in the portfolio increased approximately 372% for the second quarter, and we reported positive hotel EBITDA for the second consecutive quarter. The third quarter looks to be building upon our strong momentum, as July numbers look likely to outperform June numbers, so we are confident that the industry recovery is continuing to take hold. We believe our geographically diverse portfolio consists of high-quality, well-located assets across the U.S. that are approximately 80% reliant on transient demand. will be in a position to capitalize on the pent-up leisure and the acceleration of transient corporate demand. We continue to be focused on aggressive cost control initiatives, including working closely with our property managers to minimize cost structures and maximize liquidity at our hotels. This is where our relationship with our affiliated property manager, Remington, really sets us apart. Remington was able to quickly cut costs and rapidly adjust to the new operating environment. In the same way they were hyper-responsive on the way down, we expect them to be hyper-responsive on the way up, mitigating cost creep as much as possible throughout this recovery. We are proud of their efforts over the past year and believe this important relationship has enabled us to outperform the industry from an operations standpoint. Jeremy will discuss this in more detail. Turning to investor relations, our trading volume has hit new highs in 2021 with strong participation from both institutional and retail investors. We're pleased to report that in June we were added to the U.S. Small Cap Russell 2000 Index, the U.S. Broad Market Russell 3000 Index, and the Russell Micro Cap Index as part of the Russell Index's annual reconstitution. We believe our inclusion creates added exposure to key institutional investors as well as to investors who use the Russell Indexes to benchmark their portfolios. The past 18 months have been extraordinary by any measure, but I could not be prouder of the effort and the performance of our teams during this challenging time. Our management team has extensive experience in navigating tough market environments, and we believe we have the right plan in place to capitalize on the recovery as it unfolds. This plan includes continuing to maximize liquidity across the company, optimizing operating performance of our assets as they recover, deleveraging the balance sheet over time, and looking for opportunities to invest and grow as we bounce off the trough of the industry cycle. We are going to be laser-focused on all of these. I'll now turn the call over to Derek to review the second quarter financial performance.