Ashford Hospitality Trust Inc

Greetings. Welcome to Ashford Hospitality Trust's third 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. Please note this conference is being recorded. I will now turn the conference over to Jordan Jennings, Manager of Investor Relations. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review the results for Ashworth Hospitality Trust for the third 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 Financial Officer, and Jeremy Walters, 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. 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, which are provided in the company's earnings release and the company's tables or schedules. which have been filed on form 8K with SEC on October 26, 2021, and may also be accessed through the company's website at www.ahpreach.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 third quarter of 2021 with the third quarter of 2020. I will now turn the call over to Rob Hayes. Please go ahead, sir.

Good morning and welcome to our call. I'll start by providing an overview of the current environment and how Ashford Trust has been navigating the recovery. After that, Derek will review our financial results and then Jeremy will provide an operational update on our portfolio. I'd first like to highlight some of our recent accomplishments and the main themes for our call. First, we had strong hotel performance and solid earnings in the third quarter that exceeded both street estimates and our internal forecast. Second, our liquidity continues to improve and our cash balance is building. We ended the quarter with over $672 million of cash and cash equivalents. Third, we have 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 $1.1 billion. equating to a decrease in our leverage ratio, defined as net debt plus preferred equity gross assets, by over 13 percentage points. Finally, even with an already attractive loan maturity schedule, we remain proactive in our capital markets activities and balance sheet management. During the quarter, we successfully refinanced a mortgage loan for the Hilton Boston Back Bay, which had a final maturity date in November of 2022, and this financing addresses the only significant final debt maturity in 2022, and we have made significant progress on refinancing our upcoming debt maturity at the Marriott Crystal Gateway City and hope to have more information for you soon on it. We are optimistic about the long-term outlook for the company, and by taking decisive actions to strengthen our balance sheet, we feel well-positioned to capitalize on the recovery we are already seeing in the hospitality industry. Subsequent to quarter end, we announced an amendment to our strategic financing which provides us with some flexibility to access undrawn capital if needed, even after we have paid off the current balance. While our optimism remains, we also 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 continue to be in cash traps over the next 12 to 24 months or more, and as a result, we will continue to focus on building our liquidity and improving our capital structure in the months to come. In regards to dividends, the company and its board of directors previously announced a suspension of its common stock dividend, and therefore the company does not pay a dividend on its common stock and common units for the third quarter. The company also does not pay a dividend on its preferred stock for the third quarter. However, the board will continue to monitor the situation and assess future dividend declarations. We have significantly reduced our planned spend for capital expenditures this year. However, given the sizable 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. REVPAR for all hotels in the portfolio increased approximately 166% to the third quarter, with only seven of our hotels having negative hotel EBITDA on the quarter. This REVPAR result equates to a decrease of 25.6% versus the third quarter of 2019. We remain encouraged by the continued strength and weekend leisure demand at our properties. And the fourth quarter looks to be building upon our strong momentum with October numbers likely to outperform September numbers, so we are confident that the industry recovery is continuing to take hold. We believe our geographically diverse portfolio, consisting of high-quality, well-located assets across the U.S. that are approximately 80% relying 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 this 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 the recovery. We're 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 a bit more detail. In terms of investor relations, we recently held a very well-attended investor day in New York. If you're not able to join us, I encourage you to go to our website and watch the webcast. For the remainder of the year and into 2020, we will expand our efforts to get out on the road and meet with investors, communicate our strategy, and explain what we believe to be an attractive investment opportunity to ask for trust. We look forward to speaking with many of you during the upcoming events. 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 the operating performance of our assets as they recover, deleveraging the balance sheet over time, and looking for opportunities to invest and grow our portfolio. Going forward, we will be laser focused on all of these. I'll now turn the call over to Derek to review our third quarter financial performance.