Ashford Hospitality Trust Inc

Greetings and welcome to the Ashford Hospitality Trust third quarter 2022 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 call over to Jordan Jennings, Director of Investor Relations. 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 third quarter of 2022 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 Chris Nixon, Executive Vice President and Head of Asset Management. 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 security regulations. Such forward-looking statements are subject to numerous assumptions and uncertainties 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 November 1, 2022, and may also be accessed through the company's website at www.ahtread.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 compare the third quarter of 2022 with the third quarter of 2021. I will now turn the call over to Rob Hayes. Please go ahead, sir.

Good morning and welcome to our call. After my introductory comments, Derek will review our third quarter financial results and Chris will provide an operational update on our portfolio. I'd like to highlight some of our recent accomplishments and the main themes for our call. First, we saw ongoing REVPAR improvement in the third quarter versus 2019 and expect continued strength through the fourth quarter. Additionally, we're excited that September's REVPAR performance was the first positive month we've had versus 2019 thus far in the recovery. Second, our liquidity and cash position continue to be strong. We ended the quarter with approximately $602 million of net working capital, which equates to approximately $17 per diluted share. With yesterday's closing stock price of 788, we believe we are trading at a meaningful discount to both our net asset value per share and our net working capital per share. Third, we are now effective and have commenced the offering of our non-traded preferred equity security. Importantly, we believe this offering will provide an attractive cost of capital and allow us to accretively grow our portfolio over time, subject to future market conditions. We believe access to this attractive growth capital is a significant competitive advantage particularly given the fact that lodging REITs are currently trading at material discounts to their net asset values. To the extent we are successful with our non-traded preferred capital raise, our preference would be to use that capital for future growth. We currently anticipate very little of this capital will be raised in the fourth quarter of this year, but believe that fundraising may accelerate as we get into the back half of 2023. Let me now turn to the operating performance of our hotels. The lodging industry is clearly recovering with strength. RevPAR for all hotels in the portfolio increased approximately 29% for the third quarter versus last year. This RevPAR result equates to a decrease of approximately 4% versus the third quarter of 2019. I'm pleased to note that September was the best performing month of the third quarter, along with the best month we've had versus 2019 during this recovery, with RevPAR up 0.4% versus 2019. Looking ahead to the remainder of 2022 and into 2023, We believe our geographically diverse portfolio, consisting of high-quality U.S. assets with best-in-class brands and management companies, is well-positioned to capitalize on the strong demand we're seeing across leisure, business, and group segments. We also believe that our relationship with our affiliated property manager, Remington, really sets us apart. Remington has been able to consistently manage costs and optimize revenues aggressively, enabling us to outperform the industry from an operations standpoint for many years. Additionally, capital recycling remains an important component of our strategy. and we continue to pursue some opportunities to sell certain non-core assets. During the quarter, we sold the Sheraton Ann Arbor in Michigan for $36 million, which $34.5 million was in cash and $1.5 million is due in the future, acquitting to an estimated trailing 12-month cap rate of 3.9% and a 2019 cap rate of 7.7%. We have another asset currently in the market for sale and have identified several additional assets that we may bring to market for sale if market conditions warrant. We expect any net proceeds from these sales will go towards paying down debt. Turning to investor relations, we continue to have a robust outreach effort to get in front of investors, communicate our strategy, and explain what we believe is an attractive investment opportunity at Ashford Trust. We have attended numerous industry and Wall Street conferences, which have led to over 400 investor meetings year to date. We have several more conferences coming up in the remainder of the year, including REIT World and Deutsche Bank's Logging and Gaming Conference, and we look forward to speaking with many of you during those events. We believe we have the right plan in place to move forward and maximize value at Ashford Hostelty Trust. This plan includes continuing to grow liquidity across the company, optimizing the operating performance of our assets, improving the balance sheet over time, and looking for opportunities to invest and grow the portfolio. We have a track record of success when it comes to property acquisitions, joint ventures, and asset sales, and we expect they will continue to be part of our plans moving forward. We entered the third quarter with a substantial amount of cash in our balance sheet, and with the launch of our non-traded preferred offering, we are excited about the opportunities we see in front of us. I'll now turn the call over to Derek to review our third quarter financial performance.