Ashford Hospitality Trust Inc

Greetings and welcome to the Ashford Hospitality Trust fourth quarter 2022 results conference call. At this time, all participants are in a listen-only mode. A brief 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. Thank you, Jordan. You may begin.

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 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 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 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 were more fully discussed in accompanying 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 measure reconciliations of which are provided in the company's earnings release and in company's tables or schedules, which have been filed in Form 8A with the SEC on February 21, 2023, and may also be accessed through the company's website at www.ahtree.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 and full year ended December 31st, 2022 with the fourth quarter and full year ended December 31st, 2021. I will now turn the call over to Rob Hayes. Please go ahead, sir.

Good morning. Welcome to our call. After my introductory comments, Derek will review our fourth quarter and full year financial results, and Chris will provide an operational update on our portfolio. The main themes of our call today are, first, we saw ongoing rev par improvement in the fourth quarter versus 2019, and expect continued strength through the first quarter of 2023. Second, our liquidity and cash position continue to be strong. We ended the quarter with approximately $519 million of net working capital, which equates to approximately $14 per diluted share. With yesterday's closing stock price of $5.69, we believe we are trading at a meaningful discount to both our net asset value per share and our net working capital per share. Additionally, to the extent there is a hiccup in the economy, we have the flexibility to access undrawn capital if needed via our strategic financing. The last main theme for our call is that we have commenced the offering of our non-traded preferred equity securities. Importantly, we believe this offering will provide an attractive cost of capital and allow us to accruely grow our portfolio over time, subject to future market conditions. We believe access to this growth capital is a significant competitive advantage, particularly given the fact that largely REITs are currently trading at material discounts to their net asset values. To the extent we are successful with our non-traded preferred capital rates, our preference would be to use that capital for future growth, though we may also use some of that capital to pay down debt as needed. We continue to build a syndicate for this product and currently have 22 signed dealer agreements representing 4,349 representatives selling this product. We're still very early in the capital raising process, and today we have issued approximately $4 million of gross proceeds. We expect this fundraising momentum to accelerate as we get further into 2023. Let me now turn to the operating performance at our hotels. The lodging industry continues to show signs of strength. REVPAR for all hotels in our portfolio increased approximately 25% for the fourth quarter compared to the prior year quarter. This REVPAR result equates to a decrease of approximately 1% compared to the fourth quarter of 2019, which is the best performing quarter versus 2019 in several years. One of our main priorities for 2023 is maximizing our operating performance to minimize potential pay downs for any extension tests associated with our property level debt. We've already made great progress on this front with our recent refinancing of the loan secured by the Le Pavillon Hotel, the extension modification of the loan secured by the Hotel Indigo Atlanta, and the extension modification of the JPMorgan Chase 8 Hotel Loan. Derek will talk about these in more detail. While we feel well prepared for the remaining upcoming extension tests, there may be situations where we have loan balances that exceed the current market value of the underlying hotels. If those situations arise, we may give back assets to lenders or allocate capital with a focus to maximize value for our shareholders. Looking ahead, we believe our geographically diverse portfolio consisting of high-quality assets with best-in-class brands and management companies is well-positioned to capitalize on the strong demand we are 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. We have identified several assets that we may bring to market for sale if market conditions warrant, and 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 to be an attractive investment opportunity in Ashford Trust. We have attended numerous industry and Wall Street conferences which have led to over 600 investor meetings over the past year. We have several conferences coming up this year, 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 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 and joint ventures and asset sales. We expect they will continue to be a part of our plans moving forward. We ended the fourth quarter with a substantial amount of cash on our balance sheet, and with the launch of our non-traded preferred stock offering, we are excited about the opportunities we see in front of us. And I'll turn the call over to Derek to review fourth quarter financial performance.