Ashford Hospitality Trust Inc

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 and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jordan Jennings, Manager, Investor Relations. Thank you. You may begin, ma'am.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the second quarter of 2023 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 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. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. 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-A with the SEC on August 2, 2023, and may also be accessed through the company's website at www.htreap.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 second quarter ended June 30th, 2023 with the second quarter ended June 30th, 2022. I will now turn the call over to Rob Case. Please go ahead, sir.

Good morning. welcome to our call after my introductory comments derek will review our second quarter financial results and then chris will provide an operational update on our portfolio the main themes of our call today are first we are very pleased with the strong rev part growth we achieved in the second quarter our portfolio continues to ramp up nicely we are clearly seeing the benefit of a broadly diversified high quality portfolio that is balanced across leisure corporate and group demand sources second Our liquidity and cash position continue to be strong. We ended the quarter with approximately $442 million of net working capital. We feel well positioned for our upcoming extension tests. In addition, we have access to an on-drawn capital via VR strategic financing. Third, the capital raising for our non-traded preferred is ramping up nicely and increased over 148% from the first quarter. We continue to be excited about this source of capital for our platform. Now for some additional details on these three themes. REVPAR for all hotels in our portfolio increased 6.7% in the second quarter compared to the prior year quarter. This REVPAR growth was led by occupancy, which increased 2.8% over the prior year quarter. And we also saw strong growth in average rates, which increased 3.8% over the prior year quarter. In addition to our solid hotel performance, the vast majority of our hotels are now out of their respective cash traps. This is an important step for our company as it allows us full flexibility to use our cash to optimize our capital structure, pay down debt, or invest in growth opportunities. Looking ahead, we believe our geographically diverse portfolio consisting of high quality assets with best in class brands and management companies is well positioned. 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. During the quarter, we made significant progress on our loan extensions and made the strategic decision not to make required paydowns on our keys A, B, and F loan pools in order to meet those extension debt yield tests. This was a prudent economic decision that reflected a comprehensive capital management process by the company, which explored and assessed multiple options for these assets, including refinancing, extensions, and asset sales. Importantly, The recent amendment to our corporate financing provides us with added flexibility regarding these loan pools, and by proactively choosing not to extend three of those pools, we will improve our balance sheet by lowering leverage and it materially improves our future cash flows. Further, the combination of the paydowns and the ultimate removal of the debt associated with the pools that we did not extend will lower our debt by approximately $700 million, or more than 18%. We have been committed to leveraging the company over time, and this is a significant step towards our long-term goals of creating a more sustainable capital structure. Additionally, capital recycling remains an important component of our strategy, and we continue to pursue opportunities to sell certain non-core assets. We recently sold a small asset in Orlando for nearly $15 million, and have four other assets that are currently being marketed for sale. We 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. We also continue to be excited about our non-trader preferred capital offering and believe this offering will not only provide an attractive cost of capital, but allow us to accretively 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 lodging REITs are currently trading at material discounts to their net asset values. Our preference would be to use this capital for future growth, Though we may also use some of the capital to pay down debt or other corporate uses as needed. We continue to build a selling syndicate and currently have 35 signed dealer agreements representing over 5,027 reps selling the security. We are still very early in the capital raising process. To date, we've issued approximately $50.6 million of gross proceeds, including $9.5 million in July alone. 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 at Ashford Trust. We have already attended numerous industry and Wall Street conferences this year and have several upcoming conferences later this year. 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 in our 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 ended the second quarter with a substantial amount of cash in 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 our second quarter financial performance.