Ashford Hospitality Trust Inc

On the call today will also be Steven Z. Gray, President and Chief Executive 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 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. 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 perspectives, 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 accompanying tables or schedules, which have been filed in Form 8-K, with the SEC on July 30, 2024, and may also be accessed through the company's website at www.ahtreat.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 30, 2024, with the second quarter ended June 30, 2023. I will now turn the call over to Stephen Zegre. Please go ahead.

Today marks my first conference call as Ashford Hospitality Trust's CEO, and I look forward to meeting and speaking with many of you over the coming months. I'm also pleased with our solid start to the year and the significant progress that we've made in executing our defined strategy. Earlier this year, we announced an ambitious plan to pay off our strategic corporate financing in 2024, which we believe is a crucial step in positioning Ashford Trust back on a path to growth. We set out to accomplish this through a combination of asset sales, mortgage debt refinancings, and our non-traded preferred capital rates. We made tangible progress in all three areas during the second quarter, And with nearly $90 million in principal payments made since March, we are now well positioned to achieve our goal with approximately $94 million in remaining principal. We currently have several assets at various stages in the sales process. And while we are unlikely to sell all of these assets, we continue to work diligently to determine which assets are capturing the most attractive valuations while also providing the largest impact to our deleveraging efforts. To date, we have sold seven assets for more than $310 million, with six of those sales closing in the second quarter. In April, we closed on the sale of the 390-room Hilton Boston Back Bay in Boston, Massachusetts for $171 million, or $438,000 per key. All of the proceeds from the sale were used for debt reduction, including approximately $68 million to pay down the company's strategic financing. In April, we closed on the sale of the 85-room Hampton Inn in Lawrenceville, Georgia, for $8.1 million. The sale price represented a 6% capitalization rate on trailing 12-month net operating income through March 2024. Additionally, in May, we closed on the sale of the 90-room courtyard located in Manchester, Connecticut, for $8 million. The property was encumbered with a mortgage loan that had an outstanding balance of approximately $5.6 million. In mid-June, we closed on the sale of the 90-room Spring Hill Suites and the 86-room Fairfield Inn, located in Kennesaw, Georgia, for $17.5 million. The sale price represented a 4.8% capitalization rate on trailing 12-month net operating income through April 2024. The hotels were encumbered with a mortgage loan that had an outstanding balance of approximately $10.8 million. And in late June, we closed on the sale of the 193-room One Ocean Resort, located in Atlantic Beach, Florida for $87 million, with approximately $66.2 million applied to the associated mortgage loan. We expect additional asset sales to close in the coming months, all of which would generate excess proceeds available for the repayment of our strategic financing. In addition to asset sales, we closed on a key refinancing during the second quarter. In May, we refinanced our loan secured by the Renaissance Nashville in Nashville, Tennessee, which had a final maturity date in March of 2026. The new non-recourse loan totals $267.2 million and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions. The loan is interest-only and provides for a floating interest rate of silver plus 3.98%. The previous loan totaled $240 million and included the 296-room Westin Hotel in Princeton, New Jersey. As part of this refinancing, the Westin Princeton is now unencumbered and we have listed this property for sale. We also remain excited about our non-traded preferred stock offering. We continue to build the selling syndicate and currently have 50 signed dealer agreements representing nearly 6,000 reps selling this security. To date, we have raised approximately $147 million of gross proceeds, including $24 million during the second quarter. This capital is very attractive for the company, and we have committed to applying 50% of all capital raised towards the repayment of our more expensive strategic financing. With the progress we are making across asset sales, mortgage refinancings, and our non-traded preferred offering, we continue to believe that we are on the right path to pay off the strategic financing in 2024. These focused deleveraging efforts, along with solid second quarter operating results and a broadly diversified high-quality portfolio with multiple demand drivers, We'll position the company to outperform for the remainder of 2024 and beyond. I will now turn the call over to Derek to review our second quarter financial performance. Thanks, Stephen.

For the second quarter, we reported net income attributable to common stockholders of $44.3 million, or $0.25 per diluted share. For the quarter, we reported AFFO per diluted share of $0.27. Adjusted EBITDA RE for the quarter was $78.7 million. At the end of the second quarter, we had $2.7 billion of loans with a blended average interest rate of 8.1%, taking into account in the money interest rate caps. Considering the current level of SOFR and the corresponding interest rate caps, approximately 100% of our debt is now effectively fixed. We ended the quarter with cash and cash equivalents of $121.8 million and restricted cash of $124.5 million. The vast majority of that restricted cash is comprised of lender and manager-held reserve accounts and $2.7 million related to trapped cash held by lenders. At the end of the quarter, we also had $22.2 million due from third-party hotel managers. This primarily represents cash held by one of our property managers, which is also available to fund hotel operating costs. We ended the quarter with net working capital of approximately $187.4 million. As of June 30, 2024, our consolidated portfolio consisted of 69 hotels with 17,087 rooms. At the end of the quarter, our share count consisted of approximately 48.8 million fully diluted shares outstanding, which is comprised of 46.8 million shares of common stock and 2.1 million OP units. While we are currently paying our preferred dividends quarterly or monthly, we do not anticipate reinstating a common dividend in 2024. This concludes our financial review, and I would now like to turn it over to Chris to discuss our asset management activities for the quarter. Thank you, Derek.