ASHFORD HOSPITALITY TRUST ANNOUNCES PRELIMINARY FOURTH QUARTER AND YEAR END RESULTS FOR 2023
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The reported preliminary financial results from Ashford Hospitality Trust, Inc. indicate a net loss for both the fourth quarter and the full year of 2023. The range of net loss attributable to common stockholders suggests a significant financial setback for the company. However, the Adjusted EBITDAre shows a more positive outlook, with a substantial increase over the year, which could be a sign of underlying operational strength despite the net losses.
From a financial analysis perspective, the Adjusted Funds From Operations (AFFO) available to common stockholders and OP unitholders turning positive for the full year, after a negative fourth quarter, is noteworthy. AFFO is a key metric for real estate investment trusts (REITs) as it provides a clearer picture of the trust's operational performance by excluding gains or losses on sales of properties and adding back depreciation. This positive AFFO could signal an improved cash flow situation, which is critical for the REIT's ability to maintain or increase dividend payments – a primary concern for investors in this sector.
Looking at the broader hotel and hospitality industry, the slight increase in January Comparable RevPAR (Revenue Per Available Room) of 1.5% over the prior year is a modest indicator of recovery. RevPAR is a crucial metric in the hospitality industry as it measures a hotel's ability to fill its available rooms at an average rate. An increase in RevPAR typically suggests either improved occupancy rates, higher room rates, or a combination of both. It's an important signal for market analysts as it can reflect the health of the travel and hospitality sector, which has been significantly impacted by economic cycles and consumer discretionary spending.
Given Ashford Hospitality Trust's focus on upper upscale, full-service hotels, these preliminary results may reflect broader trends in the luxury travel segment. The segment's performance can be influenced by factors such as corporate travel budgets, tourism rates and economic conditions. Understanding these trends is critical for stakeholders and potential investors to gauge the company's potential for rebound and growth within the context of the industry's recovery trajectory.
It is important to consider the legal and regulatory context in which these financial figures are being reported. The company emphasizes that the results are preliminary and subject to change upon finalization of their financial statements. This caution is in line with regulatory requirements for accurate and timely disclosure of financial information. Investors should be aware that these numbers could be adjusted, which may impact their investment decisions.
Additionally, the company's reliance on non-GAAP financial measures, such as Adjusted EBITDAre and Adjusted FFO, while common in the industry, requires careful scrutiny. The reconciliation of these non-GAAP measures to GAAP metrics is a regulatory requirement to ensure transparency and comparability across companies. Stakeholders should review these reconciliations to understand the adjustments made and the reasons behind them, as they provide additional context to the company's operational and financial performance.
January Comparable RevPAR Increased
The Company reported today a preliminary estimated range of net loss attributable to common stockholders of approximately
Additionally, for the year ended December 31, 2023, the Company reported a preliminary estimated range of net loss attributable to common stockholders of approximately
We use certain non-GAAP measures, in addition to the required GAAP presentations, as we believe these measures improve the understanding of our operational results and make comparisons of operating results among peer real estate investment trusts more meaningful. Non-GAAP financial measures used in this press release, which should not be relied upon as a substitute for GAAP measures, are FFO, AFFO, EBITDA, EBITDAre and Adjusted EBITDAre. Please refer to our most recently filed Annual Report on Form 10-K for a more detailed description of how these non-GAAP measures are calculated. The reconciliations of non-GAAP measures to the closest GAAP measures are provided below and provide further details of our results for the periods being reported.
The following tables are reconciliations of the Company's preliminary estimated GAAP net income (loss) to the Company's preliminary estimated EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO:
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, EBITDAre AND ADJUSTED EBITDAre (in millions) (unaudited)
| |||||||
Three Months Ended | Year Ended | ||||||
Low End | High End | Low End | High End | ||||
Net income (loss) | $ (30.8) | $ (28.8) | $ (181.7) | $ (179.7) | |||
Interest expense and amortization of discounts and loan costs, net | 95.7 | 95.7 | 366.1 | 366.1 | |||
Depreciation and amortization | 46.8 | 46.8 | 187.8 | 187.8 | |||
Income tax expense (benefit) | (1.5) | (1.5) | 0.9 | 0.9 | |||
Equity in (earnings) loss of unconsolidated entities | 0.4 | 0.4 | 1.1 | 1.1 | |||
Company's portion of EBITDA of unconsolidated entities | (0.1) | (0.1) | 0.2 | 0.2 | |||
EBITDA | 110.5 | 112.5 | 374.4 | 376.4 | |||
(Gain) loss on disposition of assets and hotel properties | (4.0) | (4.0) | (11.5) | (11.5) | |||
EBITDAre | 106.5 | 108.5 | 362.9 | 364.9 | |||
Amortization of unfavorable contract liabilities | — | — | — | — | |||
Transaction and conversion costs | 1.5 | 1.5 | 3.9 | 3.9 | |||
Write-off of premiums, loan costs and exit fees | 0.8 | 0.8 | 3.5 | 3.5 | |||
Realized and unrealized (gain) loss on derivatives | 6.7 | 6.7 | 2.2 | 2.2 | |||
Stock/unit-based compensation | (0.3) | (0.3) | 4.0 | 4.0 | |||
Legal, advisory and settlement costs | 0.3 | 0.3 | 1.2 | 1.2 | |||
Other (income) expense, net | — | — | (0.3) | (0.3) | |||
(Gain) loss on insurance settlements | (0.5) | (0.5) | (0.5) | (0.5) | |||
(Gain) loss on extinguishment of debt | (53.4) | (53.4) | (53.4) | (53.4) | |||
Company's portion of adjustments to EBITDAre of unconsolidated entities | — | — | — | — | |||
Adjusted EBITDAre | $ 61.6 | $ 63.6 | $ 323.5 | $ 325.5 | |||
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO FFO AND ADJUSTED FFO (in millions) (unaudited)
| |||||||
Three Months Ended | Year Ended | ||||||
Low End | High End | Low End | High End | ||||
Net income (loss) | $ (30.8) | $ (28.8) | $ (181.7) | $ (179.7) | |||
(Income) loss attributable to noncontrolling interest in consolidated entities | — | — | — | — | |||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 0.4 | 0.4 | 2.2 | 2.2 | |||
Preferred dividends | (4.6) | (4.6) | (15.9) | (15.9) | |||
Deemed dividends on redeemable preferred stock | (0.7) | (0.7) | (2.7) | (2.7) | |||
Gain (loss) on extinguishment of preferred stock | 3.4 | 3.4 | 3.4 | 3.4 | |||
Net income (loss) attributable to common stockholders | (32.3) | (30.3) | (194.7) | (192.7) | |||
Depreciation and amortization on real estate | 46.8 | 46.8 | 187.8 | 187.8 | |||
(Gain) loss on disposition of assets and hotel properties | (4.0) | (4.0) | (11.5) | (11.5) | |||
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | (0.4) | (0.4) | (2.2) | (2.2) | |||
Equity in (earnings) loss of unconsolidated entities | 0.4 | 0.4 | 1.1 | 1.1 | |||
Company's portion of FFO of unconsolidated entities | (0.3) | (0.3) | (0.7) | (0.7) | |||
FFO available to common stockholders and OP unitholders | 10.2 | 12.2 | (20.2) | (18.2) | |||
Deemed dividends on redeemable preferred stock | 0.7 | 0.7 | 2.7 | 2.7 | |||
(Gain) loss on extinguishment of preferred stock | (3.4) | (3.4) | (3.4) | (3.4) | |||
Transaction and conversion costs | 1.5 | 1.5 | 3.9 | 3.9 | |||
Write-off of premiums, loan costs and exit fees | 0.8 | 0.8 | 3.5 | 3.5 | |||
Unrealized (gain) loss on derivatives | 16.8 | 16.8 | 44.0 | 44.0 | |||
Stock/unit-based compensation | (0.3) | (0.3) | 4.0 | 4.0 | |||
Legal, advisory and settlement costs | 0.3 | 0.3 | 1.2 | 1.2 | |||
Other (income) expense, net | — | — | (0.3) | (0.3) | |||
Amortization of credit facility exit fee | 4.8 | 4.8 | 18.6 | 18.6 | |||
Amortization of loan costs | 3.1 | 3.1 | 12.7 | 12.7 | |||
Advisory services incentive fee | — | — | — | — | |||
(Gain) loss on insurance settlements | (0.5) | (0.5) | (0.5) | (0.5) | |||
(Gain) loss on extinguishment of debt | (53.4) | (53.4) | (53.4) | (53.4) | |||
Default interest and late fess | 5.2 | 5.2 | 12.6 | 12.6 | |||
Company's portion of adjustments to FFO of unconsolidated entities | — | — | — | — | |||
Adjusted FFO available to common stockholders and OP unitholders | $ (14.2) | $ (12.2) | $ 25.4 | $ 27.4 | |||
Weighted average diluted shares | 37.0 | 37.0 | 36.7 | 36.7 | |||
Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing predominantly in upper upscale, full-service hotels.
The preliminary estimated results for the fourth quarter ended December 31, 2023 included in this release, which are the responsibility of management, were prepared by the Company's management in connection with the preparation of the Company's financial statements and are based upon preliminary hotel operating results, preliminary corporate level expenses, and a number of subjective judgements and assumptions. Additional items that may require adjustments to the Company's preliminary estimated financial information may be identified and could result in material changes to the Company's preliminary estimated results. The Company has provided ranges, rather than specific amounts, for the preliminary estimated results described above, primarily because the Company's closing procedures for the fourth quarter ended December 31, 2023 are not yet complete and, as a result, the Company's final results upon completion of the closing procedures may vary from the preliminary estimates set forth above. The Company's independent registered public accounting firm, BDO
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Trust's control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to repay, refinance, or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford Trust's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
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SOURCE Ashford Hospitality Trust, Inc.
FAQ
What were Ashford Hospitality Trust's (AHT) preliminary net loss estimates for the fourth quarter and full year ended December 31, 2023?
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