Ashford Hospitality Trust, Inc. (NYSE:AHT) Q3 2018 Earnings Conference Call Transcript

Nov 02, 2018 • 01:00 pm ET


Ashford Hospitality Trust, Inc. (NYSE:AHT) Q3 2018 Earnings Conference Call Transcript


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Good day, and welcome to the Ashford Hospitality Trust Third Quarter 2018 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jordan Jennings. Please go ahead.

Jordan Jennings

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the third quarter of 2018 and to update you on recent developments. On the call today will be Douglas Kessler, President and CEO; Deric Eubanks, CFO; Jeremy Welter, COO. The results as well as the notice of the accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday afternoon in a press release that has been covered by the financial media.

(Forward-Looking Cautionary Statements)

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 8-K with SEC on November 1, 2018, and may also be accessed through the company's website at 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 third quarter of 2018 to the third quarter of 2017.

I will now turn the call over to Douglas Kessler. Please go ahead, sir.

Douglas Kessler

Good day, and thank you for joining us to discuss Ashford Hospitality Trust's third quarter progress. I want to begin by discussing our Enhanced Return Funding Program or ERFP, with Ashford Inc, and providing an update on our success with this highly favorable initiative. Then I will share our quarterly results and other items.

Under the ERFP initiative, Ashford Inc. has committed to provide a meaningful $50 million to the company on a programmatic basis equating to approximately 10% of each new investment's acquisition price, to be used for the purchase of FF&E of properties owned by the company. We believe the ERFP program has the opportunity to significantly improve returns on hotel acquisitions and benefit us by effectively expanding cash available for future investment. The attractiveness of the ERFP is to make good deals great deals. The existence of this program is also advantageous given improvement in deal flow for properties that fit our focused investment criteria of upper upscale full-service assets. Furthermore, we also see certain key economic data points that continue to be attractive. Progress will depend upon continued strong demand growth and supply stabilization within the context of wage increases.

The financing markets remain favorable and attractive. We have excess corporate cash on our balance sheet which could be available for opportunistic uses including additional value-added hotel investments. In a very competitive bidding environment for acquisitions today, we see this program providing us with a significant advantage to win deals with accretive returns. We will continue to be opportunistic with our asset base of predominantly upper upscale full-service hotels. We believe in the strategic