8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): May 5, 2017

ASHFORD HOSPITALITY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-31775	86-1062192
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS employer identification number)
14185 Dallas Parkway, Suite 1100
Dallas, Texas		75254
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (972) 490-9600

Check the appropriated box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14-a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                    ¨

ITEM 2.02     RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

Subsequent to Ashford Hospitality Trust, Inc. (the “Company”) issuing its earnings press release for the three months ended March 31, 2017 on Form 8-K on May 4, 2017 (the “Earnings Release”), the 4th District Court of Appeals issued its Mandate on May 5, 2017 in the lawsuit captioned Palm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc., which resulted in an estimated final judgment of approximately $14.4 million, including pre-judgment interest. The Company estimates post-judgment interest to be approximately $1.8 million and has increased its estimate of total loss related to reimbursement of the plaintiff’s legal fees to $800,000, bringing the total amount of the recorded loss to approximately $17.0 million as of March 31, 2017. This resulted in an additional accrual in the three months ended March 31, 2017 of approximately $3.8 million. This matter remains under appeal, and there is no assurance that the ultimate resolution will not differ from the amount currently estimated by the Company.

Furnished herewith as Exhibit 99.1 are the consolidated balance sheets as of March 31, 2017 and December 31, 2016, and the consolidated statements of operations for the three months ended March 31, 2017 and 2016 of the Company including the revised estimate of loss described above. This revised estimate results in an increase to net loss attributable to common stockholders of $3.1 million, or $0.04 per share (basic and diluted), and a decrease to EBITDA available to the Company and OP unitholders and funds from operations (“FFO”) available to the Company and OP unitholders of $3.7 million when compared to the results reported in the Earnings Release, and does not impact Adjusted EBITDA available to the Company and OP unitholders, Adjusted funds from operations (“AFFO”) available to common stockholders and OP unitholders or Hotel EBITDA.

The information in this Form 8-K and Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS

(d)    Exhibits

Exhibit NumberDescription

99.1 Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016 and Consolidated Statements of Operations for the Three Months Ended March 31, 2017 and 2016 of Ashford Hospitality Trust, Inc.

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 9, 2017

ASHFORD HOSPITALITY TRUST, INC.

By: /s/ DERIC S. EUBANKS            

Deric S. Eubanks

Chief Financial Officer

EX-99.1

EXHIBIT 99.1

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

(unaudited)

	March 31, 2017			December 31, 2016
ASSETS
Investments in hotel properties, net	$	4,152,741		$	4,160,563
Cash and cash equivalents	306,670			347,091
Restricted cash	165,262			144,014
Marketable securities	50,382			53,185
Accounts receivable, net of allowance of $586 and $690, respectively	59,740			44,629
Inventories	4,494			4,530
Investment in securities investment fund	—			50,890
Investment in Ashford Inc.	5,165			5,873
Investment in OpenKey	2,559			2,016
Deferred costs, net	2,834			2,846
Prepaid expenses	24,668			17,578
Derivative assets	1,884			3,614
Other assets	13,627			11,718
Intangible asset, net	10,032			10,061
Due from Ashford Prime OP, net	6			—
Due from related party, net	1,392			—
Due from AQUA U.S. Fund	2,579			—
Due from third-party hotel managers	18,583			13,348
Assets held for sale	—			19,588
Total assets	$	4,822,618		$	4,891,544
LIABILITIES AND EQUITY
Liabilities:
Indebtedness	$	3,720,040		$	3,723,559
Accounts payable and accrued expenses	156,388			126,986
Dividends payable	25,786			24,765
Unfavorable management contract liabilities	1,035			1,380
Due to Ashford Inc., net	15,750			15,716
Due to Ashford Prime OP, net	—			488
Due to related party, net	—			1,001
Due to third-party hotel managers	2,667			2,714
Intangible liabilities, net	16,106			16,195
Derivative liabilities, net	198			—
Other liabilities	17,439			16,548
Liabilities associated with assets held for sale	—			37,047
Total liabilities	3,955,409			3,966,399
Redeemable noncontrolling interests in operating partnership	111,273			132,768
Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized -
Series A Cumulative Preferred Stock, 1,657,206 shares issued and outstanding at March 31, 2017 and December 31, 2016	17			17
Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at March 31, 2017 and December 31, 2016	95			95
Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at March 31, 2017 and December 31, 2016	48			48
Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at March 31, 2017 and December 31, 2016	62			62
Common stock, $0.01 par value, 200,000,000 shares authorized, 97,019,295 and 96,376,827 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	970			964
Additional paid-in capital	1,763,675			1,764,450
Accumulated deficit	(1,009,656		)	(974,015		)
Total shareholders’ equity of the Company	755,211			791,621
Noncontrolling interests in consolidated entities	725			756
Total equity	755,936			792,377
Total liabilities and equity	$	4,822,618		$	4,891,544

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended March 31,
	2017			2016
REVENUE
Rooms	$	276,705		$	290,615
Food and beverage	62,850			63,055
Other	13,766			13,709
Total hotel revenue	353,321			367,379
Other	388			393
Total revenue	353,709			367,772
EXPENSES
Hotel operating expenses
Rooms	59,873			63,102
Food and beverage	42,170			43,101
Other expenses	111,733			113,137
Management fees	12,826			13,695
Total hotel operating expenses	226,602			233,035
Property taxes, insurance and other	18,333			18,612
Depreciation and amortization	64,698			62,162
Impairment charges	—			(111		)
Transaction costs	3			95
Advisory services fee:
Base advisory fee	8,716			8,540
Reimbursable expenses	1,522			1,463
Non-cash stock/unit-based compensation	403			900
Corporate, general and administrative:
Other general and administrative	5,170			1,673
Total operating expenses	325,447			326,369
OPERATING INCOME (LOSS)	28,262			41,403
Equity in earnings (loss) of unconsolidated entities	(763		)	(3,585		)
Interest income	208			63
Gain (loss) on sale of hotel properties	(83		)	(114		)
Other income (expense), net	(3,120		)	(252		)
Interest expense, net of premium amortization	(49,959		)	(49,765		)
Amortization of loan costs	(5,346		)	(6,178		)
Write-off of loan costs and exit fees	(54		)	—
Unrealized gain (loss) on marketable securities	(3,346		)	—
Unrealized gain (loss) on derivatives	1,418			6,918
INCOME (LOSS) BEFORE INCOME TAXES	(32,783		)	(11,510		)
Income tax benefit (expense)	846			(629		)
NET INCOME (LOSS)	(31,937		)	(12,139		)
(Income) loss from consolidated entities attributable to noncontrolling interest	31			38
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	6,493			2,112
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(25,413		)	(9,989		)
Preferred dividends	(10,956		)	(8,490		)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(36,369	)	$	(18,479	)
INCOME (LOSS) PER SHARE – BASIC AND DILUTED
Basic:
Net income (loss) attributable to common stockholders	$	(0.39	)	$	(0.20	)
Weighted average common shares outstanding – basic	94,840			94,136
Diluted:
Net income (loss) attributable to common stockholders	$	(0.39	)	$	(0.20	)
Weighted average common shares outstanding – diluted	94,840			94,136
Dividends declared per common share:	$	0.12		$	0.12

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