Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Investor Presentation (November 2014)
33 slides from Braemar Hotels & Resorts's investor presentation, Nov 18, 2014
Slide 1: Ashford Hospitality Prime November 2014
JX ASHFORD HOSPITALITY PRIME November 2014
Slide 2: Safe Harbor
Safe Harbor 2 In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely
Slide 3: Strong Track Record & Performance
Strong Track Record & Performance 3
Slide 4: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 4 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns • AHP expects to benefit from strong management capabilities Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Trailing Total Sha
Slide 5: Highly-Aligned Management
Highly-Aligned Management 5 • With insider ownership* of approximately 13% for AHP, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 6: Compelling Opportunity
Compelling Opportunity fieok: # i Hf
Slide 7: Compelling Opportunity
7 Compelling Opportunity High quality portfolio predominantly located in gateway & resort markets Low leverage strategy in line with peers Highly-aligned management team Portfolio is in great physical condition after recent renovations Company currently trading well below estimated private
Slide 8: Well-Defined Strategy
8 Well-Defined Strategy Invest in high quality, high RevPAR hotels (RevPAR > 2x the national average) located in gateway & resort markets Conservative leverage with target (Net Debt + Preferred Equity) / EBITDA of 5.0x or less
Slide 9: Well-Positioned Portfolio
9 58% 27% 10% 4% Ashford Prime Brands by EBITDA Marriott Hilton Sofitel Independent 58% 27% 10% Ashford Prime Managers by EBITDA Marriott Remington Hilton Accor 96% 4% * Ashford Prime MSA by EBITDA Top 25 Other 30% 55% 15% Ashford Prime Segment by EBITDA Upscale Upper-Upscale Luxury *Represents Key
Slide 10: Recently Renovated Portfolio
10 Recently Renovated Portfolio Property Renovation Completion Date Cost/Budget Hilton Torrey Pines Public Space Guestrooms Meeting Rooms 2010-2015 $17,200,000 Capital Hilton Guestrooms Public Space Mechanical Systems 2011-2012 $29,900,000 Pier House Resort Guestrooms Public Space Mechanical Systems
Slide 11: Conservative Capital Structure
Conservative Capital Structure 11 Balance Sheet Initiatives Debt Maturities Net Working Capital Enterprise Value 411.9 8.1 265.1 - 100.0 200.0 300.0 400.0 500.0 2014 2015 2016 2017 2018 De b t ( $ i n m il li o n s) Fixed-Rate Floating-Rate » Target (Net Debt + Preferred)/EBITDA < 5.0x » Maintain mi
Slide 12: Compelling Valuation
12 Compelling Valuation $392,676 $372,334 $318,886 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 Ashford Prime Estimated Replacement Cost Estimated Private Market Value Current Trading Value • Ashford Prime is currently trading well below estimated replacement cost
Slide 13: Chicago Sofitel Transaction
13 Chicago Sofitel Transaction *TTM through 9/30/14 Accomplishments since acquisition: • New General Manager • Approximately $700,000 in annualized cost savings • Increase in RevPAR Index in difficult market conditions • Sofitel Chicago recently ranked 3rd best hotel in Chicago for business traveler
Slide 14: Pier House Resort Transaction
14 Pier House Resort Transaction Property Information: • Location: Key West, FL • Rooms: 142 (including 21 suites) • Year Built: 1968 • 2,600 sf of meeting space • Fee simple • Segmentation: 93% transient; 7% group Acquisition Overview: • Purchase Price: $92.7 million • Purchase Price/Key: $653,000
Slide 15: Growth & Acquisition Strategy
Growth & Acquisition Strategy 15
Slide 16: Growth & Acquisition Strategy
16 Highly quantitative approach focused on long-term accretion Proven track record of value-creating acquisitions Disciplined capital allocation Multiple ways to grow platform: Unique built-in pipeline via option hotel and right-of-first-offer hotels from Ashford Trust Targeted acquisiti
Slide 17: Projected Hotel Room Value Growth
Projected Hotel Room Value Growth 17 Source: JLL/HVS • U.S. hotel transaction volume is likely to increase over the next several years as private U.S. hotel market values rise $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 2000 200
Slide 18: Marriott Gateway & ROFO Hotels
18 Marriott Gateway & ROFO Hotels Hotel Market Rooms Ritz-Carlton Atlanta, GA 444 Rooms Hilton Back Bay Boston, MA 390 Rooms Courtyard Downtown Boston, MA 315 Rooms Embassy Suites Portland, OR 276 Rooms Embassy Suites Crystal City Washington, D.C. 267 Rooms Crowne Plaza Beverly Hills* Los Angeles, C
Slide 19: Accretive Growth
Accretive Growth 19 - Ashford Prime management is focused on accretive growth - Our definition of accretion: the 5-year Total Shareholder Return (TSR) post-transaction must be greater than the 5-year TSR pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (L
Slide 20: Ashford Inc.
ASHFORD INC. 4. ASHFORD
Slide 21: Ashford Inc. Corporate Structure
21 Real Estate Hedged Equity Strategy Ashford Inc. Corporate Structure Publicly traded asset management company (NYSE.MKT:AINC) Asset management platform Fee structure based on 70bps of total enterprise value plus incentive fees based on total shareholder returns vs. peer set Potential Futur
Slide 22: Appendix
APPENDIX 4. ASHFORD
Slide 23: Ashford Family of Companies
23 Ashford Family of Companies - Publicly Traded (NYSE: AHP) - 10 hotels - 3,472 owned rooms - Market Cap of $1.3 billion - High RevPAR portfolio - US & international gateway markets - Lower-leverage platform - Publicly Traded (NYSE: AHT) - 116 hotels – 23,063 owned rooms - Market Cap of $4.3 billio
Slide 24: Industry Overview
Industry Overview 4. ASHFORD
Slide 25: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 25 Attractive Supply/Demand Imbalance Source: PKF -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F Supply Growth Demand Growth Yea r- o v e r- Year % Gro w th PKF Forecast
Slide 26: PKF RevPAR Growth Forecasts
26 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.2% 6.7% 5.8% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth PKF RevPAR Growth Forecasts
Slide 27: Potential Industry EBITDA Growth Rates
27 Potential Industry EBITDA Growth Rates *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resulting from PKF EBITDA change regression equation. • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estima
Slide 28: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 28 Historical Industry Stock Returns Index includes AHT, BEE, DRH, FCH, HST, HT, LHO, and SHO. Companies are included in the data from the time of their IPO Current data as of October 31, 2014 % 50% 100% 150
Slide 29: Executive Bios
Executive Bios 4. ASHFORD
Slide 30: Executive Bios
30 Executive Bios Monty J. Bennett Chief Executive Officer & Chairman of the Board Douglas A. Kessler President Mr. Kessler is the President of Ashford Inc. (NYSE.MKT:AINC) and serves as the President of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He is curr
Slide 31: Executive Bios
31 Executive Bios David A. Brooks Chief Operating Officer, General Counsel & Secretary Mr. Brooks is the Chief Operating Officer, General Counsel & Secretary of Ashford Inc. (NYSE.MKT:AINC) and serves as Chief Operating Officer, General Counsel & Secretary of both Ashford Hospitality Trust (NYSE: AH
Slide 32: Executive Bios
32 Executive Bios J. Robison Hays Senior Vice President, Corporate Strategy & Finance Mr. Hays is the Senior Vice President of Corporate Strategy & Finance of Ashford Inc. (NYSE.MKT:AINC) and serves as the Senior Vice President of Corporate Strategy & Finance of both Ashford Hospitality Trust (NYSE:
Slide 33: Executive Bios
33 Executive Bios Mark L. Nunneley Chief Accounting Officer Mr. Nunneley is the Chief Accounting Officer of Ashford Inc. (NYSE.MKT:AINC) and serves as the Chief Accounting Officer of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He has served as the Chief Acco
Ashford Hospitality Prime — Investor Presentation (November 2014) on 6ix