Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Investor Presentation (January 2018)
32 slides from Braemar Hotels & Resorts's investor presentation, Jan 23, 2018
Slide 1: Company Presentation January 2018
January 2018 ZS ASHFORD HOSPITALITY PRIME
Slide 2: Forward Looking Statements and Non-GAAP Measures
Company Presentation // January 2018 Forward Looking Statements and Non-GAAP Measures 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
Slide 3: Management Team
Company Presentation // January 2018 Management Team 3 20 years of hospitality experience 1 year with Ashford 15 years with Morgan Stanley Cornell School of Hotel Administration, BS University of Pennsylvania MBA RICHARD J. STOCKTON Chief Executive Officer & President 17 years of hospita
Slide 4: Strategic Overview
Company Presentation // January 2018 Strategic Overview 4 Bardessono Hotel & Spa Yountville, CA Pier House Resort Key West, FL The Ritz-Carlton St. Thomas St. Thomas, USVI Focused strategy of investing in luxury hotels and resorts Grow organically through strong revenue and cost control initiatives
Slide 5: Q3 Earnings Highlights
Company Presentation // January 2018 Q3 Earnings Highlights 5 • Comparable RevPAR for all hotels decreased 5.3% to $211.36 during Q3 • Comparable RevPAR for all hotels not under renovation decreased 2.9% to $204.72 during Q3 • Comparable Hotel EBITDA flow-through for all hotels was 72% for Q3 • Comp
Slide 6: Recent Developments
Company Presentation // January 2018 Recent Developments 6 Announced Refined Strategy & Amendment to Advisory Agreement Common Equity & Convertible Preferred Equity Raise Acquisition of Park Hyatt Beaver Creek Acquisition of Hotel Yountville Stockholders Approve Amendment to Advisory Agreement Annou
Slide 7: High-Quality Hotels in Leading Urban & Resort Markets
Company Presentation // January 2018 High-Quality Hotels in Leading Urban & Resort Markets 7 Non-Core Assets Marriott Seattle Seattle, WA Hilton Torrey Pines La Jolla, CA Bardessono Hotel & Spa Yountville, CA Pier House Resort Key West, FL Renaissance Tampa Tampa, FL Sofitel Chicago Magnificent Mile
Slide 8: Hotel portfolio metrics: rooms, ADR, occupancy, RevPAR, EBITDA
Company Presentation // January 2018 Number of TTM TTM TTM TTM Hotel % of Core Location Rooms ADR(1) OCC(1) RevPAR(1) EBITDA(1),(2) Total Bardessono Napa Valley, CA 62 $779 82% $640 $5,380 4.2% Hotel Yountville Napa Valley, CA 80 $555 80% $442 $6,232 4.9% Ritz-Carlton St. Thomas St. Thomas, USVI 180
Slide 9: Why We Focus on Luxury
Company Presentation // January 2018 Why We Focus on Luxury 9 (1) Total nominal growth from December 1987 to July 2017 Source: STR Greatest long-term RevPAR growth of 229%(1) LUXURY Second greatest long- term RevPAR growth of 150%(1) UPPER-UPSCALE 0 50 100 150 200 250 300 350 D e c -8 7 A u g -8 8 A
Slide 10: Long-Term Trading Premium
Company Presentation // January 2018 Long-Term Trading Premium 10 Source: STR, SNL Top Quartile: BEE, PEB, LHO Peers: AHT, CLDT, CHSP, DRH, FCH, HT, HPT, HST, INN, RLJ, SHO The top quartile of lodging REITs (by RevPAR) have consistently had higher quality assets and traded at a premium relative to o
Slide 11: Highly Aligned Management Team
Company Presentation // January 2018 Highly Aligned Management Team 11 Management has significant personal wealth invested in the Company REIT Avg includes: AHT, HT, APLE, CLDT, CHSP, RLJ, PEB, INN, HST, DRH, SHO, XHR, LHO, PK Source: Company filings * Insider equity ownership for Ashford Prime incl
Slide 12: Asset Management Overview
Company Presentation // January 2018 Asset Management Overview 12 TEAM • 1 - EVP • 10 - Asset managers • 2 - Revenue optimization • 3 - Risk & Insurance • 4 - Capex specialists • 2 - Legal • 1 - Property tax specialist • 4 - Analysts MEETINGS WITH PROPERTY MANAGEMENT • Asset manager has a weekly mee
Slide 13: Past Operating Performance Relative to Peers
Company Presentation // January 2018 Past Operating Performance Relative to Peers 13 RevPAR Growth 2.4% 4.3% 2.4% 1.7% 1.3% 0.4% Hotel EBITDA Growth 3.7% 5.0% 2.2% 2.5% 0.2% -1.6% 0.4% -0.6% 2.9% -2.9% 2016 2.5% 0.8% 2.1% -5.2% 2016 Q3 2016 Q4 2017 Q1 2017 Q2 Peers: CHSP, PEB, DRH, LHO, SHO • Prime
Slide 14: Case Study – The Ritz-Carlton St. Thomas
Investor and Analyst Day // New York Case Study – The Ritz-Carlton St. Thomas 14 MAKE CHART RATHER THAN TABLE; INCLUDE EBITDA FLOWTHROUGH 2016 (1st Full Year of Ownership) 450 83% RPI INCREASE (BPS) HOTEL EBITDA FLOW-THROUGH Ritz Carlton St. Thomas Quarterly Performance 2016 Q1 2016 Q2 2016 Q3 2016
Slide 15: Case Study – Pier House Resort
Company Presentation // January 2018 Case Study – Pier House Resort 15 Ashford Prime acquired in early 2014 for $92.7 million 2015 2.5% 255 86% RPI GROWTH HOTEL EBITDA MARGIN INCREASE (BPS) HOTEL EBITDA FLOW-THROUGH 2016 4.9% 170 206% RPI GROWTH HOTEL EBITDA MARGIN INCREASE (BPS) HOTEL EBITDA FLOW-
Slide 16: Case Study – Bardessono Hotel & Spa
Company Presentation // January 2018 Case Study – Bardessono Hotel & Spa 16 • Acquired in July 2015 for $85 million and installed affiliated property manager Remington • Proven ability to outperform 2016 (First Full Year of Ownership) 10% 518 242% REVPAR GROWTH HOTEL EBITDA MARGIN INCREASE (BPS) HOT
Slide 17: Opportunity – Bardessono Resort and Spa
Investor and Analyst Day // New York Opportunity – Bardessono Resort and Spa 17 Received approval to construct luxury villa consisting of 3 large keys, hospitality suite and private auto court Favorable ground lease amendment to capture adjacent parcel Unsatisfied demand for large luxury rooms
Slide 18: External Growth – Luxury Markets
Company Presentation // January 2018 External Growth – Luxury Markets 18 TOP 15 LUXURY MARKETS BY ROOMS(1) (1) Based on information provided by STR for luxury class as of May 2017 Market Hotels Rooms Las Vegas 18 26,273 New York 71 17,288 Miami 51 13,132 Los Angeles 53 11,340 Hawaii 28 8,398 San Fra
Slide 19: Target Market Analysis
Company Presentation // January 2018 0 5 10 15 20 25 30 35 40 45 50 Fundamentals Market Size Pricing Target Market Analysis(1) 19 (1) Based on internal analysis Market Size Fundamentals Pricing Desirability
Slide 20: Acquisition Rationale – Hotel Yountville
Investor and Analyst Day // New York Acquisition Rationale – Hotel Yountville 20 Expected Savings by Department ROOMS OTHER DEPARTMENT SALES & MARKETING EXPENSES • Acquired 80-room Hotel Yountville in May 2017 • Announced TTM NOI cap rate at time of acquisition: 6.2% F&B ADMINISTRATIVE & GENERAL EXP
Slide 21: Acquisition Rationale – Park Hyatt Beaver Creek
Investor and Analyst Day // New York Acquisition Rationale – Park Hyatt Beaver Creek 21 • Acquired 190-room Park Hyatt Beaver Creek in March 2017 • Announced TTM NOI cap rate at time of acquisition: 6.0% Q2 2017 (First Full Quarter of Ownership) 19.7% 613 68% REVPAR GROWTH HOTEL EBITDA MARGIN INCREA
Slide 22: Conservative Capital Structure
Company Presentation // January 2018 Conservative Capital Structure(1) 22 45% TARGET LEVERAGE Net Debt Gross Assets (1) As of September 30, 2017 Non-recourse debt lowers risk profile of the platform OVERVIEW Floating-rate debt provides a natural hedge to hotel cash flows Maximizes flexibility in all
Slide 23: Cash Management Strategy
Company Presentation // January 2018 Cash Management Strategy 23 (1) As of September 30, 2017 (2) Adjusted for sale of the Marriott Plano Legacy (3) At market value as of 1/12/2018 NET WORKING CAPITAL(1) 10-15% CASH TO GROSS DEBT TARGET 18% CURRENT CASH TO GROSS DEBT(2) Defend our assets at financin
Slide 24: Value-Add Refinancings, Interest Rate Improvement, Cash Flow and Dividends
Company Presentation // January 2018 Value-Add Refinancings Long-Term Interest Rate Improvement Cash Flow and Dividends 24 (1) As of September 30, 2017 (2) GAAP reconciliation in appendix $12M 3-PACK REFI - JAN 2017 $43M CAD(1),(2),(3) 4.0% SEP 2017 Expected Cash Flow Savings $1M BARDESSONO REFI - A
Slide 25: Debt Maturities
Company Presentation // January 2018 $80.0 $112.0 $190.5 $436.1 0 50 100 150 200 250 300 350 400 450 500 2017 2018 2019 2020 2021 Thereafter Fixed-Rate Floating-Rate Laddered debt maturities Debt Maturities 25 2019 NEXT HARD DEBT MATURITY 2.1x FCCR OVERVIEW(1) (1) As of September 30, 2017 (2) Adjust
Slide 26: Valuation Opportunity
Company Presentation // January 2018 AHP SHO DRH CHSP LHO PEB Valuation Opportunity 26 (1) As reported by company earnings releases (2) Pro forma for acquisitions of Park Hyatt Beaver Creek and Hotel Yountville and sale of Marriott Plano Legacy TEV / 2018E EBITDA MULTIPLE(3),(4) PRICE / 2018E AFFO /
Slide 27: Ashford Prime Portfolio Implied Equity Value
Company Presentation // January 2018 ASHFORD PRIME PORTFOLIO *(ADJUSTED FOR SALE OF MARRIOTT PLANO) (millions) Low-End High-End TTM NOI*(5) $100.2 $100.2 Cap Rate(6) 7.5% 6.5% Implied Value $1,337 $1,543 NWC*(7),(8) $167 $167 Preferred Equity(7) ($124) ($124) Debt*(7) ($771) ($771) Implied Equity Mk
Slide 28: Hurricane Irma Update
Company Presentation // January 2018 Hurricane Irma Update 28 Accepting reservations and has resumed full operations PIER HOUSE RESORT Working with insurers to assess the damage and will be examining the implementation of a planned renovation program THE RITZ-CARLTON ST. THOMAS Online reservations s
Slide 29: Key Takeaways
Company Presentation // January 2018 Key Takeaways 29 Bardessono Hotel & Spa Yountville, CA Pier House Resort Key West, FL The Ritz-Carlton St. Thomas St. Thomas, USVI Highest Quality Portfolio Amongst All Lodging REITs…In The Segment With Greatest Growth Trajectory Growing Organically: Rigorous Ass
Slide 30: Appendix
Appendix
Slide 31: Reconciliation of Net Income (Loss) to Hotel NOI
Company Presentation // January 2018 Reconciliation of Net Income (Loss) to Hotel NOI 31 Three Months Ended Three Months Ended Three Months Ended Three Months Ended TTM Ended September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2017 Net income (loss) 10,705$ 21,607$ 14,951
Slide 32: Reconciliation of Net Income (Loss) to Cash Available for Distribution
Company Presentation // January 2018 Reconciliation of Net Income (Loss) to Cash Available for Distribution 32 Three Months Ended Three Months Ended Three Months Ended Three Months Ended TTM Ended September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2017 Net income (loss)
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