Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — NAREIT REITweek June 2015
22 slides from Braemar Hotels & Resorts's conference presentation, Jun 9, 2015
Slide 1: Ashford Hospitality Prime - NAREIT June 2015
JX ASHFORD HOSPITALITY PRIME NAREIT - June 2015
Slide 2: Safe Harbor
2 Safe Harbor 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: Compelling Opportunity
Compelling Opportunity 3
Slide 4: Well-Defined Strategy
4 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 5: Compelling Opportunity
5 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 Recently announced 100% increase in common dividend
Slide 6: Ashford Prime Portfolio
6 Portfolio Hotel Market Rooms Marriott Seattle Waterfront Seattle, WA 358 Rooms Courtyard Seattle Downtown Seattle, WA 250 Rooms Courtyard Downtown San Francisco, CA 405 Rooms Hilton La Jolla Torrey Pines La Jolla, CA, 394 Rooms Marriott Plano Legacy Plano, TX 404 Rooms Sofitel Water Tower Chicago,
Slide 7: Aligned Management & Strong Performance
Aligned Management & Strong Performance 7
Slide 8: Highly-Aligned Management
Highly-Aligned Management 8 • With insider ownership* of approximately 14% 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 9: Strong RevPAR Growth
Strong RevPAR Growth 9 FY 2014 RevPAR Growth Source: Company filings. • Ashford Prime has delivered strong RevPAR growth versus its peers 11.6% 9.2% 8.8% 8.3% 6.8% 6.3% 5.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% DRH PEB LHO AHP SHO BEE CHSP Q1 2015 RevPAR Growth 11.0% 10.8% 7.9% 7.0% 5.4% 3.6%
Slide 10: Strong Asset Performance
10 2013 2014 Var Q1 2014 Q1 2015 Var RevPAR $158.26 $171.35 8.3% $147.49 $163.35 10.8% Hotel Revenue $294,250 $314,583 6.9% $70,275 $77,749 10.6% Hotel EBITDA $96,321 $104,798 8.8% $20,217 $23,523 16.4% EBITDA Flow 41.7% 44.2% The above table assumes the 10 properties owned and included in continuin
Slide 11: Conservative Capital Structure
Conservative Capital Structure 11 Balance Sheet Initiatives Debt Maturities - - 394.0 8.1 - 80.0 - 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 2015 2016 2017 2018 2019 De b t ( $ i n m il li o n s) Fixed-Rate Floating-Rate • Target (Net Debt + Preferred)/EBITDA < 5.0x • Maintain mix of fixe
Slide 12: Significant Liquidity
Significant Liquidity 12 Net Working Capital (1) (2) Enterprise Value • Maintain excess cash balance to capitalize on opportunities • Significant additional value through net working capital balance (1) Ashford Prime's pro rata share (2) As of 3/31/15 $ in millions Cash and cash equivalents $158.3 R
Slide 13: Strong Industry Fundamentals
Strong Industry Fundamentals 13
Slide 14: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 14 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 2014 2015F Supply Growth Demand Growth Yea r- o v e r- Year % Gro w th PKF Forecast
Slide 15: PKF RevPAR Growth Forecasts
15 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.3% 7.2% 6.8% -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 16: Potential Industry EBITDA Growth Rates
16 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 17: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 17 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 May 31, 2015 % 50% 100% 150% 20
Slide 18: Growth & Acquisition Strategy
Growth & Acquisition Strategy 18
Slide 19: Growth & Acquisition Strategy
19 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 right-of-first-offer hotels from Ashford Trust Targeted acquisitions consistent wi
Slide 20: Accretive Growth
Accretive Growth 20 - Ashford Prime management is focused on accretive growth - Our definition of accretion: the 5-year Total Return (TR) post-transaction must be greater than the 5-year Total Return pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (Lever
Slide 21: Ashford Prime Recent Developments
21 Ashford Prime Recent Developments Q1 2015 marks three consecutive quarters of double-digit RevPAR growth In May, the Company announced a 100% increase in its common dividend Q1 2015 RevPAR up 10.8%, Hotel EBITDA up 16.4% and EBITDA flow-through was 44%
Slide 22: Ashford Hospitality Prime
JX ASHFORD HOSPITALITY PRIME NAREIT - June 2015
Ashford Hospitality Prime — NAREIT REITweek June 2015 on 6ix