Summit Hotel Properties, Inc. · NYSE:INN
Summit Hotel Properties — Investor Presentation (June 2015)
23 slides from Summit Hotel Properties's investor presentation, Jun 8, 2015
Slide 1: Summit Hotel Properties Investor Presentation June 2015
Summit Hotel Properties Investor Presentation June 2015
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans
Slide 3: Summit Highlights
SUMMIT HIGHLIGHTS • Recently Announced Portfolio Sale • Unique Focus on Premium Select-Service • Portfolio Transformation Driving Growth • Recycling Capital to Improve Portfolio Quality • Attractive Dividend Yield • Strong, Conservative Balance Sheet 1
Slide 4: Portfolio Disposition – Recent News
PORTFOLIO DISPOSITION – RECENT NEWS TRANSACTION HIGHLIGHTS Seller: Summit Hotel OP, LP (and affiliates) Buyer: American Realty Capital Hospitality Trust, Inc. Hotels: 26 Guestrooms: 2,793 Sales Price: $351.4 million Sales Price per Key: $125,800 Estimated Capital Improvements: $12.4 million Capitali
Slide 5: Portfolio Disposition – Transformational Event
PORTFOLIO DISPOSITION – TRANSFORMATIONAL EVENT The pro forma portfolio (64) represents a premium across all operating metrics as compared to the selected disposition portfolio (26) $81.30 $101.26 $65 $75 $85 $95 $105 Dispositions (26) Pro Forma (64) RevPAR +25% 3 Top 25 Top 50 56% 37% Other 7% Curre
Slide 6: Portfolio Disposition – Selected Financial Data
PORTFOLIO DISPOSITION – SELECTED FINANCIAL DATA For the Trailing Twelve Months ended March 31, 2015 Financial Summary Current Portfolio Disposition Portfolio Pro Forma Portfolio Hotel count 90 26 64 Guestroom count 11,468 2,793 8,675 Occupancy 76.2% 76.1% 76.2% ADR $126.55 $106.79 $132.91 RevPAR $96
Slide 7: Portfolio Disposition – Hotel Schedule
PORTFOLIO DISPOSITION – HOTEL SCHEDULE LOCATION ROOMS ESTIMATED SALE DATE Hampton Inn - Medford, OR 75 Sep-15 DoubleTree - Baton Rouge, LA 127 Sep-15 Fairfield Inn & Suites - Baton Rouge, LA 78 Sep-15 SpringHill Suites - Baton Rouge, LA 78 Sep-15 TownePlace Suites - Baton Rouge, LA 90 Sep-15 Hampton
Slide 8: Years of Execution
OVER 20 YEARS OF EXECUTION 2011 (IPO) 2014 - forward 2012 2013 1991 - 2011 2011 (IPO) 2012 2013 2014 - forward - Predecessor company founded to acquire, develop and operate select-service hotels - Approximately $311.0 million of capital investments from 2007 until our IPO in February 2011 - Prior to
Slide 9: Experienced Leadership Driving Success
EXPERIENCED LEADERSHIP DRIVING SUCCESS Executive Lodging Experience Operations Experience REIT Experience Background Daniel P. Hansen President & Chief Executive Officer 11 years 10 years 4 years Prior to joining Summit, Mr. Hansen spent 11 years with Merrill Lynch in various leadership positions. M
Slide 10: Exceptional Execution of Strategy
EXCEPTIONAL EXECUTION OF STRATEGY 2011 (IPO) 2012 2012 2013 2014 Properties 84 4.8% 88 2.3% 90 Keys 9,019 20.9% 10,908 5.1% 11,463 Occupancy ¹ 70.7% 3.7% 73.3% 3.3% 75.7% ADR ¹ $ 97.90 14.6% $ 112.23 10.5% $ 123.98 RevPAR ¹ $ 69.22 18.8% $ 82.25 14.1% $ 93.83 Hotel EBITDA ¹ / Key $ 8,200 / key 26.8%
Slide 11: Portfolio Transformation – IPO Through March 2015
PORTFOLIO TRANSFORMATION – IPO THROUGH MARCH 2015 Since IPO, we have upgraded the quality of our portfolio by acquiring assets in desirable markets while completing non-strategic dispositions 84 127 70 80 90 100 110 120 130 Dispositions Pro forma Portfolio Average Guestrooms per Hotel $53.91 $96.40
Slide 12: Premium Select-Service Portfolio
PREMIUM SELECT-SERVICE PORTFOLIO 1 As of June 5, 2015 10 Our portfolio consists of 91 premium select-service hotels with top brands, in top markets exhibiting multiple demand drivers and barriers to entry 10
Slide 13: Differentiated Investment Thesis
DIFFERENTIATED INVESTMENT THESIS Unique Approach to Asset Management Strategic Relationships Create Robust Pipeline Focused on Upscale & Diversified Market Methodology Upper Midscale Properties Summit is one of few publicly traded lodging REITs to focus on Upscale and Upper Midscale hotels on a nati
Slide 14: Why Premium Select-Service? Proven Outperformance
WHY PREMIUM SELECT-SERVICE…? PROVEN OUTPERFORMANCE Historical RevPAR Growth: Luxury / Upper Upscale vs. Upscale / Upper-midscale $66 $94 $50 $60 $70 $80 $90 $100 1998 2014 +43% STR Upscale RevPAR ($) $101 $124 $50 $75 $100 $125 $150 1998 2014 +23% STR Upper Upscale RevPAR ($) • Since 1998, STR Upsca
Slide 15: Summit's Track Record of Outperforming
SUMMIT’S TRACK RECORD OF OUTPERFORMING RevPAR Performance 2 : INN Same-Store vs. STR Upscale • Summit’s same-store portfolio RevPAR growth has exceeded the STR Upscale RevPAR growth benchmark for twelve consecutive quarters • The average margin of RevPAR growth outperformance has been approximately
Slide 16: Clear and Consistent Mission
CLEAR AND CONSISTENT MISSION New Orleans, LA 9% San Francisco, CA 8% Denver, CO 6% Dallas, TX 5% Minneapolis, MN 5% Indianapolis, IN 5% Phoenix, AZ 5% Houston, TX 4% Louisville, KY 4% Altanta, GA 4% Austin, TX 3% Portland, OR 3% Flagstaff, AZ 3% Nashville, TN 3% Orlando, FL 3% Jackson, MS 2% Baton R
Slide 17: Summitization
“SUMMITIZATION” By MSA Tier By Franchisor We have executed on our strategy and remain focused on our mission: Maximize Shareholder Returns Through a Portfolio With the Top Brands in Top Markets EBITDA Diversification ¹ By Market • No single market makes up more than 10% of our portfolio EBITDA • No
Slide 18: Capital Recycling
CAPITAL RECYCLING Upgrading Asset Quality to Drive Stronger Results Strategic dispositions of legacy assets to improve the quality of our portfolio and build shareholder value $3,000 $600 $12,600 $5,300 $0 $3,000 $6,000 $9,000 $12,000 Total Revenue Hotel EBITDA San Antonio, TX Austin, TX 1 Amounts i
Slide 19: Value Creation Through Strategic Renovations
VALUE CREATION THROUGH STRATEGIC RENOVATIONS $74.20 $81.13 $79.67 $95.70 $97.97 25.0% 27.0% 29.0% 31.0% 33.0% 35.0% 37.0% 39.0% $65 $70 $75 $80 $85 $90 $95 $100 2011 2012 2013 2014 2015 RevPAR Hotel EBITDA margins 17 ¹ Operating results from prior owner are presented for 2011 and 2012; the Company’s
Slide 20: Value Creation Through Brand Conversion
VALUE CREATION THROUGH BRAND CONVERSION Upside From Renovation 1 $10,000 $12,500 $2,600 $3,800 $104.50 $133.68 $95 $100 $105 $110 $115 $120 $125 $130 $135 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Pre-Conversion ¹ Post Brand Conversion ² RevPAR *in millions Total Revenue Hotel EBITDA RevPAR 18
Slide 21: Strong and Well Covered Dividend
STRONG AND WELL COVERED DIVIDEND 1 SNL data based on closing price on June 2, 2015 2 SNL data based on 2015 FactSet Consensus FFO estimates as of June 1, 2015 Current Dividend Yield 1 Price per Key Valuation 3 5.6% Total Enterprise Value / 2015E EBITDA 1 4.5% 4.3% 4.3% 4.3% 4.1% 4.0% 3.8% 3.5% 2.9%
Slide 22: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Unsecured Revolving Credit Facility Unsecured Term Loan 7-Year Unsecured Term Loan 5-Year Secured Non-Recourse Loans Secured Recourse Loans Debt Maturity Schedule 5 REIT Credit Statistics and Debt Overview Total De
Slide 23: Summit Hotel Properties
Summit Hotel Properties NYSE:INN
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