Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Proxy Contest (June 2016)
24 slides from Braemar Hotels & Resorts's proxy contest presentation, Jun 1, 2016
Slide 1: Investor Presentation – June 2016
Investor Presentation – June 2016
Slide 2: Forward-looking statements
Certain statements and assumptions in this presentation contain or are based upon “forward-looking” information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties.
Slide 3: Background on Ashford Prime
Background on Ashford Prime 3 Ashford Hospitality Prime, Inc. ("Ashford Prime" or the "Company")(NYSE: AHP) was created in November 2013 through a spin-off of 8 high quality hotels from Ashford Hospitality Trust, Inc. ("Ashford Trust")(NYSE: AHT) The spin-off was a way to unlock value for stockh
Slide 4: Recent Updates
Recent Updates 4 In May 2016 the US District Court for the Northern District of Texas rejected Sessa's motion for preliminary injunction ending the proxy contest Proxy advisory firm Glass Lewis recommends Ashford Prime stockholders vote "FOR" all Ashford Prime Directors Excellent progress on s
Slide 5: Excellent Progress on Strategic Alternatives
In discussions Interviewing highly-qualified, independent candidates Actively in market purchasing shares; bought back approximately 490,000 shares for $5.5 million as of May 27, 2016 Investment has been redeemed Increased dividend 20% to $0.12 Courtyard Seattle under contract for $84.5
Slide 6: Ashford Hospitality Prime Vision
Ashford Hospitality Prime Vision Well defined strategy investing in luxury hotels in gateway and resort markets 6 Bardessono Hotel & Spa Yountville, CA Pier House Resort Key West, FL The Ritz-Carlton St. Thomas St. Thomas, USVI Grow platform through accretive acquisitions of high quality assets
Slide 7: Strong Operational Performance
7 STRONG OPERATIONAL PERFORMANCE 7.3% RevPAR growth in 2015 was the highest amongst our peers Portfolio RevPAR of $199 in 2015 is second amongst our peers 1.4% 3.3% 4.7% 5.7% 5.9% 7.3% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% LHO PEB DRH CHSP SHO AHP $162 $171 $186 $194 $199 $205 $150.00 $160.00
Slide 8: Prudent, Accretive Growth and Conservative Capital Structure
$140.20 $148.64 $171.35 $199.43 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 2012 2013 2014 2015 8 AHP Leadership Has Delivered Results in Prudent, Accretive Growth ACCRETIVE GROWTH OF HOTEL PORTFOLIO CONSERVATIVE CAPITAL STRUCTURE Acquired the Ritz-Carlton St. Thomas, Bardessono Hotel & Spa, Sofi
Slide 9: Returning Capital to Shareholders
9 $0.05 $0.10 $0.12 $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 2013 Q2 15 2016 $0.26 $0.38 $0.00 $0.10 $0.20 $0.30 $0.40 Q1 15 Q1 16 AHP Leadership Has Delivered Results in Returning Capital to Shareholders Increased quarterly common dividend by 140% since spin-off Q1 2016 AFFO per share growth
Slide 10: Highly Aligned Management Team
15%* 5.7% 3.4% 3.3% 3.3% 2.3% 2.2% 1.9% 1.8% 1.3% 1.2% 0.8% 0.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% AHP HT RLJ CLDT FCH Peer Avg CHSP INN HST PEB DRH SHO LHO 10 HIGHLY ALIGNED MANAGEMENT TEAM Insider ownership of 15%, 6x more than hotel REIT industry average Insider ownership among
Slide 11: Benefits of the Ashford Structure
Benefits of the Ashford Structure 11 Structural Attractiveness • Publicly traded external advisor increases transparency and provides strong alignment • 7 member Board with 5 independent directors • Base Fee – based on AHP’s total enterprise value rather than book value • Incentive Fee paid only if
Slide 12: Management Team is Experienced and Qualified
Ashford Prime’s Management Team is Experienced and Qualified 12 Aggregate 139 Years of Relevant Industry Experience 27 years of hospitality experience 13 years with Ashford (14 years with Ashford predecessor) Cornell School of Hotel Administration BS Cornell S.C. Johnson MBA Montgomery J. Be
Slide 13: Long Term Track Record of Creating Value at Ashford Trust
65% -22% -38% -18% 119% 29% 24% 36% 82% 24% 12% 99% 169% 41% -21% 23% -50% 0% 50% 100% 150% 200% Inception 10-Yr 9-Yr 8-Yr 7-Yr 6-Yr 5-Yr 4-Yr Peer Avg AHT Management's Long Term Track Record of Creating Value at Ashford Trust 13 (1) Since IPO on August 26, 2003 Peer average includes: CHSP, CLDT, DR
Slide 14: AHP Outperformance vs. Named Peers
8.7% 17.4% -12.8% 1.8% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% From Start of Strategic Review (8/27/15) to Present (5/25/16) From Start of Strategic Review (8/27/15) to Day Before Sessa Slate Announcement (1/14/16) From Day Before Sessa Slate Announcement (1/14/16) to Strategic Review Conclu
Slide 15: High Quality Portfolio
High Quality Portfolio 15 Ashford Prime Hotels Courtyard Seattle Downtown Seattle, WA 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 Chicago Sofitel WaterTower Chicago, IL Courtyard Philad
Slide 16: Hotel portfolio metrics
Number of TTM TTM TTM TTM Hotel % of Location Rooms ADR (1) Occ. (1) RevPAR(1) EBITDA(1) Total Courtyard Philadelphia Downtown Philadelphia, PA 499 $175 82% $144 $12,236 9.8% Marriott Plano Legacy Dallas, TX 404 $196 71% $138 $11,130 8.9% Courtyard San Francisco Downtown San Francisco, CA 405 $277 9
Slide 17: Asset Management Initiatives
Asset Management Initiatives 17 Pier House: Complexed GM and sales team resulting in significant labor savings Renaissance Tampa: Recently completed significant guestrooms and lobby renovation; listed for sale with broker Bardessono: Evaluating construction of presidential villa consisting of 3 larg
Slide 18: Capital Structure and Net Working Capital
Capital Structure and Net Working Capital Conservative leverage in line with platform strategy Targeted Net Debt / EBITDA of 5.0x All debt is non-recourse, property level mortgage debt Targeted cash balance of 25% to 30% of market capitalization Maintain excess cash balance to capitalize o
Slide 19: Debt Maturities and Leverage
$338.3 $8.1 $80.0 $152.0 $194.7 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 2016 2017 2018 2019 2020 Thereafter Fixed-Rate Floating-Rate Debt Maturities and Leverage Target leverage: Net Debt / EBITDA < 5.0x Pro forma Net Debt / EBITDA of approximately 5.4x after sale of C
Slide 20: Asset Management Expertise – Bardessono
Asset Management Expertise – Bardessono 20 Acquired in July 2015 2015 RevPAR of $564 62 keys, 1,350 sq. ft. of meeting space Located in Yountville, CA the “Culinary Capital of Napa Valley” High barrier to entry market One of only three LEED Platinum certified hotels in the U.S., only hot
Slide 21: Asset Management Expertise – Pier House
Asset Management Expertise – Pier House 21 Asset management performance significantly exceeded underwriting Eliminated $1.5mm in expenses through cost cutting initiatives: Right-sized staffing level Implemented improved housekeeping practices Identified additional F&B efficiencies Realiz
Slide 22: Asset Management Expertise – Ritz St. Thomas
Asset Management Expertise – Ritz St. Thomas 22 The Ritz-Carlton St. Thomas Acquired in December 2015 180 keys, 10,000 sq. ft. of meeting space Acquisition completed at favorable metrics of 7.2x TTM EBITDA and 10% TTM NOI cap rate Located in St. Thomas in the U.S. Virgin Islands with high ba
Slide 23: Key Takeaways
Key Takeaways 23 Announced planned sale of the Courtyard Seattle Downtown Commenced execution of strategic alternatives initiatives to enhance stockholder value The proxy contest is over with ruling of the Federal Court Highly-aligned management team Maximizing shareholder value is our #1 objective
Slide 24: Investor Presentation – June 2016
Investor Presentation – June 2016
Ashford Hospitality Prime — Proxy Contest (June 2016) on 6ix