Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (July 2009)
23 slides from Diamondrock Hospitality's investor presentation, Jul 15, 2009
Slide 1: Investor Presentation July 2009
Investor Presentation July 2009
Slide 2: DiamondRock Overview
2 DiamondRock Overview
Slide 3: DiamondRock at a Glance
DiamondRock at a Glance Market Valuation: Share Price (7/10/09): $5.42 Shares Outstanding: 108.0mm Market Capitalization: $585.4mm Net Debt: $778.4mm Enterprise Value: $1,363.8mm EV / 2009 EBITDA(1): 11.6x Price / 2009 FFO per Share(1): 6.9x EV per Key: $142,270 3 Per SNL First Call Consensus Estima
Slide 4: Company History
Company History Formed in 2004 with $210 million private placement of common stock, including $30 million investment by Marriott International. Acquired 7 hotels between October 2004 and January 2005. Raised over $310 million in May 2005 Initial Public Offering. Used proceeds to acquire 8 hotels bet
Slide 5: Experienced Management Team
Experienced Management Team 5 Mark Brugger, Chief Executive Officer A founder of DiamondRock Hospitality Over 15 years of real estate experience Extensive lodging and finance experience at Marriott Other experience in land development and investment sales John Williams, President and Chief Operating
Slide 6: Portfolio Overview
Portfolio Overview 6 DiamondRock owns a diversified portfolio of premium branded hotels concentrated in key gateway cities and destination resorts. Market Concentration (% of EBITDA) Brand Concentration (% of EBITDA)
Slide 7: Lodging Fundamentals
7 Lodging Fundamentals
Slide 8: Industry fundamentals remain challenging
Industry fundamentals remain challenging Industry experts project a 17 - 20% RevPAR decline in 2009 (after a 2.0% decline in 2008) Marriott (-17 to -20%; -18.5% midpoint); PKF (-17.5%); STR (-17.1%) Supply above the long-term industry average in 2008 and 2009 after four years of below average supply
Slide 9: RevPAR Trends for DRH Portfolio
RevPAR Trends for DRH Portfolio DRH has not seen compelling evidence indicating fundamentals have hit bottom. DRH has realized 14 consecutive periods of RevPAR decline since Period 6, 2008. The rate of RevPAR deterioration accelerated through Period 5, 2009. Despite the difficult operating condition
Slide 10: Trends by Segment Type (YTD thru Q2 2009)
Trends by Segment Type (YTD thru Q2 2009) 10 Group Revenues down 17.6% YTD (-5.6% Rate, -12.7% Rooms) Booking Pace for FY09 at Q2 end is -19% (mostly rooms), down from -7% at end of 2008 and -14.5% at end of Q1 Boston +4.4%; Chicago Marriott -13.6% FY09 Group Revenue on books at Q2 is 77% of 2008 Gr
Slide 11: Supply Trends for DRH Portfolio
Supply Trends for DRH Portfolio DRH tracks supply trends in its 10 major markets, focused primarily on total supply in the immediate submarket as defined by STR / Lodging Econometrics Supply is expected to decline sharply beginning in 2011 due to financing constraints and the valuation discount to r
Slide 12: DiamondRock Initiatives
12 DiamondRock Initiatives
Slide 13: Strategies for 2009 and beyond
Strategies for 2009 and beyond Focused Asset Management Monitor industry fundamentals and adjust strategies accordingly Emphasize continued cost containment at property level Assess additional ROI opportunities Energy Management Initiatives $5 million targeted for energy efficiency ROI investments $
Slide 14: Cost Containment and Margin Improvement Initiatives
Cost Containment and Margin Improvement Initiatives DRH has identified an incremental $8 million in cost savings at the property level beyond what was incorporated into the original operating budgets Margin comparisons at comparable RevPAR declines become harder beginning in Q2 2009 as cost continge
Slide 15: Cost Containment - Examples and Case Studies
Cost Containment - Examples and Case Studies DRH has identified cost savings at each asset, including such measures as closing F&B outlets, reducing newspaper delivery, switching from fresh to frozen food items, charging a copay for the staff cafeteria, and redesigning menus. Presented below are two
Slide 16: Energy Management Initiatives
Energy Management Initiatives DRH has allocated $5 million of capital to the implementation of energy saving programs at the property level. The current status of the program: Three primary categories of investment: Kitchen Exhaust Hood Variable Frequency Drives (VFD): Most hoods operate at a consta
Slide 17: Positioned to Take Advantage of Coming Opportunities
Positioned to Take Advantage of Coming Opportunities 17 Strong Balance Sheet Marriott "First Look" Relationship Facilitated 8 acquisitions Regular pipeline meetings Management team sourced 7 off-market transactions via industry relationships Process likely to be muted, not tidal wave DRH size allows
Slide 18: CMBS Market Will Present Opportunities, But When?
CMBS Market Will Present Opportunities, But When? 18 The near-term peak in maturities for CMBS debt issued during 2005 to 2007 is not until 2012. A large portion of the 2016 and 2017 maturities are associated with the M&A and large portfolio transactions that occurred in 2006 and 2007. Unclear how s
Slide 19: DiamondRock Capital Structure
19 DiamondRock Capital Structure
Slide 20: Capital Structure Strategies for 2009 and beyond
Capital Structure Strategies for 2009 and beyond Continue to Defend the Balance Sheet Complete refinancing of Courtyard Midtown East Deleverage through repayment of debt on Griffin Gate Marriott and Bethesda Marriott Suites Evaluate opportunities for further deleveraging Continue regular conversatio
Slide 21: DiamondRock Capital Structure
DiamondRock Capital Structure(1) 21 Courtyard Midtown East (Sept. 2014) EBITDA: $12.3mm; Debt: $43.0mm at 8.81% Salt Lake City Marriott (Jan. 2015) EBITDA: $6.4mm; Debt: $34.1mm at 5.50% Los Angeles Airport Marriott (July 2015) EBITDA: $13.4mm; Debt: $82.6mm at 5.30% Worthington Renaissance (July 20
Slide 22: Debt Maturities Addressed for Next Years
Debt Maturities Addressed for Next 5 Years(1) 22 Mortgage debt maturities addressed for next 5 years Assumptions: Courtyard Midtown East loan is refinanced. Griffin Gate Marriott and Bethesda Marriott Suites loans are paid with cash on hand. Company elects to pay a portion of its 2009 dividend in st
Slide 23: Safe Harbor
Safe Harbor Certain statements made during this presentation are forward-looking and are subject to risks and uncertainties. Many of these risks and uncertainties are discussed in the prospectus supplement and in the Company's filings with the Securities and Exchange Commission, all of which you sho
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