Rlj Lodging Trust · NYSE:RLJ
Rlj Lodging Trust — Investor Presentation (September 2012)
32 slides from Rlj Lodging Trust's investor presentation, September 2012
Slide 1: Investor Presentation
Investor Presentation September 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning
Slide 3: RLJ Lodging Trust Overview
RLJ Lodging Trust Overview • Predecessor RLJ Development, LLC was founded in 2000 by Robert L. Johnson and Thomas J. Baltimore, Jr. – Raised $2.2 billion in capital commitments in three lodging-focused private equity funds and completed $5.8 billion of hotel acquisitions and dispositions • Successfu
Slide 4: Investment Highlights – Reasons to Invest in RLJ
Investment Highlights – Reasons to Invest in RLJ • Seasoned management team with successful track record • Proven and disciplined investment strategy • Strong internal and external growth • Strong platform/significant scale and high quality portfolio • Low levered, conservative balance sheet • Activ
Slide 5: Near Term Catalysts – More Reasons to Invest in RLJ
Near Term Catalysts – More Reasons to Invest in RLJ • Compelling relative valuation • Six of seven brand conversions completed; generating outsized returns • Two year renovation plan largely finished; including $25 million renovation of Doubletree by Hilton Metropolitan New York City • Unwavering co
Slide 6: 2012 Strategic Priorities
2012 Strategic Priorities Continue to execute proven investment strategies Drive operating performance − Increase RevPAR premiums and operating margins through aggressive asset management and asset repositioning Prudent capital allocation − Continue to enhance portfolio quality through selective a
Slide 7: Public Guidance – 2012
Public Guidance – 2012 RLJ updated its annual guidance based on second quarter performance, new acquisitions, and current trends • RLJ posted solid second quarter results and increased the Company’s outlook for the year − Pro forma RevPAR increased 8.6%, excluding renovation disruption (1) − Pro for
Slide 8: RLJ vs. Lodging REIT Peers
RLJ vs. Lodging REIT Peers TEV/2012E EBITDA (1) TEV/2013E EBITDA (1) 25.0x 18.0x 16.4x 20.4x 20.0x 15.0x 13.9x 13.7x 13.2x 12.7x 12.7x 12.6x 15.9x 11.3x 11.3x 15.4x 14.5x 14.3x 14.1x 12.0x 11.1x 10.9x 10.6x 10.5x 14.0x 13.9x 15.0x 13.1x 12.9x 12.6x 12.3x 11.8x 9.0x 10.0x 6.0x 5.0x 3.0x 0.0x 0.0x PEB
Slide 9: Experienced Management with Proven Track Record
Experienced Management with Proven Track Record Deep and experienced senior management team that has worked together for over ten years and has over 150 years of combined lodging and real estate experience • Strong platform with significant expertise in acquisitions, asset management and portfolio m
Slide 10: Proven Investment Strategy
Proven Investment Strategy Create shareholder value through prudent capital investments and aggressive asset management • Acquire premium branded focused-service and compact full-service hotels with Marriott, Hilton and Hyatt flags Investment Thesis – Courtyard by Marriott, Hilton Garden Inn, Hyatt
Slide 11: Superior Focused-Service / Compact Full-Service Model
Superior Focused-Service / Compact Full-Service Model Target premium branded focused-service and compact full-service hotels J.D. Power & Associates 2011 North American Hotel Guest Satisfaction Guest Satisfaction Ranking Strong Among… Rank Brand Loyalty Programs 1 Extended Stay Chains 2 2 Worldwide
Slide 12: Focus on Leading Brands and Strong Segments
Focus on Leading Brands and Strong Segments RLJ’s portfolio of 144 focused-service and compact full-service hotels operate under premium brands: Marriott, Hilton and Hyatt • Upscale focused-service and compact full-service hotels generate superior margins − Superior profitability through cycle Hotel
Slide 13: Geographic Diversification and Strong Market Presence
Geographic Diversification and Strong Market Presence RLJ owns more than 21,300 rooms across 20 states and the District of Columbia Hotel Portfolio Diversification (1) Geographic Diversification 66% of EBITDA from Top 6 Markets Midwest 20% 19% Northeast 16% 12% 11% 11% 10% 8% 8% 7% 4% 0% West South
Slide 14: Continued RevPAR Growth
Continued RevPAR Growth RLJ’s 2Q 2012 RevPAR growth outperformed most public lodging REIT peers • Solid Pro forma RevPAR growth: Increased 8.6%, excluding renovation disruption − Pro forma RevPAR including disruption grew 7.1% driven by an ADR increase of 5.2% and an occupancy increase of 1.8% 2Q 20
Slide 15: Portfolio Highlights
Portfolio Highlights RLJ continues to enhance the quality of its portfolio through accretive acquisitions and complex repositioning efforts • RLJ’s top 30 hotels, which are intensely urban, represent 57% of the Company’s Hotel EBITDA – Average daily rate at a 32% premium relative to the total portfo
Slide 16: Disciplined Investment Strategy
Disciplined Investment Strategy Continue to execute investment strategy in core urban markets • Purchase assets that represent a significant discount to replacement cost • Enter markets that exhibit multiple demand generators and dynamic growth • Leverage industry relationships to purchase off-marke
Slide 17: Significant Growth Potential
Significant Growth Potential
Slide 18: Existing Portfolio Positioned for Outsized Growth
Existing Portfolio Positioned for Outsized Growth Strong growth embedded within existing portfolio • Acquired 28 assets for a total purchase price of more Portfolio Mix Change than $1.2 billion over 30 months in core urban markets: – New York City, Washington D.C., Los Angeles • Approximately $210 m
Slide 19: Peak Analysis – Portfolio Embedded Upside
Peak Analysis – Portfolio Embedded Upside Lodging industry declined significantly in 2009 • A recovery to historical operating performance would drive significant RevPAR and EBITDA margin growth in the portfolio’s 89 same-store hotels – Embedded RevPAR growth of approximately 15% to reach prior peak
Slide 20: Value Add Opportunities
Value Add Opportunities • In 2011 and 2012, the Company authorized renovation projects totaling approximately $210.0 million – Largely focused on upgrading and/or repositioning 24 hotels acquired in 2010 and 2011, including seven brand conversions – Includes a $25.0 million rooms renovation at the D
Slide 21: Superior Asset Management Program
Superior Asset Management Program RLJ has a proven asset management platform that supports investment efforts • In-house operational expertise strengthens investment underwriting process • Asset management expertise promotes effective utilization of capital – Franchise requirements – Asset preservat
Slide 22: U.S. Hotel Supply is Expected to Remain Low
U.S. Hotel Supply is Expected to Remain Low PKF projects that new hotel room supply growth will remain significantly below historical rates for the next several years Historical and Projected Room Supply Growth 5.0% 4.7% 4.0% 4.0% 3.7% 3.8% 1988 – 2011 Average Growth 3.5% 3.5% of 2.1% per Year 3.0%
Slide 23: Attractive Focused-Service Acquisition Environment
Attractive Focused-Service Acquisition Environment More targets with less competition: RLJ benefits from both a large universe of acquisition targets and a limited universe of competing public buyers System-Wide Hotels by Brand Premium Branded Focused-Service – 5,412 Hotels Upper Upscale Full-Servic
Slide 24: Disciplined Investment Strategy
Disciplined Investment Strategy Proven track record of completing attractive acquisitions • Focus on limited bid and off-market transactions • Leverage relationships with developers, owners, managers and lenders to access deals • Strong balance sheet provides a significant advantage • Continue to pu
Slide 25: Financial Overview
Financial Overview RLJ Lodging Trust
Slide 26: Strong Balance Sheet – Limited Near Term Debt Maturities
Strong Balance Sheet – Limited Near Term Debt Maturities RLJ will maintain a conservative balance sheet and will target a net debt/EBITDA ratio of 5.0x or below • Currently, evaluating unsecured term market – Increase the number of unencumbered assets – Interim step to investment grade Pro Forma Deb
Slide 27: Conservative Capital Structure and Strong Liquidity
Conservative Capital Structure and Strong Liquidity RLJ’s strong balance sheet provides financial flexibility • $300 million line of credit provides additional flexibility for future growth • Quarterly cash dividend and planned capital expenditures well supported Total Enterprise Value (1) Net Debt
Slide 28: Appendix
Appendix RLJ Lodging Trust
Slide 29: 2011 Full Year Scorecard
2011 Full Year Scorecard RLJ posted solid full year results while maintaining a conservative balance sheet and significant liquidity Key Metrics (1) Guidance Actuals Achieved Pro forma RevPAR 7.0% - 9.0% 7.7% Pro forma Hotel EBITDA Margin 33.0% - 34.0% 33.4% Pro forma Consolidated Hotel EBITDA $
Slide 30: Strong Platform with Significant Scale
Strong Platform with Significant Scale RLJ will be the 3th largest lodging REIT by hotel EBITDA and the largest REIT in the focused-service category • Scale and platform provide significant benefits – Asset management, acquisitions, ability to work with brands, cost savings TTM Hotel EBITDA as of Ju
Slide 31: Strong Forecasted Lodging Industry RevPAR Growth
Strong Forecasted Lodging Industry RevPAR Growth RLJ target segments are expected to generate strong RevPAR growth • Full Year 2011 generated 7.7% RevPAR growth U.S. RevPAR Growth (2011 – 2014 CAGR) RLJ Target Segments 10.0% 9.1% 9.0% 8.0% 7.3% 6.9% 7.0% 7.0% 6.4% 6.0% 5.0% 4.0% 4.0% 3.0% 2.0% 1.0%
Slide 32: Significant Growth Potential
Significant Growth Potential
RLJ Lodging Trust — Investor Presentation (September 2012) on 6ix