Summit Hotel Properties, Inc. · NYSE:INN
Summit Hotel Properties — Investor Presentation (November 2015)
24 slides from Summit Hotel Properties's investor presentation, Nov 16, 2015
Slide 1: Investor Presentation November 2015
Investor Presentation November 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, p
Slide 3: Summit Highlights
SUMMIT HIGHLIGHTS • Unique Focus on Premium Select - Service • Portfolio Transformation Driving Growth • Recycling Capital to Improve Portfolio Quality • Strong and Well - Covered Dividend • Conservative Capital Structure 1 • Status Update on Portfolio Sale
Slide 4: Portfolio Disposition – Recent News
PORTFOLIO DISPOSITION – RECENT NEWS 2 TRANSACTION HIGHLIGHTS Seller: Summit Hotel OP, LP (and affiliates) Buyer: American Realty Capital Hospitality Trust, Inc. Hotels: 26 Guestrooms: 2,793 Sales Price: $347.4 million Sales Price per Key: $124,400 Estimated Capital Improvements: $20.4 million Capita
Slide 5: Portfolio Disposition – Transformational Event
PORTFOLIO DISPOSITION – TRANSFORMATIONAL EVENT 3 Current Portfolio (95) EBITDA Concentration By MSA Dispositions (26) Portfolio Post Disposition (69) The pro forma portfolio (69 hotels) represents a premium across all operating metrics as compared to the selected disposition portfolio (26 hotels) No
Slide 6: Portfolio Disposition – Selected Financial Data
PORTFOLIO DISPOSITION – SELECTED FINANCIAL DATA 4 For the Trailing Twelve Months ended September 30, 2015 Financial Summary (in thousands) Current Portfolio Disposition Portfolio Pro Forma Portfolio Hotel count 95 26 69 Guestroom count 12,175 2,793 9,382 Occupancy 76.7% 76.4% 76.7% ADR $ 131.53 $ 10
Slide 7: Portfolio Disposition – Hotel Schedule
PORTFOLIO DISPOSITION – HOTEL SCHEDULE 5 LOCATION ROOMS SCHEDULED SALE DATE Hampton Inn - Medford, OR 75 SOLD DoubleTree - Baton Rouge, LA 127 SOLD Fairfield Inn & Suites - Baton Rouge, LA 78 SOLD SpringHill Suites - Baton Rouge, LA 78 SOLD TownePlace Suites - Baton Rouge, LA 90 SOLD Hampton Inn & S
Slide 8: Nearly Years of Execution
2011 (IPO) NEARLY 25 YEARS OF EXECUTION 2014 - forward 6 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 - Pr
Slide 9: Executive Lodging Experience
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 . Mr . Hansen was previously the Preside
Slide 10: Growth in Properties, Keys and Operating Metrics 2012-2014
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% $ 10,400 / key 24.0% $ 12,900 / key Hotel EBITDA
Slide 11: Portfolio Transformation: Dispositions vs. Pro Forma Portfolio
31.5% 36.1% 30% 31% 32% 33% 34% 35% 36% 37% 38% Dispositions Pro forma Portfolio Hotel EBITDA margin 91 128 70 80 90 100 110 120 130 Dispositions Pro forma Portfolio Average Guestrooms per Hotel $65.11 $100.82 $35.00 $45.00 $55.00 $65.00 $75.00 $85.00 $95.00 $105.00 Dispositions Pro forma Portfolio
Slide 12: Premium Select-Service Portfolio
PREMIUM SELECT - SERVICE PORTFOLIO 1 As of October 31, 2015. 10 Our portfolio consists of 87 premium select - service hotels with top brands, in top markets exhibiting multiple demand drivers and barriers to entry
Slide 13: Differentiated Investment Thesis
DIFFERENTIATED INVESTMENT THESIS 11 Unique Approach to Asset Management Strategic Relationships Create Robust Pipeline Diversified Market Methodology Focused on Upscale & Upper Midscale Properties Summit is one of few publicly traded lodging REITs with a nationwide focus on Upscale and Upper Midscal
Slide 14: Why Premium Select-Service? Proven Outperformance
Source: Smith Travel Research. WHY PREMIUM SELECT - SERVICE…? PROVEN OUTPERFORMANCE 12 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
Slide 15: Summit's Track Record of Outperforming
1 Smith Travel Research. Except where noted, RevPAR growth results are for the quarter ended. SUMMIT’S TRACK RECORD OF OUTPERFORMING 13 RevPAR Performance 1 : INN Same - Store vs. STR Upscale • Summit’s same - store portfolio RevPAR growth has exceeded the STR Upscale RevPAR growth benchmark for thi
Slide 16: Clear and Consistent Mission
CLEAR AND CONSISTENT MISSION 1 P ro forma hotel EBITDA for the twelve months ended September 30, 2015. 2 Includes ten IHG, two Starwood and one Carlson branded hotels owned as of September 30, 2015. 14 By MSA Tier By Franchisor We have executed on our strategy and remain focused on our mission: Maxi
Slide 17: Summitization
15 Our Asset and Revenue Management teams have more than 13 decades combined experience in the lodging industry, six decades combined with Summit “SUMMITIZATION” • Unlike many competitors, we have Corporate Revenue Managers. • Continuous monitoring of industry trends and results in comparison to our
Slide 18: Capital Recycling
CAPITAL RECYCLING 16 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 $12,300 $5,400 $0 $3,000 $6,000 $9,000 $12,000 Total Revenue Hotel EBITDA San Antonio, TX Austin, TX 1 Amount
Slide 19: Value Creation Through Strategic Renovations
$74.20 $81.13 $79.67 $95.70 $103.45 25.0% 27.0% 29.0% 31.0% 33.0% 35.0% 37.0% $65 $70 $75 $80 $85 $90 $95 $100 $105 $110 2011 2012 2013 2014 2015 RevPAR Hotel EBITDA margins VALUE CREATION THROUGH STRATEGIC RENOVATIONS 17 ¹ Operating results from prior owner are presented for 2011 and 2012; the Comp
Slide 20: Value Creation Through Brand Conversion
$10,000 $13,900 $2,600 $4,500 $104 $151 $95 $100 $105 $110 $115 $120 $125 $130 $135 $140 $145 $150 $155 $160 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Acquisition ¹ Post Conversion ² RevPAR *in millions Total Revenue Hotel EBITDA RevPAR 18 DoubleTree by Hilton San Francisco, CA 1 Includ
Slide 21: The Art of Capturing Embedded Value
(a) Source: SNL Financial, Management estimates. THE ART OF CAPTURING EMBEDDED VALUE 19 Price per Key Valuation 3 Recognized an opportunity to create shareholder value by converting 5 standard king suites into 10 guestrooms (five standard king + five standard queen) Before – 1 King Suite – Fairfield
Slide 22: Strong and Well Covered Dividend
Dividend Payout Ratio 2 1 SNL data based on closing price on October 31, 2015. 2 SNL data based on 2015 FactSet Consensus FFO estimates as of October 31, 2015. For APLE, the data represents Baird Research 2015E Core FFO of $1.59 per sha re as SNL data is unavailable. STRONG AND WELL COVERED DIVIDEND
Slide 23: Conservative Capital Structure
100% 97% 91% 88% 72% 68% 57% 53% 48% 46% 45% 41% 36% 34% 22% 19% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% - - $14 - - - - - - - $61 $8 - $123 $49 $12 $108 $19 $75 - $140 $80 - $- $25 $50 $75 $100 $125 $150 $175 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Secured Recourse Loans Secu
Slide 24: Summit Hotel Properties
SUMMIT HOTEL PROPERTIES NYSE:INN
Summit Hotel Properties — Investor Presentation (November 2015) on 6ix