Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Investor Presentation (June 2015)
32 slides from Braemar Hotels & Resorts's investor presentation, Jun 1, 2015
Slide 1: Company Presentation - June 2015
1 Company Presentation - June 2015
Slide 2: Safe Harbor
2 Safe Harbor In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely
Slide 3: Compelling Opportunity
Compelling Opportunity ike ead
Slide 4: Well-Defined Strategy
4 Well-Defined Strategy Invest in high quality, high RevPAR hotels (RevPAR > 2x the national average) located in gateway & resort markets Conservative leverage with target (Net Debt + Preferred Equity) / EBITDA of 5.0x or less
Slide 5: Compelling Opportunity
5 Compelling Opportunity High quality portfolio predominantly located in gateway & resort markets Low leverage strategy in line with peers Highly-aligned management team Portfolio is in great physical condition after recent renovations Recently announced 100% increase in common dividend
Slide 6: Strong Track Record & Performance
Strong Track Record & Performance 6
Slide 7: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 7 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns • Ashford Prime expects to benefit from strong AINC management team capabilities Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SH
Slide 8: Highly-Aligned Management
Highly-Aligned Management 8 • With insider ownership* of approximately 14% for AHP, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 9: Well-Positioned Portfolio
Well-Positioned Portfolio 9 *Represents Key West MSA FY 2014 Hotel EBITDA 57% 25% 10% 8% Ashford Prime Brands by EBITDA Marriott Hilton Sofitel Independent 57% 8% 25% 10% Ashford Prime Managers by EBITDA Marriott Remington Hilton Accor 92% 8%* Ashford Prime MSA by EBITDA Top 25 Other 29% 52% 19% Ash
Slide 10: Strong Asset Performance
10 2013 2014 Var Q1 2014 Q1 2015 Var RevPAR $158.26 $171.35 8.3% $147.49 $163.35 10.8% Hotel Revenue $294,250 $314,583 6.9% $70,275 $77,749 10.6% Hotel EBITDA $96,321 $104,798 8.8% $20,217 $23,523 16.4% EBITDA Flow 41.7% 44.2% The above table assumes the 10 properties owned and included in continuin
Slide 11: Recently Renovated Portfolio
Recently Renovated Portfolio 11 Property Renovation Completion Date Cost/Budget Hilton Torrey Pines Public Space Guestrooms Meeting Rooms 2010-2015 $17,200,000 Capital Hilton Guestrooms Public Space Mechanical Systems 2011-2012 $29,900,000 Pier House Resort Guestrooms Public Space Mechanical Systems
Slide 12: Conservative Capital Structure
Conservative Capital Structure 12 Balance Sheet Initiatives Debt Maturities Net Working Capital (1) (2) Enterprise Value - - 394.0 8.1 - 80.0 - 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 2015 2016 2017 2018 2019 De b t ( $ i n m il li o n s) Fixed-Rate Floating-Rate » Target (Net Debt + Pr
Slide 13: Ashford Prime Recent Developments
13 Ashford Prime Recent Developments Q1 2015 marks three consecutive quarters of double-digit RevPAR growth Through 5/1/15, Company has repurchased 1.9 million shares of common stock and units under its share repurchase program During Q4, Company refinanced its loan on the Capital Hilton and H
Slide 14: Chicago Sofitel Transaction
14 Property Information: • Location: Downtown Chicago (Gold Coast submarket) • Rooms: 415 (including 32 suites) • Year Built: 2002 • 10,000 sf of meeting space • Fee simple; 32 story tower • Segmentation: 70% transient; 30% group Acquisition Overview: • Purchase Price: $153 million • Purchase Price/
Slide 15: Pier House Resort Transaction
15 Pier House Resort Transaction Property Information: • Location: Key West, FL • Rooms: 142 (including 21 suites) • Year Built: 1968 • 2,600 sf of meeting space • Fee simple • Segmentation: 93% transient; 7% group Acquisition Overview: • Purchase Price: $92.7 million • Purchase Price/Key: $653,000
Slide 16: Growth & Acquisition Strategy
Growth & Acquisition Strategy 16
Slide 17: Growth & Acquisition Strategy
17 Highly quantitative approach focused on long-term accretion Proven track record of value-creating acquisitions Disciplined capital allocation Multiple ways to grow platform: Unique built-in pipeline via right-of-first-offer hotels from Ashford Trust Targeted acquisitions consistent wi
Slide 18: Projected Hotel Room Value Growth
Projected Hotel Room Value Growth 18 Source: JLL/HVS * 2014 US Hotel Transaction Volume is an actual number • U.S. hotel transaction volume is likely to increase over the next several years as private U.S. hotel market values rise $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,00
Slide 19: Right Of First Offer Hotels
19 Right Of First Offer Hotels Hotel Market Rooms Ritz-Carlton Atlanta, GA 444 Rooms Hilton Back Bay Boston, MA 390 Rooms Courtyard Downtown Boston, MA 315 Rooms Embassy Suites Portland, OR 276 Rooms Embassy Suites Crystal City Washington, D.C. 267 Rooms Crowne Plaza Beverly Hills* Los Angeles, CA 2
Slide 20: Accretive Growth
Accretive Growth 20 - Ashford Prime management is focused on accretive growth - Our definition of accretion: the 5-year Total Shareholder Return (TSR) post-transaction must be greater than the 5-year TSR pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (L
Slide 21: Appendix
APPENDIX 4“ ASHFORD
Slide 22: Industry Overview
Industry Overview 4“ ASHFOR
Slide 23: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 23 Attractive Supply/Demand Imbalance Source: PKF -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F Supply Growth Demand Growth Yea r- o v e r- Year % Gro w th PKF Forecast
Slide 24: PKF RevPAR Growth Forecasts
24 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.3% 7.3% 6.5% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth PKF RevPAR Growth Forecasts
Slide 25: Potential Industry EBITDA Growth Rates
25 Potential Industry EBITDA Growth Rates *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resulting from PKF EBITDA change regression equation. • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estima
Slide 26: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 26 Historical Industry Stock Returns Index includes AHT, BEE, DRH, FCH, HST, HT, LHO, and SHO. Companies are included in the data from the time of their IPO Current data as of April 30, 2015 % 50% 100% 150%
Slide 27: Executive Bios
27 Executive Bios
Slide 28: Executive Bios
28 Executive Bios Monty J. Bennett Chief Executive Officer & Chairman of the Board Douglas A. Kessler President Mr. Kessler is the President of Ashford (NYSE.MKT:AINC) and serves as the President of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He is currently
Slide 29: Executive Bios
29 Executive Bios David A. Brooks Chief Operating Officer, General Counsel & Secretary Mr. Brooks is the Chief Operating Officer, General Counsel & Secretary of Ashford (NYSE.MKT:AINC) and serves as Chief Operating Officer, General Counsel & Secretary of both Ashford Hospitality Trust (NYSE: AHT) an
Slide 30: Executive Bios
30 Executive Bios J. Robison Hays Chief Strategy Officer Mr. Hays is the Chief Strategy Officer of Ashford (NYSE.MKT:AINC) and serves as the Chief Strategy Officer of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). Mr. Hays is responsible for the formation and e
Slide 31: Executive Bios
31 Executive Bios Mark L. Nunneley Chief Accounting Officer Mr. Nunneley is the Chief Accounting Officer of Ashford (NYSE.MKT:AINC) and serves as the Chief Accounting Officer of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He has served as the Chief Accountin
Slide 32: 32 Company Presentation - June 2015
32 Company Presentation - June 2015
Ashford Hospitality Prime — Investor Presentation (June 2015) on 6ix