Service Properties Trust - Shares Of Beneficial Interest · NASDAQ:SVC
Service Properties Trust - Shares Of Beneficial Interest — Service Properties Trust — Investor Presentation (August 2020)
30 slides from Service Properties Trust - Shares Of Beneficial Interest's investor presentation, Aug 25, 2020
Slide 1: Service Properties Trust Investor Presentation August 2020
Service Properties Trust (Nasdaq: SVC) Investor Presentation August 2020
Slide 2: Forward-looking statements
This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” an
Slide 3: Investment highlights: national scale, diversification, balance sheet
National Scale •$12.3 billion invested in a diversified portfolio. •1,138 properties. •51,404 hotel keys / 13.7 million square feet of net lease service retail properties. Diversification •SVC invests in two asset categories, hotels and retail service-focused net lease properties, to provide diversi
Slide 4: Summary of COVID-19 Impact
Summary of COVID-19 Impact •Of the 19 of SVC’s 329 hotels which suspended operations, nine have reopened as of August 6, 2020. •Extended stay portfolio is performing better than limited and full service hotels. •TravelCenters of America, an essential service business to the U.S. supply chain, repres
Slide 5: Total Portfolio by Property Type
Assets Total Portfolio by Property Type (1) Properties3298091,138 14msf States404247 Investments$7.1bn$5.2bn$12.3bn Annual Minimum Return / Rent$591mn$369mn$960mn Tenants by Industry (1) Annual Minimum Returns and Rents Coverage Ratio 1.Based on annualized minimum base returns and rents. SERVICE PRO
Slide 6: Geographic diversity of assets
SVC’s assets are located in 47 states, Washington DC, Puerto Rico and Canada. •SVC has invested $12.3 billion in its real estate portfolio. •SVC’s investments are located in various markets near demand generators. •We believe geographic diversity mitigates market risk. Annual Minimum Returns and Ren
Slide 7: Hotel Portfolio
Hotel Portfolio SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 2020
Slide 8: Portfolio Updates – Hotels
Portfolio Updates – Hotels •Occupancy for SVC's hotels for July 2020 was 40.3%. •SVC has entered into agreements to sell eight Marriott-branded hotels and one Wyndham-branded hotel with 1,178 rooms for approximately $48.8 million in aggregate; sales are expected to be completed in Q4 2020. •SVC has
Slide 9: Monthly Hotel Metrics
Monthly Hotel Metrics Total Hotel Revenues by Month $32.3M$37.8M $51.6M $65.3M April '20May '20June '20July '20 Total Hotel Cash Flows by Month $.7M -$26.9M -$13.8M-$7.1M April '20May '20June '20July '20 SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 20209
Slide 10: Sonesta properties, brands and countries
80 properties worldwide 5brands 7countries 43 1522 US Full ServiceInternationalUS Extended Stay SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 202011
Slide 11: Ownership Stake in Sonesta
National Scale Sonesta International Hotels Corporation (“Sonesta”) is an owner, operator and franchisor of hotels under the Royal Sonesta, Sonesta and Sonesta ES Suites brands. Sonesta currently manages 15 full service hotels and 43 extended stay hotels in the United States and franchises or operat
Slide 12: Sonesta RevPAR Index performance
•Recent market share gains suggest that the value of big brand systems declines noticeably without substantial business from national account travel, demonstrating the value of Sonesta’s local sales. 145.0 135.0 125.0 115.0 105.0 Sonesta ES - Historical Indexes RevPAR +35% 98.8 120.4 35% 30% 25% 20%
Slide 13: Case Study: Sonesta Hilton Head
Case Study: Sonesta Hilton Head. Sonesta-Led Renovation Drove Much Stronger Operating Results • Sonesta Hilton Head underwent a $26 million renovation in late 2012/early 2013 following its rebranding to a Sonesta from an IHG Crowne Plaza hotel. - Included all 340 guestrooms, public spaces, and the a
Slide 14: Case Study: Sonesta Philadelphia
Case Study: Sonesta Philadelphia. Complete Property Renovation and Transformation • Sonesta Philadelphia underwent a $23 million renovation in early 2013 following its rebranding to a Sonesta from an IHG Crowne Plaza hotel. - Included all 439 guestrooms, public spaces, and the addition of 22 suites.
Slide 15: Case Study: Sonesta ES Suites Orlando
Case Study: Sonesta ES Suites Orlando. Reimaging of Residence-Style Hotel Near Orlando Area Attractions • Sonesta ES Suites Orlando underwent an $11 million renovation in 2014 following its rebranding to Sonesta ES Suites from an IHG Staybridge Suites hotel. - 146 guest suites restyled offer all the
Slide 16: Net Lease Portfolio
Net Lease Portfolio SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 2020
Slide 17: Net Lease Portfolio Statistics
Net Lease Portfolio Statistics 809$369mm PropertiesAnnual Contractual Rent 13.7mm11.1 Years Rentable Square FeetWeighted Average Lease Term 99%2.16x OccupancyW.A. FCCR Diverse Geographical Footprint (1) (2) 22 Industries | 129 Brands <1% % of Annual Minimum Rent >8.5% (1) By annual minimum rent. (2)
Slide 18: Lease Structures
Lease Structures 93% of Leases Have Contractual Increases or Percentage Rent $380mm Well-Laddered Lease Expirations (1) 1.By annual minimum rent. SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 202019
Slide 19: Tenants by Brand
Brand TravelCe Petro Sto AMC The The Great Life Time Buehler's Heartland Pizza Hut Regal Cin Express O Other Tenants by Brand (1) SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 202020
Slide 20: Portfolio Updates - Net Lease: TravelCenters of America
Portfolio Updates - Net Lease TravelCenters of America (TA) ◦Represents approximately 26% of SVC's minimum rents and returns. ◦Rent comprised of annual cash payments of $264 million. ◦TA's travel centers have been designated as an “essential service” by many public authorities, allowing it to remain
Slide 21: Portfolio Updates - Net Lease (continued)
Portfolio Updates-Net Lease (continued) Retail Net Lease Portfolio ◦Represents 12.8% of SVC’s minimum rents and returns. ◦Rent collections from SVC’s retail net lease tenants improved to 80.0% in July 2020 from 45.6% in April 2020. ◦As of August 6, 2020, SVC has deferred an aggregate of $11.3 millio
Slide 22: Financial Information
Financial Information SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 2020
Slide 23: Book Capitalization and Strong Balance Sheet
Book Capitalization Floating Rate Debt 5% Unsecured Fixed Rate Debt 68% Shareholder’s Equity 27% Strong Balance Sheet • Unsecured senior notes: $5.8 billion. • Term loan: $400 million, July 2023 maturity. • Revolving credit facility: ◦ $1 billion ($33 million outstanding). ◦ July 2022 maturity plus
Slide 24: Debt covenants
MetricCovenant As and For the Twelve Months Ended June 30, 2020 Total Debt / Adjusted Total AssetsAllowable Maximum: 60.0%50.1% Required Minimum: 1.50x2.85x Debt Service Total Unencumbered Assets / Unsecured DebtRequired Minimum: 150%199.5% SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 202025
Slide 25: EBITDA and EBITDAre reconciliation
(in thousands) For the Three Months EndedFor the Six Months Ended 6/30/20203/31/202012/31/20199/30/20196/30/20196/30/20206/30/2019 Add (Less): Interest expense 72,072 71,075 73,384 52,375 49,601 143,147 99,367 Income tax expense (benefit) (1) 16,660 342 1,527 467 (260) 17,002 799 Depreciation and am
Slide 26: FFO and Normalized FFO reconciliation
(amounts in thousands, except share data) For the Three Months EndedFor the Six Months Ended 06/30/202003/31/202012/31/20199/30/20196/30/201906/30/202006/30/2019 Net income (loss)$ (37,349)$ (33,650)$ (14,893)$40,074$8,782$ (70,999)$234,569 Add (Less):Depreciation and amortization127,427127,926126,7
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures: SVC presents certain “non-GAAP financial measures” within the meaning of applicable Securities and Exchange Commission, or SEC, rules, including EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Normalized FFO. These measures do not represent cash generated by operating activ
Slide 28: Management Platform
Management Platform SERVICE PROPERTIES TRUST (Nasdaq: SVC) | August 2020
Slide 29: SVC is managed by The RMR Group
SVC IS MANAGED BY THE RMR GROUP, AN ALTERNATIVE ASSET MANAGER ~$32 Billion in AUM Financial Services: Real Estate Services: Business Services: $12 Billion in Annual Revenues AccountingAcquisitions/ Management Capital MarketsAsset Human Resources CRE Professionals Over 2,100 Compliance/ Audit Constru
Slide 30: Alignment of Interests
Alignment of Interests If SVC’s stock price goes up and its total market cap exceeds its historical cost of real estate, RMR base management fee is capped at 50 bps of historical cost of real estate. If total market cap is less than historical cost of real estate, base fee fluctuates with share pric
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