UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2010
DiamondRock Hospitality Company
(Exact name of registrant as specified in its charter)
| Maryland | 001-32514 | 20-1180098 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 3 Bethesda Metro Center, Suite 1500 Bethesda, MD |
20814 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (240) 744-1150
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01. Regulation FD Disclosure
A copy of a slide presentation that DiamondRock Hospitality Company (“DiamondRock”) intends to use at an investor conference is attached to this Current Report on Form 8-K (“Current Report”) as Exhibit 99.1 and is incorporated by reference herein. Additionally, DiamondRock has posted the slide presentation in the investor relations/presentations section of its website at www.drhc.com.
The information in this Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibit, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any incorporation by reference language in any such filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.
ITEM 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
See Index to Exhibits attached hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DIAMONDROCK HOSPITALITY COMPANY
Date: August 10, 2010
By: /s/ William J.
Tennis
William J. Tennis
Executive Vice President, General
Counsel and
Corporate Secretary
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Investor Presentation August 2010 |
| Investor PresentationAugust 2010 |
| Investment Highlights 2 Early Stages of Lodging RecoveryQuality High Growth PortfolioPositioned for AcquisitionsBest in Class Capital StructureAttractive Valuation |
| DiamondRock at a Glance Market Valuation at 08/06/10:Share Price: $9.84Shares Outstanding: 155 mmMarket Capitalization: $1,521 mmNet Debt: $628 mmEnterprise Value: $2,149 mmEV / 2010 EBITDA(2): 16.0xEV / 2010 Pro Forma EBITDA(3): 15.2x 3 Per the Company's full year guidance as of June 18, 2010Per mid point of DRH's full year EBITDA guidance of $132 to $136 millionEBITDA of $141 million, which is the mid-point of 2010 guidance pro forma for the pre-ownership period of 2010 acquisitionsMetrics based on full year operating results , pro forma for the pre-ownership period of 2010 acquisitionsCalculated according to the methodology outlined in our corporate credit facility Full Year 2010 Guidance(1):Hotels: 22Rooms: 10,573RevPAR Growth: 2% - 4%RevPAR: $106.39 - $108.47Adjusted EBITDA: $132 - $136 millionAdjusted FFO: $83 - $85 millionAdjusted FFO/share: $0.57 - $0.59 Leverage Statistics(4):Net Debt / Asset Value: 33.4% Average Interest Rate: 5.9%Net Debt / EBITDA: 4.4x Average Maturity: 5.1 yearsFixed Charge Coverage(5): 2.3x Next Maturity: Fourth Quarter 2014 |
| Early Stages of Recovery in Lodging Fundamentals DRH's operating results exceed internal expectations for first half 2010DRH anticipates a robust, multi-year recovery in lodging fundamentals:Business mix shifting to more profitable demand segmentsConstrained supply picture very favorableGreen Street Advisors Recovery Scenario:NOI recovery to 2007 levels by 2014NOI CAGR for DRH pro forma portfolio of 15% from 2009 - 2014 4 (CHART) Note: Historical data and projections for Upper-Upscale and Luxury HotelsYear 2000 = 100Source: Green Street Advisors |
| Portfolio Overview 5 Our portfolio is concentrated in Top 25 MSAs and destination resorts. Portfolio positioned for superior growth. Market Concentration (% of EBITDA) Brand Concentration (% of EBITDA) Note: Market and Brand Concentrations based on forecast 2010 hotel adjusted EBITDA, including the Hilton Minneapolis and the Renaissance Charleston . The charts do no reflect the Allerton Hotel senior debt acquisition. (CHART) (CHART) |
| Acquisition Pipeline 6 Increased volume and quality of investment opportunitiesCurrently evaluating several transactions in Top 20 MSAsSignificant investment capacityExpected year-end cash balance of $160 millionUndrawn $200 million line of credit12 hotels unencumbered by debtOff-Market TransactionsMarriott "first look" relationship - Facilitated Charleston Renaissance acquisitionIndustry relationships - Facilitated Allerton Senior Loan acquisitionInvestment OpportunitiesRepositioning or RebrandingLarge Group HotelsDestination ResortsUrban Limited Service in select MSAs |
| 2010 Acquisitions 77 Allerton Hotel ChicagoDistressed, off-market transactionAcquired senior loan at 13% discountLast dollar of investment at $137k/keyGlobal brand repositioning opportunity if fee title obtainedHilton Minneapolis821 rooms; 77,000 sq. ft. meeting spaceLeading group hotel in Minnesota$155.5 million total investmentEvaluating ROI opportunities to create additional meeting spaceLess than 11x forward EBITDARenaissance CharlestonOff-market acquisition sourced through Marriott relationshipDesirable Historic District location$40 million total investmentMajor new demand generators (e.g. Boeing 787 Dreamliner assembly plant)Less than 11 forward EBITDA 7 |
| Capital Structure Best in ClassNo debt maturities until the fourth quarter of 2014$160 million cash balance at year endUndrawn $200 million credit facility12 unencumbered hotelsClosed new $200 million unsecured credit facility Inexpensive debt starting at 3.75%Flexible financial covenants4-year term, including extensions 8 Leverage Statistics(2):Net Debt / Asset Value: 33.4% Net Debt / EBITDA: 4.4xFixed Charge Coverage(3): 2.3x Average Interest Rate: 5.9% Average Maturity: 5.1 years EBITDA of $141 million, which is the mid-point of 2010 guidance pro forma for the pre-ownership period of 2010 acquisitionsMetrics based on full year operating results , pro forma for the pre-ownership period of 2010 acquisitionsCalculated according to the methodology outlined in our corporate credit facility |
| DiamondRock Capital Structure - No Corporate Debt 9 Courtyard Midtown East (Oct. 2014)EBITDA: $7.2mm; Debt: $42.8mm at 8.81% Salt Lake City Marriott (Jan. 2015)EBITDA: $4.7mm; Debt: $32.4mm at 5.50% Los Angeles Airport Marriott (July 2015)EBITDA: $7.1mm; Debt: $82.6mm at 5.30% Worthington Renaissance (July 2015)EBITDA: $8.6mm; Debt: $56.7mm at 5.40% Frenchman's Reef Marriott (Aug. 2015)EBITDA: $10.4mm, Debt: $61.0mm at 5.44% Orlando Airport Marriott (Jan. 2016)EBITDA: $4.1mm; Debt: $59.0mm at 5.68% Chicago Marriott Downtown (April 2016)EBITDA: $17.7mm; Debt: $218.3mm at 5.975% Courtyard Fifth Avenue (June 2016)EBITDA: $4.1mm; Debt: $51.0mm at 6.48% Austin Renaissance (Dec. 2016)EBITDA: $8.1mm; Debt: $83.0mm at 5.507% Atlanta Waverly Renaissance (Dec. 2016)EBITDA: $6.3mm; Debt: $97.0mm at 5.503% Atlanta Alpharetta MarriottEBITDA: $3.3mm Atlanta North WestinEBITDA: $2.1mm Bethesda Marriott SuitesEBITDA: $3.2mm Boston Westin WaterfrontEBITDA: $17.5mm Conrad ChicagoEBITDA: $5.1mm Griffin Gate MarriottEBITDA: $5.7mm Hilton MinneapolisEBITDA: $14.6mm Oak Brook Hills MarriottEBITDA: $2.5mm Renaissance CharlestonEBITDA: $3.0 mm Sonoma RenaissanceEBITDA: $2.1mm Torrance MarriottEBITDA: $4.3mm Vail MarriottEBITDA: $5.1mm Trailing 4 Quarter Hotel Adjusted EBITDA of $69m 10 Hotels 12 Hotels $784mm fixed rate non- recourse property specific mortgage debt(1)Trailing 4 Quarter Hotel Adjusted EBITDA of $78m Note: Debt balances and EBITDA figures are trailing four quarters as of June 18, 2010, pro forma to include the Hilton Minneapolis and Renaissance Charleston.(1) Frenchman's Reef's loan is non-recourse to the Company with the exception of a $2.5 million corporate guaranty of the completion of certain capital projects. |
| Attractive Valuation 10 Source: Bloomberg, SNL Financial as of August 6, 2010 DRH trades at EBITDA multiple discount to its closest peers, despite equivalent or better growth prospects, asset quality and leverageImplied valuation of $203k per key, approximately 35% discount to replacement cost |
| 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 should carefully review. The forward- looking statements made are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to us. Actual results could differ materially from the forward-looking statements made during this presentation. When we use the words "believe," "expect," "anticipate," "plan," "will," "intend" or other similar expressions, we are identifying forward-looking statements. The forward-looking statements made during this presentation are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995. 11 |