COREPOINT LODGING INVESTOR PRESENTATION - MAY 2019
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CorePoint Lodging Investor Presentation May 2019
Safe Harbor Disclosure
Forward-Looking Statements
This presentation has been prepared by CorePoint Lodging Inc. (the “Company” or “CorePoint”) solely for informational purposes. Certain statements in this presentation
constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to various risks and uncertainties. Such
forward-looking statements, include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, cash flow and
plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to
identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in our industry, interest rates, real
estate values, the debt financing markets or the general economy; our business and investment strategy; our projected operating results; actions and initiatives of the U.S.
government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; the state of the U.S. economy generally or in specific
geographic regions; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements; changes in the value of our hotel portfolio; the degree
to which our hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting
guidance and similar matters; our ability to satisfy the REIT qualification requirements for U.S. federal income tax purposes; availability of qualified personnel; the estimates
relating to our ability to make distributions to our stockholders in the future; general volatility of the capital markets and the market price of our common stock; and degree and
nature of our competition. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all
information currently available to us. Additional factors that might cause future results to differ materially from current expectations, include, but are not limited to, the ability
of CorePoint to effectively acquire and dispose of properties; the ability of CorePoint to successfully implement its operating strategy; changes in general political, economic and
competitive conditions and specific market conditions; adverse changes in the real estate and real estate capital markets; financing risks; changes in laws or regulations or
interpretations of current laws and regulations that impact CorePoint’s business, assets or classification as a REIT; additional risks and uncertainties include, among others, those
risks and uncertainties described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on
March 22, 2019, as such factors may be updated from time to time in the Company’s periodic filings with the SEC. Although CorePoint believes that the assumptions underlying
the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements
included in this presentation will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by CorePoint or any other person that the results or conditions described in such statements or the objectives and plans
of CorePoint will be achieved. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many
possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from
those expressed in our forward-looking statements. Any forward-looking statements in this presentation speak only as of May 31, 2019. New risks and uncertainties arise over
time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
This presentation includes EBITDA, Adjusted EBITDAre, Pro Forma Adjusted EBITDAre, Adjusted EBITDAre margin, Hotel Adjusted EBITDAre, Hotel Adjusted EBITDAre margin, and
Net Operating Income (“NOI”) which are “non-GAAP financial measures,” within the meaning of SEC rules and regulations that are different from measures calculated and
presented in accordance with GAAP (generally accepted accounting principles). These non-GAAP financial measures should be considered along with, but not as an alternative
to, net income or loss, cash flows from operations or any other measures of the company’s operating performance prescribed by GAAP. See Appendix for reconciliation of these
non-GAAP financial measures to the most directly comparable GAAP measures for historical periods. A reconciliation of anticipated full-year 2019 Adjusted EBITDAre to the
closest GAAP financial measures are not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and uncertainty with respect to
forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss) and adjustments that could be made for impairment charges,
gains or losses on sales of assets, and the timing and magnitude of other amounts in the reconciliation of historic numbers. For the same reasons, the Company is unable to
address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on its future GAAP financial
results.
2
Company Overview
Investment Highlights
Uniquely Positioned Only publicly traded US lodging REIT focused on upper
midscale and midscale segment
Attractive Model Select service hotels generally have higher margins and
greater downside protection vs. full service hotels
Strong Fundamentals Upper midscale and midscale segment benefiting from
strong supply / demand fundamentals
Diversified Portfolio 310 hotels located across 41 states with no single asset
contributing more than 3% of EBITDAre 1
Opportunity for Value Creation Recent repositioning of 54 assets driving growth and
non-core asset sales to create value
Experienced Team Management team with track record of operational
performance and disciplined capital allocation
Strong Governance Best-in-class corporate governance and alignment of
stockholder interest
(1) Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre
4
Company Snapshot
CorePoint began trading on the NYSE on May 31, 2018 following La
Quinta’s sale of its management and franchise business to Wyndham
and the spin-off of its owned assets via CorePoint, a publicly traded REIT
NYSE Ticker Market Cap1 Adjusted EBITDAre2
CPLG $705M $186M
Hotels Rooms Select-Service Q1 2019 TTM
300 Comparable Hotels
310 39,720 100% ADR
< $70
7% $150+ $90
9%
States / MSAs 74
RevPAR
7
$70-$95
41 / 145 37%
141
$115-$150
$59
Hotel EBITDAre3 22
By ADR
16% Occupancy
# of
66%
Hotels 66
(1) Based on CorePoint’s closing share price on 5/31/19 $95-$115
(2) Represents Q1 2019 TTM Pro Forma Adjusted EBITDAre 31%
(3) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre
Midscale Upper Midscale Upscale Upper Upscale Economy
5
Why Select-Service and Upper Midscale / Midscale?
Uniquely Positioned
CorePoint Lodging is the only publicly traded REIT focused on the Upper Midscale / Midscale
segment, the largest segment in the U.S. lodging sector
Full-Service Select-Service
Upper
Luxury Upscale Upper Midscale / Midscale Economy
Upscale
Brand
Focus
Market ADR
> $215 $150-$215 $115-$150 $70-$115 < $70
(Rooms)
39%
% of
3% 16% 21% 21%
CPLG Q1 2019
Adj. EBITDAre
TTM PF Hotel
CPLG >$150
by ADR
ADR hotels are 37%
select-service 31%
16%
9% 7%
$150+ $115-$150 $95-$115 $70-$95 < $70
Source: STR data with respect to hotels in the U.S. 7
Attractive Model
Guests are attracted to Select Service hotels given their attractive value proposition
Superior Value Proposition…
Full-Service Select-Service
• Full-Service Restaurant Food Offerings
• Parking For a Fee Free Parking
• Breakfast For a Fee Free Breakfast
• Wi-Fi For a Fee
Free Wi-Fi
• > $150 ADR (1)
< $150 ADR (2)
(1) Based on STR estimates for upper upscale and luxury hotels
(2) Based on STR estimates for economy, midscale, upper midscale and upscale hotels
8
Why Midscale
Attractive Hotels?
Model (Cont’d)
Owners are attracted to Select Service hotels given their strong margins and greater downside protection
Simple Business Model1…
(Room Revenue as % of Total)
~85% to 100%
~65% …And Better Protection During Economic
Downturns2
(Avg. RevPAR Growth during Tech Bubble and GFC)
Full-Service Select-Service
…And Superior EBITDA Margins1… Full-Service Select-Service
~30-40%
-12%
~20%-30% -20%
Full-Service Select / Limited-Service
Select-Service
(1) Based on data from Green Street Advisors
(2) STR data with respect to hotels in the U.S.
9
Strong Fundamentals
The Upper Midscale / Midscale segments have experienced strong net demand growth over the past
five years with the least amount of ownership across public lodging REITs
Full-Service Select-Service
Upper Upper
Luxury Upscale Midscale Economy
Upscale Midscale
Superior Demand / Supply Fundamentals
(5-Yr Average of differential between demand growth and supply growth based on STR data)
1.5%
1.3% 1.3%
0.6%
0.5%
0.4%
Luxury Upper Upscale Upscale Upper Midscale Midscale Economy
REIT Focus
Source: STR data with respect to hotels in the U.S. 10Why
StrongMidscale Hotels?
Fundamentals (Cont’d)
Projected supply growth for upper midscale / midscale expected to be lower compared to higher
chain scale segments over the next five years
Full-Service Select-Service
Upper Upper
Luxury Upscale Midscale Economy
Upscale Midscale
Supply Fundamentals
(Forecasted 5-Yr Average of supply growth based on CBRE data)
4.0%
2.7%
2.3% 2.2%
0.9%
-0.3%
Source: CBRE Hotel Horizons, March - May 2019 Edition - National Forecast
11Portfolio Overview
Why Midscale
Portfolio Hotels?
Overview
CorePoint owns 310 La Quinta-branded hotels in diversified markets across the U.S.
Chicago, Illinois San Francisco, California Austin, Texas
13Core
Why Midscale
Portfolio
Portfolio Segmentation
Hotels?
Diversification
CorePoint’s portfolio is diversified across 41 states while no single hotel contributes more than 3% to Pro
Forma Hotel Adjusted EBITDAre1
Geography Location Type
(Hotel EBITDAre1 by State) (Hotel EBITDAre1 by Location Type)
Resort
4%
Small Metro/Town
4%
Interstate
7%
Urban
13%
Suburban
12% 56%
Airport
16%
22%
16%
Greater than 10% of Total Hotel EBITDAre1
Between 2% and 10% of Total Hotel EBITDAre1
Less than 2% of Total Hotel EBITDAre1
(1) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre
14Core
Why Midscale
Portfolio
Portfolio Segmentation
Hotels?
Segmentation
Core
> 30% Margin6 < 30% Margin7 Non-Core8 Total Portfolio8
# Hotels 63 174 73 310
# Keys 8,274 22,578 8,868 39,720
Average Age1 20 y.o. 25 y.o. 33 y.o. 26 y.o.
$ Total Revenue2 $243M $493M $131M $867M
$ ADR $108 $90 $70 $90
$ EBITDAre3 $86M $110M $10M $206M
% EBITDAre Margin4 35% 22% 8% 24%
$ NOI5 $76M $90M $5M $171M
(1) Average age for repositioned properties based on completion date of renovation
(2) Represents Q1 2019 TTM Pro Forma Total Revenue
(3) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre
(4) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre margin
(5) Pro Forma Hotel Adjusted EBITDAre less capex reserve (4% of revenue)
(6) 30% or greater Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre margin hotels
15
(7) Less than 30% Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre margin hotels
(8) Excludes five non-core assets sold YTDGrowth Strategies
2018
Core
Why Midscale
Portfolio
to 2019B
Multi-Faceted Segmentation
Hotels?
EBITDAtoBridge
Approach Value Creation
Portfolio Asset Management
Transformation Initiatives Consolidation
Transform portfolio to focus on high Continuously improve property Consolidate a diversified portfolio
growth, highly profitable assets level operating performance of select service hotels through
through aggressive, proactive disciplined capital allocation
asset management strategies while continuing to
strengthen our balance sheet
Potential Wyndham flexibility
Benefits
Revenue and cost synergies
resulting from Wyndham’s
distribution and scale
172018
Core
Why Midscale
Portfolio
to Transformation
Portfolio 2019BSegmentation
Hotels?
EBITDAProvides
Bridge Growth
Eliminating Non-Core assets would improve Portfolio RevPAR and EBITDAre margins1
Portfolio Average Portfolio Average
Q1 2019 TTM RevPAR Q1 2019 TTM EBITDAre
$65 Margin1
27%
$40
8%
Non-Core Core Portfolio Non-Core Core Portfolio
(73 Hotels) (237 Hotels) (73 Hotels) (237 Hotels)
Higher quality Higher margin
18
(1) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre MarginCore
Why Midscale
Portfolio
Portfolio Segmentation
Hotels?Update
Transformation
Since March 2019, CorePoint has created significant shareholder value through the sale of
five non-core assets at an average Hotel Adjusted EBITDAre multiple of ~16x
Remaining Non-Core Assets
2019 Non-Core Asset Sales - Value Creation Opportunity
$21M # Hotels
Total 73
Gross
~16x Sales $ Total Revenue1
Proceeds
Avg.
2.2x EBITDAre $131M
Multiple
5 Avg. $ EBITDAre2
Revenue
Total Assets Multiple
Sold $10M
% EBITDAre Margin3
(1) Represents Q1 2019 TTM Pro Forma Total Revenue
(2) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre 8%
(3) Represents Q1 2019 TTM Pro Forma Hotel Adjusted EBITDAre margin
19Portfolio Transformation via Hotel Repositionings
San Antonio, TX HOTEL REPOSITIONINGS
• 53 of 54 hotels have completed the
construction phase of their renovations
• More than $230 million invested, or
over $30,000 per key
Before After • Designed to reposition these hotels
upward within their local markets
Clifton, NJ
• Scope of renovations included:
• Enhancing guestrooms
• Expanding public areas, including
lobbies and workout facilities
• Upgrading exterior elements (LED
lighting / monolith tiles)
Before After
202018
Core
Why Midscale
Portfolio
to 2019B
Potential Segmentation
Hotels?
EBITDA
Wyndham Bridge
Benefits in 2H19 and Beyond
• La Quinta’s integration into Wyndham’s larger platform completed in April 2019
• CorePoint’s portfolio of 310 La Quinta branded hotels has yet to fully benefit from the potential revenue
contributions resulting from Wyndham’s breadth and scale
Potential Benefits of Wyndham Platform
• Cross-selling through direct channels enhances revenue and gross margins
• Greater distribution, procurement channels, and access to insurance and benefits provides value and enhances profit
margins
• CorePoint’s portfolio has access to over 60 million Wyndham loyalty members, up from 15 million prior to merging with
Wyndham1
21
(1) Including legacy La Quinta Returns program members2018
Core
Why
Value Midscale
Portfolio
to 2019BThrough
Creation Segmentation
Hotels?
EBITDAConsolidation
Bridge
A large and fragmented market in the midscale and upper midscale segments presents CorePoint with
a unique opportunity to continue scaling its portfolio over time
Number of US Hotels by Chainscale1 REIT Portfolio Size by # of Properties
Midscale & Upper Midscale/Select-Service Focus
15,842 Upscale/Select-Service Focus
310 Upper Upscale/Full-Service Focus
Combined Focus
10,325 234
7,008 151
87
69
61
51
40
31
21
393
Midscale/Upper Economy Upscale/Upper Luxury
Midscale Upscale
22
(1) Source: STR as of August 2018 with respect to hotels in the U.S.Financial Highlights
2018
Core
Why
RecentMidscale
Portfolio
toHighlights
2019BSegmentation
Hotels?
EBITDA Bridge
1Q19 Results
• Comparable RevPAR growth of 3.0%
• Adjusted EBITDAre of $43 million
Capital Allocation
Arlington, TX • Sold five non-core hotels for a combined gross sales
price of approximately $21 million(1)
• Repaid approximately $19 million of CMBS debt
outstanding(1)
• Repurchased 1.8 million shares of common stock at
an average price of $11.58 per share for an aggregate
purchase price of approximately $21 million(1)
Chicago, IL
24
(1) Information through 5/14/19 (1Q19 Earnings Press Release date)2018
Core
Why
CapitalMidscale
Portfolio
toStructure
2019BSegmentation
Hotels?
EBITDA Bridge
Capital Structure (in $ Millions) Debt Strategy
Cash (1) Preferred Stock • Lower net debt-to-Adjusted EBITDAre to 4.0x-5.0x through strategic
$61 $15 dispositions and organic cash flow growth
3% 1%
• Diversify capital structure over time
Debt Highlights
• Weighted average debt maturity of 6 years (4)
Common
Equity (2) Total • $150 million undrawn Revolving Credit Facility
$705 Capitalization CMBS • CMBS Debt
39% Debt (3)
$1,031 • 2-year initial term + five 1-year borrower extension options
57%
• Interest Rate: LIBOR + 275 bps
• 20% pre-payable today, 100% pre-payable November 2019
Dividend / Share Repurchase Program
• Annualized dividend of $0.80 per common share
• 6.6% dividend yield (5)
Net Debt + Preferred Stock / Adjusted EBITDAre (7) • Board authorized $50 million share repurchase program on
3/21/2019
5.3x 4.0x-5.0x
• Repurchased 1.8 million shares ($21 million total purchase
Current Target price) (6)
(1) As of 3/31/19; Excludes lender escrows of $15 million and expected incremental business interruption insurance proceeds to be received of ~ $13 million
(2) Based on CorePoint’s closing share price on 5/31/19
(3) As of 3/31/19; Subsequent to quarter end the Company utilized non-core asset sale proceeds to repay $15 million of CMBS debt
(4) Assumes exercise of all borrower extension options
(5) Based on annualized dividend and CorePoint’s closing share price on 5/31/19
(6) Commenced a $50 million share repurchase program in March 2019. Through 5/14/19 (1Q19 Earnings Press Release date), the Company repurchased 1.8 million 25
shares of its common stock at an average price of $11.58 per share
(7) Represents Q1 2019 TTM Pro Forma Adjusted EBITDAre2018
Core
Why Midscale
Portfolio
to 2019B
2019 Earnings Segmentation
Hotels?
EBITDA Bridge
Expectations
FY2018 to 2019 EBITDAre Outlook
53 of 54 reposition hotels completed
Hotels with significant exposure to oil-
as of 12/31/18
industry related demand are expected to
experience headwinds in 2019 compared to
Room nights lost in 2017 and 2018
2018 due to Hurricanes
Harvey and Irma. We expect
limited room nights lost in
2019, resulting in Estimated Adjusted EBITDAre decline from
incremental Adjusted the remaining portfolio
EBITDAre compared to 2018
(1) 2018 Pro Forma Adjusted EBITDAre
(2) Represents the midpoint of 2019 Outlook for Adjusted EBITDAre of $173 to $184 million
(3) Based on the following outlook ranges: hurricane impact of $9 to $12 million, repositioning impact $6 to $8 million, oil markets impact of -$10 to -$7 million,
remaining portfolio of -$12 to -$9 million
26Appendix
The Formation of CorePoint
July January May
2017 2018 2018
Wyndham Hotels & Resorts, an
La Quinta Holdings announces the The simultaneous spin-off of
international hotel franchisor and
creation of two separate companies, operator, agrees to acquire the La 2018
CorePoint and acquisition of La
CorePoint Lodging and La Quinta. All Quinta’s franchising and
Quinta hotel franchising and hotel
of CorePoint’s hotels remain under management business by
management platform, inheriting
the La Quinta franchise brand. Wyndham closes. CorePoint
all franchise and management
begins trading.
agreements for CorePoint’s
portfolio.
CorePoint’s La Quinta
branded portfolio
inherits access to 60+ Franchised Hotels
million Wyndham
loyalty members as 9,000+
Owned Hotels part of the
Owned Hotels CorePoint becomes
3161 transaction
316 La Quinta’s largest
franchisee
Franchised Hotels
576
Franchised
Hotels
892
28
(1) CorePoint owns 310 hotels as of 5/31/19Experienced Executive Team
Keith Cline -- President & Chief Executive Officer
Cline served as La Quinta’s President and Chief Executive Officer from September 2015 until May 2018. Prior to his appointment
as CEO, Cline served as La Quinta’s EVP, Chief Financial Officer from 2013 until 2015. Before joining La Quinta, Cline served as
Chief Administrative Officer and Chief Financial Officer at Charming Charlie, Inc. and also SVP of Finance at Express, Inc. Cline
began his career at Arthur Andersen & Company, and held financial leadership roles at The J.M. Smucker Company, FedEx
Custom Critical and Limited Brands. Cline graduated summa cum laude from the University of Akron with a B.S. in Accounting
and a M.B.A. in Finance.
Dan Swanstrom -- Executive Vice President, Chief Financial Officer
Swanstrom joined CorePoint in May 2018 from Monogram Residential Trust where he served as EVP, Chief Financial Officer.
Monogram was acquired by a Greystar Real Estate Partners led fund in a transaction valued at approximately $3 billion in
September 2017. Prior to Monogram, he worked at Morgan Stanley and served in a variety of capacities, most recently as
Executive Director in the Real Estate Investment Banking Division. During his tenure at Morgan Stanley, Swanstrom managed the
execution of public and private capital raises and mergers and acquisitions in excess of $25 billion. He also served in various
leadership roles at AEW Capital Management and Deloitte & Touche LLP. Swanstrom received a B.S. in Accounting from Boston
College and an M.B.A. from the University of North Carolina at Chapel Hill. Swanstrom is also a certified public accountant
(inactive).
Mark Chloupek -- Executive Vice President, Secretary & General Counsel
Chloupek served as La Quinta’s Executive Vice President and General Counsel from 2006 to 2018, and served as Secretary of La
Quinta since 2013. From 1999 through 2006, Chloupek served as Vice President, Senior Vice President and Chief Counsel of
Operations for Wyndham International, Inc. Prior to joining Wyndham, from 1996 to 1999, Mr. Chloupek worked for Locke Lord
LLP (formerly Locke Purnell Rain Harrell—a professional corporation). Additionally, Chloupek currently serves on the board of
the Dallas Chapter of the Juvenile Diabetes Research Foundation and formerly served on the board of The Texas General Counsel
Forum. Chloupek received a B.A. in economics from the College of William and Mary, where he graduated Phi Beta Kappa and
summa cum laude and received a J.D. from the University of Virginia School of Law.
29Best-in-Class Corporate Governance
9 out of 11 directors are independent
Audit, Compensation and Corporate Governance Committees are independent
Our board of directors is not classified and each director is subject to annual elections
Our board of directors cannot classify without stockholder approval
Directors who fail to receive majority vote in uncontested elections are required to submit
their resignation
Independent directors meet regularly in executive sessions
Opted out of the Maryland business combination and control share acquisition statutes, and
cannot opt back in without stockholder approval
We do not have a stockholder rights plan and any plan adopted without stockholder approval
would require stockholder ratification or expire within one year
302018
Core
Why Midscale
Portfolio
to 2019BSegmentation
Definitions Hotels?
EBITDA Bridge
Unaudited Non-GAAP Financial Measures
The Company refers in this presentation to certain non-GAAP financial measures. Please see definitions below relating to such non-GAAP
financial measures.
These measures are not to be considered more relevant or accurate than the measures presented in accordance with GAAP. Further these non-
GAAP measures have limitations as analytical tools and should not be considered either in isolation or as a substitute for net (loss) income, cash
flow or other methods of analyzing the Company’s results as reported under GAAP. For all non-GAAP measures, neither the SEC nor any other
regulatory body has passed judgement on these non-GAAP measures.
EBITDAre, Adjusted EBITDAre, Adjusted EBITDAre Margin, Hotel Adjusted EBITDAre, Hotel Adjusted EBITDAre margin and NOI
“EBITDAre.” The Company presents EBITDAre in accordance with guidelines established by the National Association of Real Estate Investment
Trusts (“NAREIT”). NAREIT defines EBITDAre as net income or loss, excluding interest expense, income tax expense, depreciation and
amortization, gains or losses on the disposition of property, impairments, and adjustments to reflect the entity’s share of EBITDAre of
unconsolidated affiliates. The Company believes EBITDAre is a useful performance measure to help investors evaluate and compare the results
of the Company’s operations from period to period. EBITDAre is intended to be a supplemental non-GAAP financial measure that is independent
of a company’s capital structure.
“Adjusted EBITDAre.” The Company adjusts EBITDAre when evaluating its performance because the Company believes that the adjustment for
certain items, such as restructuring and separation transaction expenses, acquisition and disposition transaction expenses, stock-based
compensation expense, discontinued operations, and other items not indicative of ongoing operating performance, provides useful
supplemental information to management and investors regarding its ongoing operating performance. The Company believes that EBITDAre and
Adjusted EBITDAre provide useful information to investors about it and its financial condition and results of operations for the following reasons:
(i) EBITDAre and Adjusted EBITDAre are among the measures used by the Company’s management to evaluate its operating performance and
make day-to-day operating decisions; and (ii) EBITDAre and Adjusted EBITDAre are frequently used by securities analysts, investors, lenders and
other interested parties as a common performance measure to compare results or estimate valuations across companies in and apart from the
Company’s industry sector.
312018
Core
Why Midscale
Portfolio
to 2019B
Definitions Segmentation
Hotels?
EBITDA Bridge
(continued)
EBITDA, EBITDAre and Adjusted EBITDAre are not recognized terms under GAAP, have limitations as analytical tools and should not be considered
either in isolation or as a substitute for net income (loss), cash flow or other methods of analyzing the Company’s results as reported under GAAP.
Some of these limitations are that these measures:
• do not reflect changes in, or cash requirements for, the Company’s working capital needs;
• do not reflect the Company’s interest expense, or the cash requirements necessary to service interest or principal payments, on its
indebtedness;
• do not reflect the Company’s tax expense or the cash requirements to pay its taxes;
• do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
• EBITDAre and Adjusted EBITDAre do not include gains or losses on the disposition of properties which may be material to our operating
performance and cash flow;
• do not reflect the impact on earnings or changes resulting from matters that the Company considers not to be indicative of our future
operations, including but not limited to discontinued operations, impairment, acquisition and disposition activities and restructuring expenses;
• although depreciation, amortization and impairment are non-cash charges, the assets being depreciated, amortized or impaired will often have
to be replaced, upgraded or repositioned in the future, and EBITDA, EBITDAre and Adjusted EBITDAre do not reflect any cash requirements for
such replacements; and
• other companies in the Company’s industry may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently, limiting their usefulness as
comparative measures.
Because of these limitations, EBITDA, EBITDAre and Adjusted EBITDAre should not be considered as a replacement to net income presented in
accordance with GAAP, discretionary cash available to the Company to reinvest in the growth of its business or as measures of cash that will be
available to the Company to meet its obligations.
“Comparable Hotel Adjusted EBITDAre” measures property-level results at the Company’s Comparable hotels before corporate-level expenses
and is a key measure of the hotel’s profitability. The Company presents Pro Forma Hotel Adjusted EBITDAre to help the Company and its investors
evaluate the ongoing operating performance of the Company’s properties.
“Comparable Hotel Adjusted EBITDAre margin” represents the ratio of Pro Forma Comparable Hotel Adjusted EBITDAre to pro forma total
revenues.
“NOI” measures property-level results before corporate-level expenses and includes a 4% capex reserve and is a key measure of the hotel’s
operations. The Company presents NOI to help the Company and its investors evaluate the ongoing performance of the Company’s properties.
322018
Core
Why Midscale
Portfolio
to 2019B
Non-GAAP Segmentation
Hotels?
EBITDA Bridge
Reconciliations
PRO FORMA ADJUSTED EBITDAre AND PRO FORMA HOTEL ADJUSTED EBITDAre
NON-GAAP RECONCILIATION (1)
(unaudited, in millions)
Three Months Ended Three Months Ended Year Ended TTM March 31,
March 31, 2019 March 31, 2018 December 31, 2018 2019
Net Income (Loss) attributable to CorePoint Lodging
Stockholders $ (27) $ (15) $ (262) $ (274)
Interest expense 18 13 64 69
Income tax expense 5 (1) 21 27
Depreciation and amortization 44 37 156 163
Loss from discontinued operations — 5 25 20
EBITDA 40 39 4 5
Impairment loss — — 154 154
Casualty (gain) loss — (1) (4) (3)
EBITDAre 40 38 154 156
Equity-based compensation 2 1 7 8
Spin-off and reorganization expenses 1 12 44 33
Loss on extinguishment of debt — — 10 10
Other (income) expenses, net (2) — 1 (8) (9)
Adjusted EBITDAre 43 52 207 198
Pro forma adjustments (3) — (15) (27) (12)
Pro Forma Adjusted EBITDAre $ 43 $ 37 $ 180 $ 186
Corporate, general and administrative expenses (4) 5 5 21 21
Pro Forma Hotel Adjusted EBITDAre $ 48 $ 42 $ 201 $ 207
Capex reserve (4% of Pro Forma Total Revenue) (8) (8) (36) (36)
NOI $ 40 $ 34 $ 165 $ 171
(1) For the three months ended March 31, 2018, the year ended December 31, 2018, and TTM March 31, 2019, amounts are calculated on a pro forma
basis. Refer to “Pro Forma Financial Information” included in the Q1 2019 Earnings Release for a discussion of the Pro Forma financial information.
(2) Other (income) expenses, net primarily consists of business interruption insurance proceeds
(3) Pro forma adjustments include adjustments for incremental fees based on the terms of the post spin-off management and franchise agreements,
adjustments to reflect the post spin-off corporate general and administrative costs, and adjustments to reflect the effects of hotels disposed of
during the pre-spin periods presented. 33
(4) Includes adjustments to exclude the effects of cash corporate, general and administrative costs.2018
Core
Why Midscale
Portfolio
to 2019B
Non-GAAP Segmentation
Hotels?
EBITDA (Cont’d)
Reconciliation Bridge
PRO FORMA TOTAL REVENUE
NON-GAAP RECONCILIATION (1)
(unaudited, in millions)
Three Months Ended Three Months Ended Year Ended TTM March 31,
March 31, 2019 March 31, 2018 December 31, 2018 2019
Total Revenue $ 208 $ 196 $ 862 $ 874
Pro forma adjustments (2) — 1 2 1
Pro Forma Total Revenue $ 208 $ 197 $ 864 $ 875
(1) For the three months ended March 31, 2018, the year ended December 31, 2018, and TTM March 31, 2019, amounts are calculated on a pro
forma basis. Refer to “Pro Forma Financial Information” included in the Q1 2019 Earnings Release for a discussion of the Pro Forma financial
information.
(2) Pro forma adjustments include adjustments to reflects the effects of hotels disposed of during the pre-spin periods presented and
adjustments related to additional revenue from loyalty program reimbursements. 34You can also read
