Morgan Stanley Investment Banking Pitch Book
.
Project Roosevelt
Analysis assumes that Yucaipa
preferred equity is retired and
Trust Preferred stays in-place
- To fully redeem the Yucaipa
preferred, total sale price for
Hudson and Delano would have
to be $555MM or higher(¹)
- Trust preferred ($50MM) has put
rights for "sale of all or
substantially all" of the
Company's assets; this analysis
assumes that the servicer
agrees to keep in place under
current terms
Based on a standalone company
model, near-term cash flows are
negative for several years
Sources and costs of funding
capital shortfalls are unclear for a
sub-scale company with little to no
EBITDA or levered cash flow
through at least 2018
Terminal Value Adjustment
12/31/2019
Trust Preferred
Yucaipa Preferred
Cumulative CF
MBLV Lease
NOLS
Total Adjustments
(50)
(6)
(5)
6
(54)
Morgan Stanley
MONROE VALUATION
Post-Asset Sale Standalone Monroe (cont'd)
Cash Flows under various growth and G&A scenarios
Cash Flow - Sell Both Assets
Management Projections
Management Fees - Existing
Management Fees - Under Construction
Total Fees
Owned Operations
Total Revenues
Management Expenses
Public Company Expenses
EBITDA
Corporate Debt
Levered Operating Cash Flow
Total Net Cash Flow
Ending Cash Balance
Sources & Uses
Sources
Sale of Hudson
Sales of Delano
Return of Escrow
Termination Fees
Balance Sheet Cash
Total Sources
Uses
Hudson Mortgage
Delano Mortgage
Selling Costs
Repayment of Preferred
Balance Sheet Cash
Total Uses
310
240
5
10
7
572
263
159
17
133
572
2016E
16.6
16.6
1.8
18.3
(14.1)
(3.0)
1.2
(3.7)
(2.5)
Note
1. Includes estimated brokerage fees; does not include additional friction costs such as transfer taxes
(2.5)
(2.5)
Total Net Cash Flow
Terminal Value (11.5x 2020 EBITDA)
Total Net Cash Flow
Present Value of Cash Flows
PV@ 20.0% Cost of Equity
PV @ 22.5% Cost of Equity
PV@ 25.0 % Cost of Equity
Strictly Confidential
2017E
13.1
2.2
15.2
2.8
18.0
(15.7)
(3.1)
(0.8)
(2.0)
(2.8)
(2.8)
(5.3)
Equity Value of Standalone Company
Sell Both Assets
2018E
13.5
3.4
16.9
3.1
20.0
(16.2)
(3.2)
0.6
(2.1)
(1.5)
(1.5)
(6.8)
2019E
14.0
6.8
20.8
2.5
23.3
(16.7)
(3.3)
3.3
(2.1)
1.2
1.2
(5.6)
2016E
2018E
2017E
(2.5) (2.8) (1.5)
(2.5) (2.8) (1.5)
2020E
14.4
7.4
21.8
2.6
24.3
(17.2)
(3.4)
3.7
2019€
1.2
(11.2)
(10.0)
$/Sh
Total
(0.27) (9.7) (2.1) (1.9) (0.9) (4.8)
(0.26) (9.2) (2.1) (1.8) (0.8) (4.5)
(0.24)
(8.7) (2.0) (1.8)
(0.8)
(4.1)
3333
23View entire presentation