Morgan Stanley Investment Banking Pitch Book
Project Roosevelt
• Selling the Hudson and Delano
and retiring the Yucaipa preferred
would likely leave Monroe with
little to no cash
.
- Assumes Delano sold for
$240MM; pro forma preferred
balance of $137MM at June 30,
2016
- This analysis assumes Yucaipa
preferred is refinanced with a
15% coupon and current-pay/
PIK split on interest
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
Preferred
Cumulative CF
Mortgage Balance
MBLV Lease
NOLS
Total Adjustments
(50)
(155)
(18)
(182)
(5)
41
(369)
Morgan Stanley
MONROE VALUATION
Post-Asset Sale Standalone Monroe (cont'd)
Cash Flows under various growth and G&A scenarios
Cash Flow - Sell Only Delano
Management Projections
Management Fees - Existing
Management Fees- Under Construction
Total Fees
Owned Operations
Hudson EBITDA less FF&E / Capex
Total Revenues
Management Expenses
Public Company Expenses
EBITDA
Corporate Debt
Interest on Remaining Mortgage
Preferred Payment
Levered Operating Cash Flow
Total Net Cash Flow
Ending Cash Balance
Sources & Uses
SMM
Sources
Sales of Delano
Sale of Hudson
Return of Escrow
Termination Fees
Balance Sheet Cash
Total Sources
Uses
Delano Mortgage Paydown
Hudson Mortgage Paydown
Hudson Yield Maintenance Paydown (After Proceeds)
Selling Costs
Repayment of Preferred
Balance Sheet Cash
Total Uses
240
2
10
7
259
159
32
49
5
14
259
2016E
19.1
19.1
1.8
10.4
31.3
(14.1)
(3.0)
14.1
(3.7)
(11.1)
(0.7)
(0.7)
(0.7)
Total Net Cash Flow
Terminal Value (11.5x 2020 EBITDA)
Total Net Cash Flow
2017E
15.7
2.2
17.9
2.8
12.1
32.8
(15.7)
(3.1)
13.9
Present Value of Cash Flows
[email protected]% Cost of Equity
PV @ 22.5% Cost of Equity
[email protected] % Cost of Equity
(2.0)
(11.1)
(9.6)
(8.7)
(8.7)
(9.4)
Strictly Confidential
2018E
16.3
3.4
19.7
3.1
13.9
36.7
(16.2)
(3.2)
17.3
(2.1)
(11.1)
(10.3)
(6.2)
(6.2)
(15.6)
Value of Standalone Company (Sell Delano)
Sell Delano
$/Sh Total
(1.79) (64.2)
(1.66) (59.4)
(1.54) (55.1)
2019E
16.8
6.8
23.6
2.5
15.5
41.6
(16.7)
(3.3)
21.6
(2.1)
(11.1)
(11.1)
(2.7)
(2.7)
(18.3)
(0.7) (8.7)
2018E
2019E
2016E 2017E
(0.7) (8.7) (6.2) (2.7)
(0.6) (6.0)
(0.6) (5.8)
(0.6) (5.6)
2020E
17.3
7.4
24.7
2.6
15.9
43.2
(17.2)
(3.4)
22.6
«..
(109.2)
(6.2) (111.9)
(3.6) (54.0)
(3.4) (49.7)
(3.2) (45.8)
25View entire presentation