Investor Presentation TSX: HLC HLC.DB May 23, 2019 - - PowerPoint PPT Presentation

Investor Presentation

TSX: HLC HLC.DB May 23, 2019

This corporate presentation contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events

• r results and may include statements regarding Holloway's future financial position, business strategy,

financial results, plans and objectives. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward looking-information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what Holloway currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in Holloway's Annual Information Form ("AIF"), dated March 8, 2019 which is available at www.sedar.com. Holloway does not intend to update or revise any such forward-looking information should its assumptions and estimates change. All information contained in this presentation is as of March 31, 2019 unless otherwise specified.

TSX:HLC | 2

Forward-Looking Statements

Holloway

LODGING

Company Overview

TSX:HLC | 4 (1) As of May 21, 2019

Q1 2019 Overview

Development assets including two land parcels, one free standing single tenant property, and one commercial

• ffice building.

All Holloway hotels are internally managed. Holloway Management Services also provides services to 14 third party hotels1.

Enterprise Value

$259mn

TSX Ticker

HLC

Market Cap1

$114mn

Net Debt

$145mn

Price1

$7.32

Other Assets Management Services

Hotels

27

Select Service

22

Full Service

5

Markets 17 Provinces / T erritories 8 Brands 9 Rooms 3,055

TSX:HLC | 5

Geographically Diverse Portfolio

Yellowknife, NT Whitehorse, YT Fort Nelson, BC Fort St. John, BC Whitecourt, AB Drayton Valley, AB Slave Lake, AB Thunder Bay, ON Timmins, ON London, ON Ottawa, ON Saint John, NB

• St. John’s, NL

Sydney, NS Truro, NS Stellarton & New Glasgow, NS Parksville, BC High Level, AB Fairview, AB Iqaluit, NU

Managed Property Owned Property

Wabush, NL Dartmouth, NS Windsor, NS Grande Prairie, AB Moncton, NB

TSX:HLC | 6 (1) 2019 Forecast

Geographically Diverse Portfolio

Hotel NOI by Region1 14% 29% 32%

6%

19%

TSX:HLC | 7 (1) 2019 Forecast (2) ‘Other’ includes unbranded and regional-brand hotels

Brand Diversification

Other2 Other2

20.1% 16.9% 13.2% 13.1% 12.1% 12.1% 6.4% 6.2%

NOI1

849 718 336 323 281 271 178 99

Rooms

Holloway

LODGING

Financial Information

TSX:HLC | 9

Focused on Cash Flow

31.3 29.3 32.0 33.4 32.2 12.0 10.7 17.4 19.4 19.3 10.2 9.3 15.4 17.3 17.2 5 10 15 20 25 30 35 40 2015 2016 2017 2018 2019*

$mn

NOI, FFO & AFFO

NOI FFO AFFO

*Q1 2019 TTM

TSX:HLC | 10

Steady Growth per Share

$1.62 $1.55 $1.70 $1.86 $2.01 $0.62 $0.57 $0.92 $1.09 $1.11 $0.53 $0.49 $0.82 $0.97 $0.99 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2015 2016 2017 2018 2019*

NOI, FFO & AFFO per Share

NOI per Share FFO per Share AFFO per Share

6.8% CAGR1 19.4% CAGR1 20.9% CAGR1

*Q1 2019 TTM (1) Compound Annual Growth Rate

Debt ratio improvement due to principal repayments and improved NOI Lower cost of debt due to refinancings, offset by higher prime rate

TSX:HLC | 11

Focused on a Strong Balance Sheet

7.4X 8.0X 6.4X 5.2X 5.7X 3.0X 4.0X 5.0X 6.0X 7.0X 8.0X 9.0X 2015 2016 2017 2018 2019*

Net Debt to NOI

6.1% 6.1% 5.5% 5.9% 5.5% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 2015 2016 2017 2018 2019*

Weighted-Average Cost of Debt

*Q1 2019 TTM

Flexible capital structure

▪ 35% of debt at March 31, 2019 is convertible debentures with no covenants, maturing in 2023 ▪ Minimal mortgage maturities over the next 3 years ▪ 4 mortgages totaling $11.6mn were repaid in the first quarter of 2019 with proceeds from hotel sales ▪ Three unencumbered properties which could provide additional financing

Total liquidity of $37.6mn

TSX:HLC | 12

Flexible Capital Structure

7.1 5.8 3.4 46.9 51.4 2.9 10 20 30 40 50 60 2019 Remaining 2020 2021 2022 2023 Thereafter

$mn

Debt Maturities

Mortgage Maturing Mortgage Amortization Debentures

HLC shares have outperformed comparable market indices over the past five years

“TSX Real Estate Index” – S&P/TSX Capped Real Estate Index (TTRE), a benchmark of the Canadian publicly traded real estate sector “TSX REIT Index” – S&P/TSX Capped REIT Index (RTRE), a benchmark of Canadian publicly traded equity REITs “S&P REIT Index” – S&P Developed REIT Index (SREIT), an international benchmark of publicly traded equity REITs domiciled in developed markets

TSX:HLC | 13 (1) Based on annualized index returns as of April 30, 2019; YTD based on January 1 – April 30, 2019 returns (2) Total cumulative return for $100 invested on December 31, 2013 (assuming reinvestment of dividends)

HLC Outperforms the Market

16% 16% 18% 18% 22% 22% 13% 13%

0% 5% 10% 15% 20% 25% 5 Years 3 Years 1 Year YTD

Annualized T

• tal Return1

S&P REIT Index TSX REIT Index TSX Real Estate Index HLC 158 162 183

205 205

75 100 125 150 175 200 225 Dec '13 Dec '14 Dec '15 Dec '16 Dec '17 Dec '18 Apr '19

Cumulative T

• tal Return2

S&P REIT Index TSX REIT Index TSX Real Estate Index HLC

Holloway

LODGING

Value Creation

Holloway consistently sells assets at prices greater than book value

TSX:HLC | 15

Value Creation

Hotel Sale Price Gain on Sale % of Book Value

Ramada Trenton $4.0mn $0.1mn 3% Travelodge Etobicoke $13.0mn $1.6mn 15% Holiday Inn Express Myrtle Beach $7.6mn $0.3mn 6% Travelodge Barrie $8.7mn $2.9mn 52% Holiday Inn Oakville $19.4mn $7.8mn 69% Travelodge Belleville $7.0mn ($0.1mn)

• 2%

Super 8 High Level $4.8mn ($0.4mn)

• 8%

Holiday Inn Ottawa East $50.0mn $26.3mn 118% Travelodge Dartmouth $6.9mn $3.5mn 109% Days Inn & Travelodge Moncton $14.0mn $2.5mn1 23% Super 8 Windsor $5.3mn $2.6mn1 108% T

• tal

$140.7mn $47.2mn 54%

(1) Presented within equity under the IAS 16 revaluation model

Hotel Date of Sale Cap Rate

Ramada Trenton January 2015

• 0.4%

Travelodge Etobicoke February 2015 2.8% Holiday Inn Express Myrtle Beach December 2015 6.2% Travelodge Barrie September 2016 6.9% Holiday Inn Oakville January 2017 7.2% Travelodge Belleville March 2017 4.6% Super 8 High Level October 2018 10.6%2 Holiday Inn Ottawa East December 2018 8.2% Travelodge Dartmouth January 2019 9.5%2 Days Inn & Travelodge Moncton March 2019 9.3%2 Super 8 Windsor March 2019 11.6%2 Weighted-average cap rate1 8.2%

Holloway continues to trade at a discount to the valuations it realizes on hotel sales

TSX:HLC | 16 (1) Cap rates calculated using the last twelve months of operating results prior to the sale, deducting industry- standard 7% of revenue for management fees and capex reserve (2) Property retained as Holloway Management Services customer after sale

Cap Rates on Hotel Sales

Acquired 256 room, full-service Chimo hotel in Ottawa in 2014 for $16.3mn1 Spent $12mn in capital, including a $9mn renovation and conversion to Holiday Inn brand in 2016 Significantly improved demand, rate, and operations, increasing both revenue and net income: Sold Holiday Inn Ottawa East hotel in 2018 for $50mn, representing a 77% return on investment

TSX:HLC | 17 (1) Purchase price based on portfolio purchase allocation (2) TTM performance prior to 2014 acquisition (3) TTM performance prior to 2018 sale

Case Study - Holiday Inn Ottawa East

Chimo Ottawa to Holiday Inn Ottawa Conversion

Prior to purchase2 Prior to sale3 Improvement Occupancy 62% 73% +17% ADR $95 $152 +60% RevPAR $59 $111 +86% NOI % 18% 38% +110%

Following the sale of the Holiday Inn Ottawa East hotel, Holloway announced plans to redeem $40.6 million in Series C debentures and to commence a substantial issuer bid for its common shares. Debenture Redemption:

▪ Holloway redeemed all of its 7.50% Series C Convertible Unsecured Subordinated Debentures due September 30, 2021, on January 3, 2019 ▪ The redemption of the Company’s highest-interest debt strengthens its balance sheet while reducing the weighted average cost of borrowing

Substantial Issuer Bid (“SIB”):

On January 22, 2019, a total of 1.55 million common shares were purchased, representing approximately 9.1% of total shares outstanding

TSX:HLC | 18

Debenture Redemption and Substantial Issuer Bid

Three prongs: debt repayment, dividend and share repurchases Mandatory principal amortization of ~$3.7mn per year

▪ Represents ~$0.23 per share of value or 3.1%1

Annual dividend of $0.14

▪ Represents a yield of 1.9%1

Repurchase shares opportunistically

TSX:HLC | 19 (1) Based on share price on May 21, 2019

Returning Capital to Shareholders

Shares Repurchased T

• tal Cost

Average Price

2015 0.4mn $1.7mn $4.94 2016 0.1mn $0.7mn $4.58 2017 0.5mn $2.9mn $5.57 2018 1.2mn $7.5mn $6.09 Q1 2019 1.6mn $10.3mn $6.57

TSX:HLC | 20

Returning Capital to Shareholders

4.4% 3.4% 5.3% 9.1% 9.8% 0% 5% 10% 15% 2015 2016 2017 2018 2019*

Net Payout Yield

Dividend Yield Buyback Yield

(1) Q1 2019 *Represents quarterly yield; prior years represent annual yields

2015 2016 2017 2018 20191 Market cap ($mn) 98 98 105 109 110 Dividends ($mn) 2.7 2.6 2.6 2.5 0.5 Dividend Yield 2.7% 2.7% 2.5% 2.3% 0.5%* Share repurchases ($mn) 1.7 0.7 2.9 7.5 10.3 Buyback Yield 1.7% 0.7% 2.8% 6.8% 9.3%* Net Payout Yield 4.4% 3.4% 5.3% 9.1% 9.8%* Total debt reduced ($mn) 18.1 (2.0) 29.4 21.6 37.8 Debt Paydown Yield 18.5% (2.0%) 28.0% 19.9% 34.4%* Shareholder Yield 22.9% 1.4% 33.3% 29.0% 44.2%* 22.9% 1.4% 33.3% 29.0% 44.2% 0% 20% 40% 60% 2015 2016 2017 2018 2019*

Shareholder Yield

Dividend Yield Buyback Yield Net Debt Paydown Yield

Holloway

LODGING

Strategy

Actively manage hotel operations to maximize profitability Acquire additional properties

▪ Accretive to Holloway ▪ Newer build select service or value add opportunities

Sell assets at attractive valuations Capitalize on internal development opportunities

▪ Reposition select assets to their highest and best use ▪ Develop excess land within existing portfolio

Establish Holloway Management Services as a national level management contract entity Pursue real estate development opportunities Return capital to shareholders through dividends, share repurchases and debt repayment

TSX:HLC | 22

Strategy

Comprehensive suite of services

Our turnkey services include sales and revenue management, strategic planning and budgeting, accounting and cost management, human resources, insurance, property taxes, purchasing, and maintenance and capital management.

Simple and transparent fee structure

We offer a fee structure that includes both a revenue-based and a performance-based fee, so we measure success by maximizing revenue and profit.

Flexible contract terms

T erms starting from 12 months, with straightforward termination clauses, allowing you to choose an arrangement that best fits your needs.

www.hlcorpmanagement.ca

TSX:HLC | 23

Holloway Management Services

Undervalued hotel company with presence across Canada Cash flow growth through hotel upgrades, acquisitions and return of Western Canadian economy Upside potential associated with redevelopment opportunities Focused on returning capital to shareholders

TSX:HLC | 24

Summary of Investment Opportunities

TSX:HLC | 25 (1) Shares outstanding and share price as of May 21, 2019 (2) Includes shares owned and controlled by Clarke Inc. which has two representatives on the Board (3) Includes shares owned and controlled by Clarke Inc.

Share Structure

Holloway Lodging Corporation (TSX:HLC)

Shares Outstanding1 15,584,112 Management/Board Ownership2 51% Institutional Ownership3 84% Share Price1 $7.32 52-Week Trading Range $5.80-7.32 Market Capitalization1 $114mn Enterprise Value $259mn

TSX:HLC | 26

Contact Us

Holloway Lodging Corporation

145 Hobsons Lake Drive, Suite 106 Halifax, Nova Scotia, B3S 0H9 T elephone: 902-404-3499 Fax: 902-423-4001 Email: investorrelations@hlcorp.ca Michael Rapps, Chairman, at (416) 855-1925 Jane Rafuse, CFO, at (902) 443-5101 www.hlcorp.ca TSX: HLC, HLC.DB