Print Page  Close Window

SEC Filings

10-K
RLJ LODGING TRUST filed this Form 10-K on 03/01/2019
Entire Document
 << Previous Page | Next Page >>

Management fees and franchise fees, which are computed as a percentage of gross revenue and room revenue, respectively, decreased as a result of lower revenues at the comparable properties.
 
Depreciation and Amortization
 
Depreciation and amortization expense increased $54.6 million, or 29.2%, to $241.6 million for the year ended December 31, 2018 from $187.0 million for the year ended December 31, 2017. The increase was a result of a $51.7 million increase in depreciation and amortization expense attributable to the non-comparable properties and a $3.0 million increase in depreciation and amortization expense attributable to the comparable properties.

Property Tax, Insurance and Other
 
Property tax, insurance and other expense increased $43.7 million, or 47.8%, to $135.1 million for the year ended December 31, 2018 from $91.4 million for the year ended December 31, 2017.  The increase was primarily attributable to a $39.8 million increase in property tax, insurance and other expense attributable to the non-comparable properties and a $3.8 million increase in property tax, insurance and other expense attributable to the comparable properties. The increase in property tax, insurance and other expense attributable to the non-comparable properties includes property tax reassessments in certain jurisdictions as a result of the merger with FelCor. 
 
General and Administrative
 
General and administrative expense increased $8.7 million, or 21.6%, to $49.2 million for the year ended December 31, 2018 from $40.5 million for the year ended December 31, 2017.  The increase in general and administrative expense was primarily attributable to our larger operating platform as a result of the merger with FelCor, which included an increase of $3.6 million in professional fees and other general and administrative costs and a $2.3 million increase in compensation expense. The increase in compensation expense for the year ended December 31, 2018 was due to an increase in salary, bonus, and other employee compensation costs, which includes the accelerated vesting of restricted share awards as a result of our former President and Chief Executive Officer retiring in August 2018. The remaining increase in general and administrative expense was due to an increase of $2.8 million related to expenses that were outside of the normal course of operations, including debt modification costs, executive transition costs, and professional fees incurred related to an activist shareholder defense, all of which were partially offset by receipts of prior year employee tax credits.

Transaction Costs
 
Transaction costs decreased $42.3 million, or 95.4%, to $2.1 million for the year ended December 31, 2018 from $44.4 million for the year ended December 31, 2017.  The decrease in transaction costs in 2018 was attributable to a decrease of approximately $42.5 million in transaction and integration costs related to the merger with FelCor in 2017, which was partially offset by approximately $0.2 million in transaction costs that we incurred as a result of the higher volume of asset disposition transactions that occurred during the year ended December 31, 2018.
 
Interest Expense
 
The components of our interest expense for the years ended December 31, 2018 and 2017 were as follows (in thousands):
 
For the year ended December 31,
 
 
 
 
 
2018
 
2017
 
$ Change
 
% Change
Senior Notes
$
28,428

 
$
15,918

 
$
12,510

 
78.6
%
Revolver and Term Loans
43,458

 
39,262

 
4,196

 
10.7
%
Mortgage loans
26,253

 
19,643

 
6,610

 
33.7
%
Amortization of deferred financing costs
3,504

 
3,499

 
5

 
0.1
%
Total interest expense
$
101,643

 
$
78,322

 
$
23,321

 
29.8
%

Interest expense increased $23.3 million, or 29.8%, to $101.6 million for the year ended December 31, 2018 from $78.3 million for the year ended December 31, 2017.  The increase in interest expense was primarily due to the impact of assuming the senior notes and mortgage loans in the merger with FelCor in 2017, along with the outstanding borrowings under the Revolver during the year ended December 31, 2018. The increase in interest expense was partially offset by the redemption of

47

 << Previous Page | Next Page >>