RLJ Lodging Trust Reports Fourth Quarter and Full Year 2023 Results

February 26, 2024

Fourth Quarter RevPAR increased 5.2%

Executed Multiple Capital Allocation Initiatives in 2023

Acquired the Wyndham Boston Beacon Hill

BETHESDA, Md.--(BUSINESS WIRE)--Feb. 26, 2024-- RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months and year ended December 31, 2023.

Fourth Quarter Highlights

  • Portfolio Comparable RevPAR of $133.84
  • Total Revenue of $319.7 million
  • Net income attributable to common shareholders of $1.7 million
  • Net income per diluted share attributable to common shareholders of $0.01
  • Adjusted EBITDA of $79.2 million
  • Adjusted FFO per diluted common share and unit of $0.34
  • Repurchased 0.9 million common shares for $9.9 million at an average price per share of $10.69
  • Ended year with $1.1 billion of liquidity, including approximately $516.7 million of unrestricted cash and $600.0 million in undrawn revolver capacity

Full Year Highlights

  • Portfolio Comparable RevPAR of $141.24
  • Total Revenue of $1.3 billion
  • Net income attributable to common shareholders of $51.3 million
  • Net income per diluted share attributable to common shareholders of $0.32
  • Adjusted EBITDA of $364.5 million
  • Adjusted FFO per diluted common share and unit of $1.66
  • Repurchased 7.6 million common shares for $77.2 million at an average price per share of $10.20

“We are pleased to have achieved top-quartile RevPAR growth, capping off a very successful year of outperformance for RLJ,” commented Leslie D. Hale, President and Chief Executive Officer. “Our urban-centric portfolio is uniquely positioned to capture the improving demand that urban markets are disproportionately seeing, and the incremental lift from the first wave of our completed conversions, which should continue to be a tailwind into 2024. Additionally, throughout the year we demonstrated the optionality our strong balance sheet provided by launching several new conversions, repurchasing shares at an attractive basis, doubling our dividend and more recently bringing forward another compelling conversion opportunity by acquiring the Wyndham Boston Beacon Hill. Our strong execution has positioned us to maintain our momentum in 2024 and beyond, supported by continued strength of Urban leisure, ongoing improvement in business travel, and robust group bookings."

The prefix “comparable” as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.

Financial and Operating Highlights

($ in millions, except ADR, RevPAR, and per share amounts)

(unaudited)

       

 

For the three months ended

December 31,

 

For the year ended

December 31,

 

 

2023

 

 

2022

 

Change

 

 

2023

 

 

2022

 

Change

Operational Overview: (1)

 

 

 

 

 

 

 

Comparable ADR

$

193.14

 

$

190.20

 

1.5

%

 

$

196.77

 

$

188.21

 

4.5

%

Comparable Occupancy

 

69.3

%

 

66.9

%

3.6

%

 

 

71.8

%

 

68.9

%

4.2

%

Comparable RevPAR

$

133.84

 

$

127.25

 

5.2

%

 

$

141.24

 

$

129.61

 

9.0

%

 

 

 

 

 

 

 

 

Financial Overview:

 

 

 

 

 

 

 

Total Revenues

$

319.7

 

$

302.2

 

5.8

%

 

$

1,325.6

 

$

1,193.7

 

11.0

%

Comparable Hotel Revenue

$

319.5

 

$

302.2

 

5.7

%

 

$

1,325.3

 

$

1,196.9

 

10.7

%

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

1.7

 

$

0.3

 

466.7

%

 

$

51.3

 

$

16.8

 

205.4

%

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA (2)

$

89.6

 

$

87.6

 

2.3

%

 

$

401.4

 

$

370.0

 

8.5

%

Comparable Hotel EBITDA Margin

 

28.1

%

 

29.0

%

(93) bps

 

 

30.3

%

 

30.9

%

(63) bps

Adjusted EBITDA

$

79.2

 

$

79.0

 

0.3

%

 

$

364.5

 

$

336.5

 

8.3

%

 

 

 

 

 

 

 

 

Adjusted FFO

$

53.4

 

$

52.8

 

1.1

%

 

$

260.4

 

$

221.1

 

17.8

%

Adjusted FFO Per Diluted Common Share and Unit - Diluted

$

0.34

 

$

0.33

 

3.0

%

 

$

1.66

 

$

1.36

 

22.1

%

Note:

(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of December 31, 2023.

(2) Comparable Hotel EBITDA for the three months ended December 31, 2023 and 2022 excludes $0.3 million and $0.7 million, respectively, from sold hotels. Comparable Hotel EBITDA for the years ended December 31, 2023 and 2022 excludes $0.8 million and $1.2 million, respectively, from sold hotels. Comparable Hotel EBITDA for the full year ended December 31, 2022 includes $0.6 million net income from acquired hotels.

Acquisitions

During the first quarter of 2024, the Company completed the purchase of the 304-room Wyndham Boston Beacon Hill for $125 million, which was previously subject to a ground lease that expired in 2028. The Company funded the acquisition with existing cash on hand.

Conversions

During the fourth quarter of 2023, the Company announced that its Renaissance Pittsburgh Hotel will join Marriott's Autograph Collection, and the Wyndham Pittsburgh University Center will convert to a Courtyard by Marriott. Including these two conversions, the Company has announced eight conversions since 2021 including three which have already been completed.

Share Repurchases

During 2023, the Company repurchased 7.6 million shares for $77.2 million, at an average price per share of $10.20, which included approximately 0.9 million common shares for $9.9 million at an average price per share of $10.69 during the fourth quarter. The Company's share buyback program currently has approximately $212.7 million of remaining capacity.

Balance Sheet

As of December 31, 2023, the Company had approximately $1.1 billion of total liquidity, comprising approximately $516.7 million of unrestricted cash and $600.0 million available under its revolving credit facility ("Revolver"), and $2.2 billion of debt outstanding.

Dividends

The Company’s Board of Trustees declared a quarterly cash dividend of $0.10 per common share of beneficial interest of the Company in the fourth quarter. The dividend was paid on January 16, 2024 to shareholders of record as of December 29, 2023.

The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares in the fourth quarter. The dividend was paid on January 31, 2024 to shareholders of record as of December 29, 2023.

2024 Outlook

($ in millions, except growth and per share amounts)
The Company is providing its annual outlook for all hotels owned as of February 26, 2024.

 

FY 2024

Comparable RevPAR Growth

2.5% to 5.5%

Comparable Hotel EBITDA

$395.0M to $425.0M

Adjusted EBITDA

$360.0M to $390.0M

Adjusted FFO per diluted share

$1.55 to $1.75

Additionally, the Company's full year 2024 outlook includes:

  • Net interest expense of $91.0 million to $93.0 million. The year over year increase is due to the impact of expiring swaps.
  • Capital expenditures related to renovations in the range of $100.0 million to $120.0 million
  • Diluted weighted average common shares and units of 154.0 million

The Company expects the first quarter of 2024 to be impacted by the timing of Easter and difficult comparisons to prior year growth rates, which will lead the first quarter RevPAR growth to be positive but below the low-end of the full-year range.

Potential future acquisitions, dispositions, financings, or share repurchases are not incorporated into the Company's outlook above and could result in a material change to the Company's outlook.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on February 27, 2024 at 10:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust’s fourth quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company’s website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and Comparable operating statistics, which is available through the Investor Relations section of the Company's website.

About Us

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward-Looking Statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” “may,” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled “Risk Factors,” “Forward- Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which will be filed on February 27, 2024, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

For additional information or to receive press releases via email, please visit our website:
http://www.rljlodgingtrust.com

RLJ Lodging Trust
Non-GAAP and Accounting Commentary

Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDAre, (5) Adjusted EBITDA, (6) Hotel EBITDA, and (7) Hotel EBITDA Margin. These Non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of its operating performance. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA Margin, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company defines such terms.

Funds From Operations (“FFO”)

The Company calculates Funds from Operations (“FFO”) in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company believes that the presentation of FFO provides useful information to investors regarding the Company’s operating performance and can facilitate comparisons of operating performance between periods and between real estate investment trusts (“REITs”), even though FFO does not represent an amount that accrues directly to common shareholders.

The Company’s calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. Additionally, FFO may not be helpful when comparing the Company to non-REITs. The Company presents FFO attributable to common shareholders, which includes unitholders of limited partnership interest (“OP units”) in RLJ Lodging Trust, L.P., the Company’s operating partnership, because the OP units may be redeemed for common shares of the Company. The Company believes it is meaningful for the investor to understand FFO attributable to all common shares and OP units.

EBITDA and EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization expense. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of its operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization expense) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.

In addition to EBITDA, the Company presents EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss (calculated in accordance with GAAP) excluding interest expense, income tax benefit or expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. The Company believes that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs.

Adjustments to FFO and EBITDA

The Company adjusts FFO, EBITDA, and EBITDAre for certain items that the Company considers outside the normal course of operations. The Company believes that Adjusted FFO, Adjusted EBITDA, and Adjusted EBITDAre provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income or loss, FFO, EBITDA, and EBITDAre, are beneficial to an investor’s understanding of the Company's operating performance. The Company adjusts FFO, EBITDA, and EBITDAre for the following items:

  • Transaction Costs: The Company excludes transaction costs expensed during the period
  • Pre-Opening Costs: The Company excludes certain costs related to pre-opening of hotels
  • Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income tax expense or benefit, and non-cash interest expense related to discontinued interest rate hedges
  • Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations

Hotel EBITDA and Hotel EBITDA Margin

With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and certain non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. The Company believes property-level results provide investors with supplemental information about the ongoing operational performance of the Company’s hotels and the effectiveness of third-party management companies.

Comparable Hotel EBITDA and Comparable Hotel EBITDA margin include prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels and excludes results from sold hotels as applicable. The following is a summary of Comparable hotel adjustments:

Comparable adjustments: Acquired hotel

For the twelve months ended December 31, 2022, Comparable adjustments included the following acquired hotel:

  • 21c Hotel Nashville acquired in July 2022

Comparable adjustments: Sold hotels

For the twelve months ended December 31, 2022, Comparable adjustments included the following sold hotels:

  • Marriott Denver Airport at Gateway Park sold in March 2022
  • SpringHill Suites Denver North Westminster sold in April 2022

RLJ Lodging Trust

Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

(unaudited)

       

 

December 31,
2023

 

December 31, 2022

Assets

 

 

 

Investment in hotel properties, net

$

4,136,216

 

 

$

4,180,328

 

Investment in unconsolidated joint ventures

 

7,398

 

 

 

6,979

 

Cash and cash equivalents

 

516,675

 

 

 

481,316

 

Restricted cash reserves

 

38,652

 

 

 

55,070

 

Hotel and other receivables, net of allowance of $265 and $319, respectively

 

26,163

 

 

 

38,528

 

Lease right-of-use assets

 

136,140

 

 

 

136,915

 

Prepaid expense and other assets

 

58,051

 

 

 

79,089

 

Total assets

$

4,919,295

 

 

$

4,978,225

 

Liabilities and Equity

 

 

 

Debt, net

$

2,220,778

 

 

$

2,217,555

 

Accounts payable and other liabilities

 

147,819

 

 

 

155,916

 

Advance deposits and deferred revenue

 

32,281

 

 

 

23,769

 

Lease liabilities

 

122,588

 

 

 

117,010

 

Accrued interest

 

22,539

 

 

 

20,707

 

Distributions payable

 

22,500

 

 

 

14,622

 

Total liabilities

 

2,568,505

 

 

 

2,549,579

 

Equity

 

 

 

Shareholders’ equity:

 

 

 

Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized

 

 

 

Series A Cumulative Convertible Preferred Shares, $0.01 par value, 12,950,000 shares authorized; 12,879,475 shares issued and outstanding, liquidation value of $328,266, at December 31, 2023 and 2022

 

366,936

 

 

 

366,936

 

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 155,297,829 and 162,003,533 shares issued and outstanding at December 31, 2023 and 2022, respectively

 

1,553

 

 

 

1,620

 

Additional paid-in capital

 

3,000,894

 

 

 

3,054,958

 

Accumulated other comprehensive income

 

22,662

 

 

 

40,591

 

Distributions in excess of net earnings

 

(1,055,183

)

 

 

(1,049,441

)

Total shareholders’ equity

 

2,336,862

 

 

 

2,414,664

 

Noncontrolling interest:

 

 

 

Noncontrolling interest in consolidated joint ventures

 

7,634

 

 

 

7,669

 

Noncontrolling interest in the Operating Partnership

 

6,294

 

 

 

6,313

 

Total noncontrolling interest

 

13,928

 

 

 

13,982

 

Total equity

 

2,350,790

 

 

 

2,428,646

 

Total liabilities and equity

$

4,919,295

 

 

$

4,978,225

 

Note:

The corresponding notes to the consolidated financial statements can be found in the Company’s Annual Report on Form 10-K.

RLJ Lodging Trust

Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(unaudited)

       

 

For the three months ended
December 31,

 

For the year ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues

 

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

 

Room revenue

$

261,612

 

 

$

248,636

 

 

$

1,095,028

 

 

$

1,002,454

 

Food and beverage revenue

 

36,024

 

 

 

34,372

 

 

 

141,625

 

 

 

117,027

 

Other revenue

 

22,072

 

 

 

19,183

 

 

 

88,924

 

 

 

74,181

 

Total revenues

 

319,708

 

 

 

302,191

 

 

 

1,325,577

 

 

 

1,193,662

 

Expenses

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Room expense

 

69,396

 

 

 

65,426

 

 

 

277,058

 

 

 

253,441

 

Food and beverage expense

 

28,103

 

 

 

26,088

 

 

 

109,707

 

 

 

87,402

 

Management and franchise fee expense

 

24,863

 

 

 

23,719

 

 

 

107,417

 

 

 

95,565

 

Other operating expenses

 

85,918

 

 

 

80,437

 

 

 

340,485

 

 

 

308,000

 

Total property operating expenses

 

208,280

 

 

 

195,670

 

 

 

834,667

 

 

 

744,408

 

Depreciation and amortization

 

44,455

 

 

 

44,529

 

 

 

179,103

 

 

 

184,875

 

Property tax, insurance and other

 

23,961

 

 

 

20,790

 

 

 

100,229

 

 

 

86,996

 

General and administrative

 

15,968

 

 

 

15,402

 

 

 

58,998

 

 

 

56,330

 

Transaction costs

 

197

 

 

 

230

 

 

 

223

 

 

 

(345

)

Total operating expenses

 

292,861

 

 

 

276,621

 

 

 

1,173,220

 

 

 

1,072,264

 

Other income (expense), net

 

858

 

 

 

780

 

 

 

4,364

 

 

 

9,496

 

Interest income

 

5,766

 

 

 

2,759

 

 

 

19,743

 

 

 

4,559

 

Interest expense

 

(25,301

)

 

 

(22,114

)

 

 

(98,807

)

 

 

(93,155

)

(Loss) gain on sale of hotel properties, net

 

(6

)

 

 

21

 

 

 

(34

)

 

 

1,017

 

(Loss) on extinguishment of indebtedness, net

 

 

 

 

(39

)

 

 

(169

)

 

 

(39

)

Income before equity in income from unconsolidated joint ventures

 

8,164

 

 

 

6,977

 

 

 

77,454

 

 

 

43,276

 

Equity in income from unconsolidated joint ventures

 

104

 

 

 

202

 

 

 

419

 

 

 

457

 

Income before income tax expense

 

8,268

 

 

 

7,179

 

 

 

77,873

 

 

 

43,733

 

Income tax expense

 

(228

)

 

 

(379

)

 

 

(1,256

)

 

 

(1,518

)

Net income

 

8,040

 

 

 

6,800

 

 

 

76,617

 

 

 

42,215

 

Net (income) loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

Noncontrolling interest in consolidated joint ventures

 

(96

)

 

 

(181

)

 

 

35

 

 

 

(210

)

Noncontrolling interest in the Operating Partnership

 

(9

)

 

 

(6

)

 

 

(247

)

 

 

(80

)

Net income attributable to RLJ

 

7,935

 

 

 

6,613

 

 

 

76,405

 

 

 

41,925

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(25,115

)

 

 

(25,115

)

Net income attributable to common shareholders

$

1,656

 

 

$

334

 

 

$

51,290

 

 

$

16,810

 

Basic per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders

$

0.01

 

 

$

 

 

$

0.32

 

 

$

0.10

 

Weighted-average number of common shares

 

153,326,317

 

 

 

159,769,645

 

 

 

155,928,663

 

 

 

161,947,807

 

Diluted per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders

$

0.01

 

 

$

 

 

$

0.32

 

 

$

0.10

 

Weighted-average number of common shares

 

154,406,530

 

 

 

160,327,264

 

 

 

156,556,414

 

 

 

162,292,865

 

Note:

The Statements of Comprehensive Income and corresponding notes to the consolidated financial statements can be found in the Company’s Annual Report on Form 10-K.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

 

Funds From Operations (FFO) Attributable to Common Shareholders and Unitholders

       

 

For the three months ended
December 31,

 

For the year ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income

$

8,040

 

 

$

6,800

 

 

$

76,617

 

 

$

42,215

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(25,115

)

 

 

(25,115

)

Depreciation and amortization

 

44,455

 

 

 

44,529

 

 

 

179,103

 

 

 

184,875

 

Loss (gain) on sale of hotel properties, net

 

6

 

 

 

(21

)

 

 

34

 

 

 

(1,017

)

Noncontrolling interest in consolidated joint ventures

 

(96

)

 

 

(181

)

 

 

35

 

 

 

(210

)

Adjustments related to consolidated joint venture (1)

 

(45

)

 

 

(43

)

 

 

(175

)

 

 

(187

)

Adjustments related to unconsolidated joint venture (2)

 

232

 

 

 

239

 

 

 

941

 

 

 

1,070

 

FFO

 

46,313

 

 

 

45,044

 

 

 

231,440

 

 

 

201,631

 

Transaction costs

 

197

 

 

 

230

 

 

 

223

 

 

 

(345

)

Pre-opening costs (3)

 

163

 

 

 

738

 

 

 

1,351

 

 

 

2,258

 

Loss on extinguishment of indebtedness, net

 

 

 

 

39

 

 

 

169

 

 

 

39

 

Amortization of share-based compensation

 

6,258

 

 

 

5,590

 

 

 

24,285

 

 

 

21,664

 

Non-cash income tax benefit

 

(5

)

 

 

(17

)

 

 

(5

)

 

 

(17

)

Non-cash interest expense related to discontinued interest rate hedges

 

482

 

 

 

178

 

 

 

1,929

 

 

 

680

 

Derivative gains in accumulated other comprehensive income reclassified to earnings (4)

 

 

 

 

 

 

 

 

 

 

(5,866

)

Other (income) expenses (5)

 

(30

)

 

 

1,011

 

 

 

996

 

 

 

1,067

 

Adjusted FFO

$

53,378

 

 

$

52,813

 

 

$

260,388

 

 

$

221,111

 

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit-basic

$

0.35

 

 

$

0.33

 

 

$

1.66

 

 

$

1.36

 

Adjusted FFO per common share and unit-diluted

$

0.34

 

 

$

0.33

 

 

$

1.66

 

 

$

1.36

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares and units outstanding (6)

 

154,098

 

 

 

160,541

 

 

 

156,700

 

 

 

162,720

 

Diluted weighted-average common shares and units outstanding (6)

 

155,178

 

 

 

161,099

 

 

 

157,328

 

 

 

163,065

 

Note:

(1) Includes depreciation and amortization expense, impairment loss and loss on sale of hotel allocated to the noncontrolling interest in the consolidated joint ventures.

(2) Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint ventures.

(3) Represents expenses related to the brand conversions of certain hotel properties prior to opening.

(4) Reclassification of interest rate swap gains from accumulated other comprehensive income to earnings for discontinued interest rate hedges.

(5) Represents expenses and income outside of the normal course of operations. For the year ended December 31, 2023, other expenses included one-time management company transition costs of $0.6 million.

(6) Includes 0.8 million weighted-average operating partnership units for the three months and year ended December 31, 2023 and 2022.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

 

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

       

 

For the three months
ended December 31,

 

For the year ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income

$

8,040

 

 

$

6,800

 

 

$

76,617

 

 

$

42,215

 

Depreciation and amortization

 

44,455

 

 

 

44,529

 

 

 

179,103

 

 

 

184,875

 

Interest expense, net of interest income

 

19,535

 

 

 

19,355

 

 

 

79,064

 

 

 

88,596

 

Income tax expense

 

228

 

 

 

379

 

 

 

1,256

 

 

 

1,518

 

Adjustments related to unconsolidated joint venture (1)

 

340

 

 

 

351

 

 

 

1,374

 

 

 

1,519

 

EBITDA

 

72,598

 

 

 

71,414

 

 

 

337,414

 

 

 

318,723

 

Loss (gain) on sale of hotel properties, net

 

6

 

 

 

(21

)

 

 

34

 

 

 

(1,017

)

EBITDAre

 

72,604

 

 

 

71,393

 

 

 

337,448

 

 

 

317,706

 

Transaction costs

 

197

 

 

 

230

 

 

 

223

 

 

 

(345

)

Pre-opening costs (2)

 

163

 

 

 

738

 

 

 

1,351

 

 

 

2,258

 

Loss on extinguishment of indebtedness, net

 

 

 

 

39

 

 

 

169

 

 

 

39

 

Amortization of share-based compensation

 

6,258

 

 

 

5,590

 

 

 

24,285

 

 

 

21,664

 

Derivative gains in accumulated other comprehensive income reclassified to earnings (3)

 

 

 

 

 

 

 

 

 

 

(5,866

)

Other expenses (4)

 

(30

)

 

 

1,011

 

 

 

996

 

 

 

1,067

 

Adjusted EBITDA

 

79,192

 

 

 

79,001

 

 

 

364,472

 

 

 

336,523

 

General and administrative

 

9,710

 

 

 

9,812

 

 

 

34,713

 

 

 

34,666

 

Other corporate adjustments

 

1,022

 

 

 

(568

)

 

 

3,031

 

 

 

(569

)

Consolidated Hotel EBITDA

 

89,924

 

 

 

88,245

 

 

 

402,216

 

 

 

370,620

 

Comparable adjustments - income from sold hotels

 

(309

)

 

 

(676

)

 

 

(813

)

 

 

(1,186

)

Comparable adjustments - income from acquired hotel

 

 

 

 

 

 

 

 

 

 

558

 

Comparable Hotel EBITDA

$

89,615

 

 

$

87,569

 

 

$

401,403

 

 

$

369,992

 

Notes: Comparable statistics reflect the Company's 96 hotel portfolio owned as of December 31, 2023.

(1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint venture.

(2) Represents expenses related to the brand conversions of certain hotel properties prior to opening.

(3) Reclassification of interest rate swap gains from accumulated other comprehensive income to earnings for discontinued interest rate hedges.

(4) Represents expenses and income outside of the normal course of operations. For the year ended December 31, 2023, other expenses included one-time management company transition costs of $0.6 million.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands except margin data)

(unaudited)

 

Comparable Hotel EBITDA Margin

       

 

For the three months ended
December 31,

 

For the year ended
December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Total revenue

$

319,708

 

 

$

302,191

 

 

$

1,325,577

 

 

$

1,193,662

 

Comparable adjustments - revenue from sold hotels

 

(215

)

 

 

 

 

 

(250

)

 

 

(2,337

)

Comparable adjustments - revenue from prior ownership of acquired hotels

 

 

 

 

 

 

 

 

 

 

5,585

 

Other corporate adjustments / non-hotel revenue

 

(18

)

 

 

(15

)

 

 

(70

)

 

 

(60

)

Comparable Hotel Revenue

$

319,475

 

 

$

302,176

 

 

$

1,325,257

 

 

$

1,196,850

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA

$

89,615

 

 

$

87,569

 

 

$

401,403

 

 

$

369,992

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA Margin

 

28.1

%

 

 

29.0

%

 

 

30.3

%

 

 

30.9

%

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands except interest rate data)

(unaudited)

             

Loan

Base Term
(Years)

Maturity (incl.
extensions)

Floating /
Fixed (1)

Interest Rate (2)

 

Balance as of
December 31, 2023

Mortgage Debt

 

 

 

 

 

 

Mortgage loan - 1 hotel

10

Jan 2029

Fixed

5.06%

 

$

25,000

Mortgage loan - 7 hotels

3

Apr 2024

Floating

5.94%

 

 

200,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating

5.10%

 

 

96,000

Mortgage loan - 4 hotels

5

Apr 2026

Floating

5.67%

 

 

85,000

Weighted Average / Mortgage Total

 

 

 

5.63%

 

$

406,000

 

 

 

 

 

 

 

Corporate Debt

 

 

 

 

 

 

Revolver (3)

4

May 2028

Floating

 

$

$225 Million Term Loan

3

May 2028

Floating

3.03%

 

 

225,000

$200 Million Term Loan

3

January 2028

Floating

4.88%

 

 

200,000

$400 Million Term Loan

5

May 2025

Floating

3.44%

 

 

400,000

$500 Million Senior Notes due 2026

5

July 2026

Fixed

3.75%

 

 

500,000

$500 Million Senior Notes due 2029

8

September 2029

Fixed

4.00%

 

 

500,000

Weighted Average / Corporate Total

 

 

 

3.79%

 

$

1,825,000

 

 

 

 

 

 

 

Weighted-Average / Gross Debt

 

 

 

4.12%

 

$

2,231,000

Notes:

(1) The floating interest rate is hedged, or partially hedged, with an interest rate swap.

(2) Interest rates as of December 31, 2023, inclusive of the impact of interest rate hedges.

(3) As of December 31, 2023, there was $600.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually.

 

Sean M. Mahoney, Executive Vice President and Chief Financial Officer – (301) 280-7774

Source: RLJ Lodging Trust