RLJ Lodging Trust Reports Second Quarter 2023 Results

August 3, 2023

– Q2 RevPAR increased 4.5% over last year
– Announced 25% increase in quarterly dividends
– Nashville property joined the Tapestry Collection by Hilton
– Continued share repurchases

BETHESDA, Md.--(BUSINESS WIRE)--Aug. 3, 2023-- RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and six months ended June 30, 2023.

Second Quarter Highlights

  • Portfolio Comparable RevPAR of $152.89; an increase of 4.5% from last year
  • Total revenue of $357.0 million
  • Net income of $41.7 million
  • Net income per diluted share attributable to common shareholders of $0.22
  • Comparable Hotel EBITDA of $122.8 million
  • Adjusted EBITDA of $113.8 million
  • Adjusted FFO per diluted common share and unit of $0.56
  • Recast $600.0 million senior unsecured revolving credit facility, extending maturity to May 2027
  • Entered into a new $225.0 million senior unsecured term loan, maturing May 2026
  • Repurchased 2.5 million common shares for approximately $25.5 million at an average price per share of $10.23

“We were pleased with our second quarter results as our portfolio once again achieved RevPAR growth ahead of the industry. Our results continued to benefit from our urban-centric portfolio which saw ongoing improvement in corporate demand, strength in urban leisure travel, continued strong production in group, and rising inbound international demand, all of which provided the momentum that drove our RevPAR growth,” commented Leslie D. Hale, President and Chief Executive Officer. “We are successfully executing on our strategy to unlock significant incremental value embedded within our portfolio with our Nashville hotel joining the Tapestry Collection by Hilton, in addition to the ramping of our recently completed conversions. We are also demonstrating our ability to execute on the optionality of our strong balance sheet by repurchasing our shares, increasing our quarterly dividend by 25% and deploying capital towards our current year conversions."

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 thousands, except ADR, RevPAR, and per share amounts)

(unaudited)
     

 

For the three months ended June 30,

For the six months ended June 30,

 

2023

2022

2023

2022

Operational Overview: (1)

 

 

 

 

Comparable ADR

$203.53

$196.09

$201.41

$187.03

Comparable Occupancy

75.1%

74.6%

71.9%

67.9%

Comparable RevPAR

$152.89

$146.37

$144.72

$127.01

 

 

 

 

 

Financial Overview:

 

 

 

 

Total Revenues

$356,960

$330,501

$671,463

$573,400

Comparable Hotel Revenue

$356,904

$333,491

$671,392

$576,001

 

 

 

 

 

Net Income

$41,720

$33,202

$52,234

$17,732

 

 

 

 

 

Comparable Hotel EBITDA (2)

$122,797

$119,152

$213,723

$182,403

Comparable Hotel EBITDA Margin

34.4%

35.7%

31.8%

31.7%

Adjusted EBITDA

$113,829

$110,978

$196,513

$165,570

 

 

 

 

 

Adjusted FFO

$87,836

$80,999

$143,916

$104,892

Adjusted FFO Per Diluted Common Share and Unit

$0.56

$0.49

$0.90

$0.64

Note:

(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of June 30, 2023.

(2) Comparable Hotel EBITDA for the three months ended June 30, 2023 and 2022 excludes $0.2 million and $0.1 million net income, respectively, from sold hotels. Comparable Hotel EBITDA for the six months ended June 30, 2023 and 2022 excludes $0.4 million and $0.3 million net income, respectively, from sold hotels. Comparable Hotel EBITDA for the three months ended June 30, 2022 includes $0.6 million net income from acquired hotels. Comparable Hotel EBITDA for the six months ended June 30, 2022 includes $0.7 million net income from acquired hotels.

Operational Update

During the second quarter, the Company’s portfolio generated Comparable RevPAR of $152.89, an increase of 4.5% from the comparable period in 2022 and achieved 96.4% of the comparable period in 2019. ADR during the second quarter of 2023 increased by 3.8% compared to the comparable period in 2022, achieving 106.5% of the comparable period in 2019. The Company’s performance during the second quarter was positively impacted by continued strength in ADR across the portfolio and sustained improvement in urban markets.

Conversions

As previously announced, the Company's Nashville property joined the Tapestry Collection by Hilton. This marks the Company’s third conversion in 2023, joining previously announced conversions in New Orleans and Houston, and building on its three successful 2022 completed conversions. The affiliation with the Tapestry Collection allows this outstanding lifestyle boutique hotel to fully unlock its potential by immediately leveraging Hilton’s extensive Hilton Honors system. The 124-room property will undergo a comprehensive renovation next year and relaunch as a rebranded lifestyle boutique hotel within the Tapestry Collection by Hilton.

Share Repurchases

During the second quarter the Company repurchased 2.5 million common shares for approximately $25.5 million at an average price per share of $10.23. Additionally, year-to-date through June 30, 2023, the Company has repurchased approximately 5.2 million common shares for approximately $52.9 million, at an average price per share of $10.23. As of August 3, 2023, the 2023 Share Repurchase Program had a remaining capacity of $235.0 million.

Balance Sheet

As of June 30, 2023, the Company had approximately $1.1 billion of total liquidity, comprising approximately $476.9 million of unrestricted cash and $600.0 million available under its revolving credit facility ("Revolver"), and $2.2 billion of debt outstanding, 93.0% of which is currently either fixed or hedged.

During the second quarter, the Company amended its $600.0 million Revolver, extending the maturity of the Revolver to May 2027 with the option to extend up to one additional year. Additionally, the Company entered into a new $225.0 million senior unsecured term loan maturing May 2026, with two, one-year extension options to May 2028. The proceeds from the new term loan were used to repay two term loans maturing in January 2024. In addition, all of the Company's unsecured credit agreements were amended to modify the calculation of certain financial covenants, creating more flexibility.

The Company remained active in managing interest rate risk and executed $250.0 million in interest rate swaps in May, with a weighted average rate of 2.88%.

Dividends

The Company’s Board of Trustees declared a second quarter cash dividend of $0.08 per common share of beneficial interest of the Company. The dividend was paid on July 17, 2023 to shareholders of record as of June 30, 2023. The Company’s Board of Trustees also declared an increase in its quarterly cash dividend to $0.10 per common share of beneficial interest of the Company for the third quarter of 2023, which represents a 25% increase from the prior quarter dividend. The dividend will be paid on October 17, 2023 to shareholders of record as of September 30, 2023.

The Company's Board of Trustees declared a second quarter cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on July 31, 2023 to shareholders of record as of June 30, 2023. The Company's Board of Trustees recently declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend will be paid on October 31, 2023 to shareholders of record as of September 30, 2023.

Q3 2023 Outlook

Based on current trends and assuming no material disruptions to travel caused by pandemics or worsening macro-economic conditions, the Company's third quarter 2023 outlook is as follows:

 

Q3 2023

Comparable RevPAR

$137.00 to $143.00

Comparable Hotel EBITDA

$94.0M to $104.0M

Adjusted EBITDA

$85.0M to $95.0M

Adjusted FFO per diluted share

$0.37 to $0.44

No future acquisitions, dispositions, financings, or share repurchases are incorporated into the Company's outlook 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 August 4, 2023 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 second 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, 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 and the Company's Quarterly Reports on Form 10-Q, 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) income tax expense; 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 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 hotels

For the three and six months ended June 30, 2022 and 2023, Comparable adjustments included the following acquired hotel:

  • 21c Hotel Nashville acquired in July 2022

Comparable adjustments: Sold hotels

For the three and six months ended June 30, 2022 and 2023, 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)
       

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Investment in hotel properties, net

$

4,150,176

 

 

$

4,180,328

 

Investment in unconsolidated joint ventures

 

7,480

 

 

 

6,979

 

Cash and cash equivalents

 

476,936

 

 

 

481,316

 

Restricted cash reserves

 

34,396

 

 

 

55,070

 

Hotel and other receivables, net of allowance of $291 and $319, respectively

 

41,748

 

 

 

38,528

 

Lease right-of-use assets

 

139,163

 

 

 

136,915

 

Prepaid expense and other assets

 

82,601

 

 

 

79,089

 

Total assets

$

4,932,500

 

 

$

4,978,225

 

Liabilities and Equity

 

 

 

Debt, net

$

2,218,737

 

 

$

2,217,555

 

Accounts payable and other liabilities

 

126,901

 

 

 

155,916

 

Advance deposits and deferred revenue

 

25,042

 

 

 

23,769

 

Lease liabilities

 

120,376

 

 

 

117,010

 

Accrued interest

 

22,067

 

 

 

20,707

 

Distributions payable

 

19,292

 

 

 

14,622

 

Total liabilities

 

2,532,415

 

 

 

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 June 30, 2023 and December 31, 2022

 

366,936

 

 

 

366,936

 

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 157,686,191 and 162,003,533 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

1,577

 

 

 

1,620

 

Additional paid-in capital

 

3,011,350

 

 

 

3,054,958

 

Distributions in excess of net earnings

 

(1,035,566

)

 

 

(1,049,441

)

Accumulated other comprehensive income

 

41,733

 

 

 

40,591

 

Total shareholders’ equity

 

2,386,030

 

 

 

2,414,664

 

Noncontrolling interests:

 

 

 

Noncontrolling interest in the Operating Partnership

 

6,380

 

 

 

6,313

 

Noncontrolling interest in consolidated joint ventures

 

7,675

 

 

 

7,669

 

Total noncontrolling interest

 

14,055

 

 

 

13,982

 

Total equity

 

2,400,085

 

 

 

2,428,646

 

Total liabilities and equity

$

4,932,500

 

 

$

4,978,225

 
               

Note: The corresponding notes to the consolidated financial statements can be found in the Company’s Quarterly Report on Form 10-Q.

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)
       

 

For the three months ended June 30,

 

For the six months ended June 30,

 

2023

 

2022

 

2023

 

2022

Revenues

 

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

 

Room revenue

$

295,496

 

 

$

280,676

 

 

$

556,328

 

 

$

486,455

 

Food and beverage revenue

 

38,132

 

 

 

31,154

 

 

 

71,420

 

 

 

52,055

 

Other revenue

 

23,332

 

 

 

18,671

 

 

 

43,715

 

 

 

34,890

 

Total revenues

 

356,960

 

 

 

330,501

 

 

 

671,463

 

 

 

573,400

 

Expenses

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Room expense

 

70,333

 

 

 

65,793

 

 

 

136,384

 

 

 

119,621

 

Food and beverage expense

 

28,037

 

 

 

21,770

 

 

 

54,174

 

 

 

37,939

 

Management and franchise fee expense

 

29,277

 

 

 

26,067

 

 

 

55,459

 

 

 

46,456

 

Other operating expenses

 

84,207

 

 

 

76,888

 

 

 

166,831

 

 

 

145,542

 

Total property operating expenses

 

211,854

 

 

 

190,518

 

 

 

412,848

 

 

 

349,558

 

Depreciation and amortization

 

44,925

 

 

 

46,922

 

 

 

89,921

 

 

 

93,787

 

Property tax, insurance and other

 

24,684

 

 

 

22,949

 

 

 

49,332

 

 

 

45,462

 

General and administrative

 

14,627

 

 

 

13,348

 

 

 

28,283

 

 

 

27,482

 

Transaction costs

 

4

 

 

 

136

 

 

 

24

 

 

 

198

 

Total operating expenses

 

296,094

 

 

 

273,873

 

 

 

580,408

 

 

 

516,487

 

Other income, net

 

736

 

 

 

721

 

 

 

1,585

 

 

 

8,006

 

Interest income

 

5,011

 

 

 

347

 

 

 

8,675

 

 

 

519

 

Interest expense

 

(24,543

)

 

 

(23,855

)

 

 

(48,673

)

 

 

(48,416

)

(Loss) gain on sale of hotel properties, net

 

(44

)

 

 

(364

)

 

 

(44

)

 

 

1,053

 

Loss on extinguishment of indebtedness, net

 

(169

)

 

 

—

 

 

 

(169

)

 

 

—

 

Income before equity in income from unconsolidated joint ventures

 

41,857

 

 

 

33,477

 

 

 

52,429

 

 

 

18,075

 

Equity in income from unconsolidated joint ventures

 

220

 

 

 

283

 

 

 

501

 

 

 

405

 

Income before income tax expense

 

42,077

 

 

 

33,760

 

 

 

52,930

 

 

 

18,480

 

Income tax expense

 

(357

)

 

 

(558

)

 

 

(696

)

 

 

(748

)

Net income

 

41,720

 

 

 

33,202

 

 

 

52,234

 

 

 

17,732

 

Net (income) loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

Noncontrolling interest in the Operating Partnership

 

(171

)

 

 

(125

)

 

 

(188

)

 

 

(21

)

Noncontrolling interest in consolidated joint ventures

 

(154

)

 

 

(111

)

 

 

(6

)

 

 

7

 

Net income attributable to RLJ

 

41,395

 

 

 

32,966

 

 

 

52,040

 

 

 

17,718

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(12,557

)

 

 

(12,557

)

Net income attributable to common shareholders

$

35,116

 

 

$

26,687

 

 

$

39,483

 

 

$

5,161

 

Basic per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders - basic

$

0.22

 

 

$

0.16

 

 

$

0.25

 

 

$

0.03

 

Weighted-average number of common shares

 

156,424,444

 

 

 

163,539,446

 

 

 

157,945,406

 

 

 

163,857,785

 

Diluted per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders - diluted

$

0.22

 

 

$

0.16

 

 

$

0.25

 

 

$

0.03

 

Weighted-average number of common shares

 

156,741,187

 

 

 

163,784,573

 

 

 

158,381,380

 

 

 

164,217,150

 
                               

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

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 June 30,

For the six months ended June 30,

 

2023

 

2022

2023

 

2022

Net income

$

41,720

 

 

$

33,202

 

$

52,234

 

 

$

17,732

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

(12,557

)

 

 

(12,557

)

Depreciation and amortization

 

44,925

 

 

 

46,922

 

 

89,921

 

 

 

93,787

 

Loss (gain) on sale of hotel properties, net

 

44

 

 

 

364

 

 

44

 

 

 

(1,053

)

Noncontrolling interest in consolidated joint ventures

 

(154

)

 

 

(111

)

 

(6

)

 

 

7

 

Adjustments related to consolidated joint venture (1)

 

(44

)

 

 

(49

)

 

(87

)

 

 

(98

)

Adjustments related to unconsolidated joint venture (2)

 

236

 

 

 

295

 

 

473

 

 

 

590

 

FFO

 

80,448

 

 

 

74,344

 

 

130,022

 

 

 

98,408

 

Transaction costs

 

4

 

 

 

136

 

 

24

 

 

 

198

 

Pre-opening costs (3)

 

639

 

 

 

378

 

 

860

 

 

 

612

 

Loss on extinguishment of indebtedness, net

 

169

 

 

 

—

 

 

169

 

 

 

—

 

Amortization of share-based compensation

 

6,089

 

 

 

5,470

 

 

11,781

 

 

 

10,654

 

Non-cash income tax expense

 

—

 

 

 

135

 

 

—

 

 

 

—

 

Non-cash interest expense related to discontinued interest rate hedges

 

482

 

 

 

285

 

 

964

 

 

 

241

 

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

 

—

 

 

 

—

 

 

—

 

 

 

(5,866

)

Other expenses (5)

 

5

 

 

 

251

 

 

96

 

 

 

645

 

Adjusted FFO

$

87,836

 

 

$

80,999

 

$

143,916

 

 

$

104,892

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit-basic

$

0.56

 

 

$

0.49

 

$

0.91

 

 

$

0.64

 

Adjusted FFO per common share and unit-diluted

$

0.56

 

 

$

0.49

 

$

0.90

 

 

$

0.64

 

 

 

 

 

 

 

 

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

 

157,196

 

 

 

164,311

 

 

158,717

 

 

 

164,630

 

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

 

157,513

 

 

 

164,556

 

 

159,153

 

 

 

164,989

 

Notes:

(1)

  

Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint venture.

(2)

  

Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint venture.

(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.

(6)

  

Includes 0.8 million weighted-average operating partnership units for the three and six month periods ended June 30, 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 June 30,

For the six months ended June 30,

 

2023

 

2022

2023

 

2022

Net income

$

41,720

 

 

$

33,202

 

$

52,234

 

 

$

17,732

 

Depreciation and amortization

 

44,925

 

 

 

46,922

 

 

89,921

 

 

 

93,787

 

Interest expense, net of interest income

 

19,532

 

 

 

23,508

 

 

39,998

 

 

 

47,897

 

Income tax expense

 

357

 

 

 

558

 

 

696

 

 

 

748

 

Adjustments related to unconsolidated joint venture (1)

 

345

 

 

 

408

 

 

690

 

 

 

815

 

EBITDA

 

106,879

 

 

 

104,598

 

 

183,539

 

 

 

160,979

 

Loss (gain) on sale of hotel properties, net

 

44

 

 

 

364

 

 

44

 

 

 

(1,053

)

EBITDAre

 

106,923

 

 

 

104,962

 

 

183,583

 

 

 

159,926

 

Transaction costs

 

4

 

 

 

136

 

 

24

 

 

 

198

 

Pre-opening costs (2)

 

639

 

 

 

378

 

 

860

 

 

 

612

 

Loss on extinguishment of indebtedness, net

 

169

 

 

 

—

 

 

169

 

 

 

—

 

Amortization of share-based compensation

 

6,089

 

 

 

5,470

 

 

11,781

 

 

 

10,654

 

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

 

—

 

 

 

—

 

 

—

 

 

 

(5,866

)

Other expenses (4)

 

5

 

 

 

32

 

 

96

 

 

 

46

 

Adjusted EBITDA

 

113,829

 

 

 

110,978

 

 

196,513

 

 

 

165,570

 

General and administrative

 

8,538

 

 

 

7,878

 

 

16,502

 

 

 

16,828

 

Other corporate adjustments

 

666

 

 

 

(194

)

 

1,137

 

 

 

(359

)

Consolidated Hotel EBITDA

 

123,033

 

 

 

118,662

 

 

214,152

 

 

 

182,039

 

Comparable adjustments - income from sold hotels

 

(236

)

 

 

(106

)

 

(429

)

 

 

(297

)

Comparable adjustments - income from acquired hotels

 

—

 

 

 

596

 

 

—

 

 

 

661

 

Comparable Hotel EBITDA

$

122,797

 

 

$

119,152

 

$

213,723

 

 

$

182,403

 

Notes: Comparable statistics reflect the Company's 96 hotel portfolio owned as of June 30, 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.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands except %)

(unaudited)
       

Comparable Hotel EBITDA Margin

      

 

For the three months ended June 30,

 

For the six months ended June 30,

 

2023

 

2022

 

2023

 

2022

Total revenue

$

356,960

 

 

$

330,501

 

 

$

671,463

 

 

$

573,400

 

Comparable adjustments - revenue from sold hotels

 

(35

)

 

 

(117

)

 

 

(35

)

 

 

(2,337

)

Comparable adjustments - revenue from prior ownership of acquired hotels

 

—

 

 

 

3,124

 

 

 

—

 

 

 

4,970

 

Other corporate adjustments / non-hotel revenue

 

(21

)

 

 

(17

)

 

 

(36

)

 

 

(32

)

Comparable Hotel Revenue

$

356,904

 

 

$

333,491

 

 

$

671,392

 

 

$

576,001

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA

$

122,797

 

 

$

119,152

 

 

$

213,723

 

 

$

182,403

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA Margin

 

34.4

%

 

 

35.7

%

 

 

31.8

%

 

 

31.7

%

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands except %)

(unaudited)
             

Loan

Base Term (Years)

Maturity

(incl. extensions)

Floating / Fixed (1)

Interest Rate (2)

 

Balance as of

June 30, 2023 (3)

Mortgage Debt

 

 

 

 

 

 

Mortgage loan - 1 hotel

10

Jan 2029

Fixed

5.06

%

 

$

25,000

Mortgage loan - 7 hotels (4)

3

Apr 2024

Floating

5.94

%

 

 

200,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating

4.95

%

 

 

96,000

Mortgage loan - 4 hotels

5

Apr 2026

Floating

5.51

%

 

 

85,000

Weighted Average / Mortgage Total

 

 

 

5.56

%

 

$

406,000

 

 

 

 

 

 

 

Corporate Debt

 

 

 

 

 

 

Revolver (5)

4

May 2028

Floating

—

 

 

$

—

$225 Million Term Loan Maturing 2026

3

May 2028

Floating

3.02

%

 

 

225,000

$200 Million Term Loan Maturing 2026

3

January 2028

Floating

3.50

%

 

 

200,000

$400 Million Term Loan Maturing 2025

5

May 2025

Floating

3.43

%

 

 

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

 

 

 

3.63

%

 

$

1,825,000

 

 

 

 

 

 

 

Weighted Average / Total

 

 

 

3.98

%

 

$

2,231,000

Notes:

(1)

  

The floating interest rate is hedged with an interest rate swap.

(2)

  

Interest rates as of June 30, 2023, inclusive of the impact of interest rate hedges.

(3)

  

Excludes the impact of fair value adjustments and deferred financing costs.

(4)

  

In April 2023 the Company exercised the right to a one-year extension on this loan.

(5)

  

As of June 30, 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