UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2016
RLJ LODGING TRUST
(Exact name of registrant as specified in its charter)
Maryland | 001-35169 | 27-4706509 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||
3 Bethesda Metro Center Suite 1000 Bethesda, MD | 20814 | |
(Address of principal executive offices) | (Zip Code) | |
(301) 280-7777
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On May 4, 2016, RLJ Lodging Trust (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2016 and 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The following exhibits are filed as part of this report:
Exhibit Number | Description | ||
99.1 | Press release dated May 4, 2016, issued by RLJ Lodging Trust, providing financial results for the quarter ended March 31, 2016. | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RLJ LODGING TRUST | ||
Dated: May 4, 2016 | By: | /s/ Thomas J. Baltimore, Jr. |
Thomas J. Baltimore, Jr. | ||
President, Chief Executive Officer and Trustee | ||
EXHIBIT LIST
Exhibit Number | Description | ||
99.1 | Press release dated May 4, 2016, issued by RLJ Lodging Trust, providing financial results for the quarter ended March 31, 2016. | ||
Press Release
RLJ Lodging Trust Reports First Quarter 2016 Results
- Completed a comprehensive $1.0 billion refinancing
- Repurchased 0.5 million common shares for $11.3 million
- Pro forma RevPAR increased 2.1%
Bethesda, MD, May 4, 2016 – RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months ended March 31, 2016.
Highlights
• | Pro forma RevPAR increased 2.1%, Pro forma ADR increased 2.1%, and Pro forma Occupancy increased 0.1% |
• | Pro forma Hotel EBITDA Margin increased 35 basis points to 33.6% |
• | Pro forma Consolidated Hotel EBITDA increased 7.3% to $92.4 million |
• | Adjusted FFO increased 5.2% to $70.8 million |
• | Refinanced $233.5 million of secured debt; extended maturities to 2022 and 2023 |
• | Sold one non-strategic property |
• | Repurchased 0.5 million common shares for $11.3 million |
• | Subsequent to quarter end, refinanced $800.0 million of unsecured debt; extended maturities to 2021, improved pricing, and enhanced financial covenants |
“Our diversified portfolio and prudent capital allocation continue to yield positive results,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “In addition to another quarter of solid performance, we further bolstered our balance sheet by refinancing $1.0 billion of debt and also enhanced capital returns to our shareholders by continuing to repurchase shares. We remain optimistic about 2016 as we benefit from our shift towards higher growth markets and the ramp up of our recent conversions.”
Financial and Operating Results
Performance metrics such as Occupancy, Average Daily Rate (“ADR”), Revenue Per Available Room (“RevPAR”), Hotel EBITDA, and Hotel EBITDA Margin are Pro forma. The prefix “Pro forma” as defined by the Company, denotes operating results which include results for periods prior to its ownership. Pro forma RevPAR and Pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude hotels sold during the period and non-comparable hotels that were not open for operation or were closed for renovation for comparable periods. Explanations of EBITDA, Adjusted EBITDA, Hotel EBITDA, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included at the end of this release.
Pro forma RevPAR for the three months ended March 31, 2016, increased 2.1% over the comparable period in 2015, driven by a Pro forma ADR increase of 2.1%, and a Pro forma Occupancy increase of 0.1%. Excluding Chicago and Houston, which experienced softness in the
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quarter, Pro forma RevPAR growth was 3.9%. Two of the Company’s markets achieved double-digit RevPAR growth, including Northern California and Southern California, which experienced RevPAR growth of 28.7% and 11.9%, respectively.
Pro forma Hotel EBITDA Margin for the three months ended March 31, 2016, increased 35 basis points over the comparable period in 2015 to 33.6%. Excluding Chicago and Houston, Pro forma Hotel EBITDA Margin increased 82 basis points.
Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended March 31, 2016, Pro forma Consolidated Hotel EBITDA increased $6.3 million to $92.4 million, representing a 7.3% increase over the comparable period in 2015.
Adjusted EBITDA for the three months ended March 31, 2016, increased $4.9 million to $86.0 million, representing a 6.1% increase over the comparable period in 2015.
Adjusted FFO for the three months ended March 31, 2016, increased $3.5 million to $70.8 million, representing a 5.2% increase over the comparable period in 2015.
Adjusted FFO per diluted share and unit for the three months ended March 31, 2016, was $0.57 based on the Company’s diluted weighted-average common shares and units outstanding of 124.9 million.
Non-recurring items which were noteworthy for the three months ended March 31, 2016, included a non-cash deferred tax expense of $1.1 million and $0.7 million of other costs outside the normal course of operations.
Non-recurring items are included in net income attributable to common shareholders but are excluded from Adjusted EBITDA and Adjusted FFO, as applicable. A complete listing of non-recurring items is provided in the Non-GAAP reconciliation tables in this press release for the three months ended March 31, 2016 and 2015.
Net income attributable to common shareholders for the three months ended March 31, 2016, was $25.3 million, compared to $47.9 million for the comparable period in 2015.
Net cash flow from operating activities for the three months ended March 31, 2016, totaled $55.2 million, compared to $44.1 million for the comparable period in 2015.
Balance Sheet
During the three months ended March 31, 2016, the Company successfully refinanced $233.5 million of secured debt.
On March 16, 2016, the Company amended its $74.0 million cross-collateralized, first mortgage non-recourse loan secured by five properties. The transaction increased proceeds to $85.0 million, improved pricing, and extended the final maturity from 2017 to 2023, including extensions.
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On March 24, 2016, the Company amended and restated three first mortgage non-recourse loans secured by four properties totaling $148.5 million. The transaction improved pricing and extended the final maturity from 2020 to 2022, including extensions.
As of March 31, 2016, the Company had $126.0 million of unrestricted cash on its balance sheet, $300.0 million available on its Revolver, and $1.6 billion of debt outstanding. The Company’s ratio of net debt to Adjusted EBITDA, pro forma for recent acquisitions and dispositions, for the trailing twelve month period ended March 31, 2016, was 3.8 times.
Dividends
The Company’s Board of Trustees declared a cash dividend of $0.33 per common share of beneficial interest in the first quarter. The dividend was paid on April 15, 2016, to shareholders of record as of March 31, 2016.
Share Buyback
During the first quarter of 2016, the Company repurchased 0.5 million common shares for $11.3 million at an average price per share of $22.11. As of March 31, 2016, the Company's authorized share buyback program had a remaining capacity of $163.5 million.
Dispositions
On February 22, 2016, the Company sold the 62-room Holiday Inn Express Merrillville in Merrillville, IN for $2.9 million.
Subsequent Events
On April 22, 2016, the Company successfully refinanced $800.0 million of unsecured debt.
The Company amended and restated its $400.0 million 2013 Five-Year Term Loan. The transaction extended the final maturity from 2018 to 2021 and improved pricing by an average of 21 basis points.
The Company also amended and restated its $300.0 million Revolver. Including extensions, the transaction extended the final maturity from 2017 to 2021, increased the capacity to $400.0 million, and improved pricing by an average of 26 basis points.
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2016 Outlook
The Company’s outlook remains the same. The outlook excludes potential future acquisitions and dispositions, which could result in a material change to the Company’s outlook. The 2016 outlook is also based on a number of other assumptions, many of which are outside the Company’s control and all of which are subject to change.
Pro forma operating statistics include results for periods prior to the Company's ownership and therefore assumes the hotels were owned since January 1, 2015. Pro forma guidance removes income from hotels that have been sold.
For the full year 2016, the Company anticipates:
Current Outlook | |
Pro forma RevPAR growth (1) | 3.0% to 5.0% |
Pro forma Hotel EBITDA Margin (1) | 36.5% to 37.5% |
Pro forma Consolidated Hotel EBITDA | $425.0M to $450.0M |
Corporate Cash General & Administrative | $27.5M to $28.5M |
(1) Excludes non-comparable hotels. Properties closed for renovations are considered non-comparable and therefore are excluded for periods in which they are closed.
Earnings Call
The Company will conduct its quarterly analyst and investor conference call on May 5, 2016, 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 first quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://rljlodgingtrust.com. A replay of the conference call webcast will be archived and available online 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 focused on acquiring premium-branded, focused-service and compact full-service hotels. The Company owns 125 hotels with approximately 20,800 rooms, located in 21 states and the District of Columbia.
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Forward Looking Statements
The following 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,” 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 the Company’s actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty, increased direct competition, changes in government regulations or accounting rules, changes in local, national, and global real estate conditions, declines in the lodging industry, seasonality of the lodging industry, risks related to natural disasters, such as earthquakes and hurricanes, hostilities, including future terrorist attacks or fear of hostilities that affect travel, the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms, changes in interest rates, access to capital through offerings of the Company’s common and preferred shares of beneficial interest, or debt, the Company’s ability to identify suitable acquisitions, the Company’s ability to close on identified acquisitions and integrate those businesses, and inaccuracies of the Company’s accounting estimates. Given these uncertainties, undue reliance should not be placed on such 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, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the SEC.
###
Additional Contacts:
Leslie D. Hale, Chief Financial Officer, RLJ Lodging Trust – (301) 280-7774
For additional information or to receive press releases via email, please visit our website:
http://rljlodgingtrust.com
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RLJ Lodging Trust
Non-GAAP and Accounting Commentary
Non-Generally Accepted Accounting Principles (“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) Adjusted EBITDA, and (5) Hotel EBITDA. 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, Adjusted EBITDA, and Hotel EBITDA as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.
Funds From Operations (“FFO”)
The Company calculates 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 instead have 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 are redeemable 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.
Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”)
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. 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) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions. The Company presents EBITDA attributable to common shareholders, which includes OP units, because the OP units
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are redeemable for common shares of the Company. The Company believes it is meaningful for the investor to understand EBITDA attributable to all common shares and OP units.
Hotel EBITDA
With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and 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.
Pro forma Consolidated Hotel EBITDA includes results for periods prior to ownership, includes non-comparable hotels which were not open for operation or were closed for renovations for comparable periods, and excludes sold hotels. Pro forma Hotel EBITDA excludes the results of non-comparable hotels.
Adjustments to FFO and EBITDA
The Company adjusts FFO and EBITDA for certain additional items, such as transaction and pursuit costs, the amortization of share based compensation, and certain other expenses that the Company considers outside the normal course of business or extraordinary. The Company believes that Adjusted FFO and Adjusted EBITDA provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income, FFO, and EBITDA, is beneficial to an investor’s understanding of its operating performance. The Company adjusts FFO and EBITDA for the following items, as applicable:
• | Transaction and Pursuit Costs: The Company excludes transaction and pursuit costs expensed during the period because it believes they do not reflect the underlying performance of the Company. |
• | Non-Cash Expenses: The Company excludes the effect of certain non-cash items because it believes they do not reflect the underlying performance of the Company. The Company has excluded the amortization of share based compensation, non-cash gain or loss on the disposal of assets, and certain non-cash income taxes. |
• | Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses because it believes they do not reflect the underlying performance of the Company. The Company has excluded property-related severance costs, debt modification costs, and debt extinguishment costs. |
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RLJ Lodging Trust
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
March 31, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Investment in hotel properties, net | $ | 3,643,206 | $ | 3,674,999 | |||
Cash and cash equivalents | 126,004 | 134,192 | |||||
Restricted cash reserves | 54,547 | 55,455 | |||||
Hotel and other receivables, net of allowance of $129 and $117, respectively | 31,007 | 25,755 | |||||
Deferred income tax asset | 48,847 | 49,978 | |||||
Prepaid expense and other assets | 36,727 | 32,563 | |||||
Total assets | $ | 3,940,338 | $ | 3,972,942 | |||
Liabilities and Equity | |||||||
Mortgage loans, net | $ | 415,546 | $ | 406,049 | |||
Term loans and revolving credit facility, net | 1,169,840 | 1,169,437 | |||||
Accounts payable and other liabilities | 130,776 | 129,192 | |||||
Deferred income tax liability | 9,801 | 9,801 | |||||
Advance deposits and deferred revenue | 13,460 | 11,647 | |||||
Accrued interest | 4,872 | 4,883 | |||||
Distributions payable | 41,361 | 41,409 | |||||
Total liabilities | 1,785,656 | 1,772,418 | |||||
Equity | |||||||
Shareholders’ equity: | |||||||
Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized; zero shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | — | — | |||||
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 124,807,780 and 124,635,675 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 1,248 | 1,246 | |||||
Additional paid-in-capital | 2,190,737 | 2,195,732 | |||||
Accumulated other comprehensive loss | (36,850 | ) | (16,602 | ) | |||
(Distributions in excess of net earnings) retained earnings | (13,448 | ) | 2,439 | ||||
Total shareholders’ equity | 2,141,687 | 2,182,815 | |||||
Noncontrolling interest | |||||||
Noncontrolling interest in consolidated joint venture | 5,856 | 6,177 | |||||
Noncontrolling interest in the Operating Partnership | 7,139 | 11,532 | |||||
Total noncontrolling interest | 12,995 | 17,709 | |||||
Total equity | 2,154,682 | 2,200,524 | |||||
Total liabilities and equity | $ | 3,940,338 | $ | 3,972,942 | |||
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RLJ Lodging Trust
Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(unaudited)
For the three months ended March 31, | |||||||
2016 | 2015 | ||||||
Revenue | |||||||
Operating revenue | |||||||
Room revenue | $ | 239,512 | $ | 232,559 | |||
Food and beverage revenue | 26,555 | 28,993 | |||||
Other operating department revenue | 9,104 | 8,853 | |||||
Total revenue | $ | 275,171 | $ | 270,405 | |||
Expense | |||||||
Operating expense | |||||||
Room expense | $ | 55,028 | $ | 54,086 | |||
Food and beverage expense | 19,817 | 20,764 | |||||
Management and franchise fee expense | 28,501 | 28,042 | |||||
Other operating expense | 60,021 | 60,581 | |||||
Total property operating expense | 163,367 | 163,473 | |||||
Depreciation and amortization | 40,730 | 37,203 | |||||
Property tax, insurance and other | 20,155 | 20,043 | |||||
General and administrative | 9,649 | 10,399 | |||||
Transaction and pursuit costs | 79 | 135 | |||||
Total operating expense | 233,980 | 231,253 | |||||
Operating income | 41,191 | 39,152 | |||||
Other income | 302 | 90 | |||||
Interest income | 397 | 445 | |||||
Interest expense | (14,892 | ) | (13,508 | ) | |||
Income from continuing operations before income tax expense | 26,998 | 26,179 | |||||
Income tax expense | (1,476 | ) | (375 | ) | |||
Income from continuing operations | 25,522 | 25,804 | |||||
(Loss) gain on sale of hotel properties | (172 | ) | 22,298 | ||||
Net income | 25,350 | 48,102 | |||||
Net loss (income) attributable to noncontrolling interests | |||||||
Noncontrolling interest in consolidated joint venture | 62 | 69 | |||||
Noncontrolling interest in the Operating Partnership | (114 | ) | (321 | ) | |||
Net income attributable to common shareholders | $ | 25,298 | $ | 47,850 | |||
Basic per common share data: | |||||||
Net income per share attributable to common shareholders | $ | 0.20 | $ | 0.36 | |||
Weighted-average number of common shares | 123,739,823 | 131,272,611 | |||||
Diluted per common share data | |||||||
Net income per share attributable to common shareholders | $ | 0.20 | $ | 0.36 | |||
Weighted-average number of common shares | 124,141,824 | 132,286,542 | |||||
Note:
The Statement of Comprehensive Income and corresponding notes can be found in the Company’s Quarterly Report on Form 10-Q.
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RLJ Lodging Trust
Reconciliation of Net Income to Non-GAAP Measures
(Amounts in thousands, except per share data)
(unaudited)
Funds From Operations (FFO)
For the three months ended March 31, | |||||||
2016 | 2015 | ||||||
Net income | $ | 25,350 | $ | 48,102 | |||
Depreciation and amortization | 40,730 | 37,203 | |||||
Loss (gain) on sale of hotel properties | 172 | (22,298 | ) | ||||
Noncontrolling interest in consolidated joint venture | 62 | 69 | |||||
Adjustments related to consolidated joint venture (1) | (39 | ) | (42 | ) | |||
FFO attributable to common shareholders | 66,275 | 63,034 | |||||
Transaction and pursuit costs | 79 | 135 | |||||
Amortization of share-based compensation | 2,591 | 4,023 | |||||
Non-cash income tax expense | 1,131 | — | |||||
Loan related costs (2) | 341 | 90 | |||||
Other expenses (3) | 356 | — | |||||
Adjusted FFO attributable to common shareholders | $ | 70,773 | $ | 67,282 | |||
Adjusted FFO per common share and unit-basic | $ | 0.57 | $ | 0.51 | |||
Adjusted FFO per common share and unit-diluted | $ | 0.57 | $ | 0.51 | |||
Basic weighted-average common shares and units outstanding (4) | 124,490 | 132,167 | |||||
Diluted weighted-average common shares and units outstanding (4) | 124,892 | 133,181 | |||||
Note:
(1) Includes depreciation and amortization expense allocated to the noncontrolling interest in the joint venture.
(2) Represents debt modification and extinguishment costs.
(3) Represents property-level severance costs.
(4) Includes 0.8 million and 0.9 million weighted average operating partnership units for March 31, 2016 and March 31, 2015, respectively.
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RLJ Lodging Trust
Reconciliation of Net Income to Non-GAAP Measures
(Amounts in thousands)
(unaudited)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
For the three months ended March 31, | |||||||
2016 | 2015 | ||||||
Net income | $ | 25,350 | $ | 48,102 | |||
Depreciation and amortization | 40,730 | 37,203 | |||||
Interest expense, net (1) | 14,886 | 13,497 | |||||
Income tax expense | 1,476 | 375 | |||||
Noncontrolling interest in consolidated joint venture | 62 | 69 | |||||
Adjustments related to consolidated joint venture (2) | (39 | ) | (42 | ) | |||
EBITDA | 82,465 | 99,204 | |||||
Transaction and pursuit costs | 79 | 135 | |||||
Loss (gain) on sale of hotel properties | 172 | (22,298 | ) | ||||
Amortization of share-based compensation | 2,591 | 4,023 | |||||
Loan related costs (3) | 341 | — | |||||
Other expenses (4) | 356 | — | |||||
Adjusted EBITDA | 86,004 | 81,064 | |||||
General and administrative (5) | 6,717 | 6,376 | |||||
Operating results from noncontrolling interest in joint venture | (23 | ) | (27 | ) | |||
Other corporate adjustments | (265 | ) | (160 | ) | |||
Consolidated Hotel EBITDA | 92,433 | 87,253 | |||||
Pro forma adjustments - Income from sold properties | (14 | ) | (2,502 | ) | |||
Pro forma adjustments - Income from prior ownership | — | 1,358 | |||||
Pro forma Consolidated Hotel EBITDA | 92,419 | 86,109 | |||||
Non-comparable hotels (6) | (4,765 | ) | (1,273 | ) | |||
Pro forma Hotel EBITDA | $ | 87,654 | $ | 84,836 | |||
Note:
(1) Interest expense is net of interest income, excluding amounts attributable to investment in loans of $0.4 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively.
(2) Includes depreciation and amortization expense allocated to the noncontrolling interest in the joint venture.
(3) Represents debt modification costs.
(4) Represents property-level severance costs.
(5) General and administrative expenses exclude amortization of share based compensation and other non-recurring expenses reflected in Adjusted EBITDA.
(6) Reflects the results of four non-comparable hotels that were not open for the entirety of the comparable periods: Courtyard Waikiki Beach, Courtyard San Francisco Union Square, SpringHill Suites Houston Downtown/Convention Center, and Hyatt Place DC/Downtown/K Street.
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RLJ Lodging Trust
Consolidated Debt Summary
(Amounts in thousands)
(unaudited)
Loan | Base Term (Years) | Maturity (incl. extensions) | Floating / Fixed | Interest Rate (1) | Balance as of March 31, 2016 (2) | |||
Secured Debt | ||||||||
Wells Fargo - 4 hotels | 3 | Oct 2021 | Floating (3) | 3.99% | $ | 150,000 | ||
Wells Fargo - 4 hotels | 2 | Mar 2022 | Floating (3) | 4.04% | 148,500 | |||
Wells Fargo - 1 hotel (5) | 10 | Jun 2022 | Fixed | 5.25% | 33,112 | |||
PNC Bank - 5 hotels | 5 | Mar 2023 | Floating | 2.54% | 85,000 | |||
Weighted Average / Secured Total | 3.81% | $ | 416,612 | |||||
Unsecured Debt | ||||||||
Revolver (6) | 4 | Nov 2017 | Floating | 2.19% | $ | — | ||
2013 Five-Year Term Loan | 5 | Aug 2018 | Floating (3)(4) | 3.10% | 400,000 | |||
2012 Five-Year Term Loan | 5 | Mar 2019 | Floating (3) | 2.72% | 400,000 | |||
2012 Seven-Year Term Loan | 7 | Nov 2019 | Floating (3) | 4.04% | 225,000 | |||
2014 Seven-Year Term Loan | 7 | Jan 2022 | Floating (3) | 3.43% | 150,000 | |||
Weighted Average / Unsecured Total | 3.19% | $ | 1,175,000 | |||||
Weighted Average / Total Debt | 3.35% | $ | 1,591,612 | |||||
Note:
(1) Interest rates as of March 31, 2016.
(2) Excludes deferred financing costs.
(3) The floating interest rate is hedged with an interest rate swap.
(4) Reflects interest rate swap on $350.0 million.
(5) Excludes the $1.2 million impact of a fair value adjustment.
(6) As of March 31, 2016, there was $300.0 million of borrowing capacity on the Revolver, which was charged an unused commitment fee of 0.35% annually.
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RLJ Lodging Trust
Acquisitions
(unaudited)
Acquisitions | Location | Acquisition Date | Management Company | Rooms | Gross Purchase Price ($ in millions) | % Interest | ||||
2016 Acquisitions | ||||||||||
No assets acquired to date | — | — | — | — | — | — | ||||
2015 Acquisitions | ||||||||||
Hyatt Place DC/Downtown/K Street | Washington, DC | Jul 15, 2015 | Aimbridge Hospitality | 164 | $ | 68.0 | 100 | % | ||
Homewood Suites Seattle/Lynnwood | Lynnwood, WA | Jul 20, 2015 | InnVentures | 170 | 37.9 | 100 | % | |||
Residence Inn Palo Alto Los Altos | Los Altos, CA | Sep 25, 2015 | InnVentures | 156 | 70.0 | 100 | % | |||
2015 Total | 490 | $ | 175.9 | 100 | % | |||||
Total Acquisitions | 490 | $ | 175.9 | 100 | % | |||||
13
RLJ Lodging Trust
Pro forma Operating Statistics — Top 60 Assets
Property | City/State | # of Rooms | Pro forma Consolidated Hotel EBITDA | ||
Marriott Louisville Downtown | Louisville, KY | 616 | $ | 16,253 | |
DoubleTree NYC Metropolitan | New York, NY | 764 | 14,853 | ||
Hilton New York Fashion District | New York, NY | 280 | 9,464 | ||
Courtyard Austin Dtwn Conv Ctr | Austin, TX | 270 | 9,449 | ||
Hilton Garden Inn New York W 35th St | New York, NY | 298 | 9,060 | ||
Courtyard Portland City Center | Portland, OR | 256 | 7,769 | ||
Embassy Suites Tampa Dtwn Conv Ctr | Tampa, FL | 360 | 7,516 | ||
Courtyard Chicago Downtown Mag Mile | Chicago, IL | 306 | 6,655 | ||
DoubleTree Grand Key Resort | Key West, FL | 216 | 6,540 | ||
Hilton Garden Inn SF Oakland Bay Bridge | Emeryville, CA | 278 | 6,455 | ||
Hilton Cabana Miami Beach | Miami Beach, FL | 231 | 6,321 | ||
Residence Inn Palo Alto Los Altos | Los Altos, CA | 156 | 6,146 | ||
Hyatt House Emeryville SF Bay Area | Emeryville, CA | 234 | 6,123 | ||
Renaissance Pittsburgh Hotel | Pittsburgh, PA | 300 | 6,076 | ||
Embassy Suites Boston Waltham | Waltham, MA | 275 | 6,054 | ||
Fairfield Inn & Suites DC Downtown | Washington, DC | 198 | 5,933 | ||
Hyatt House San Jose Silicon Valley | San Jose, CA | 164 | 5,848 | ||
Hyatt House Santa Clara | Santa Clara, CA | 150 | 5,718 | ||
Marriott Denver South @ Park Meadows | Lone Tree, CO | 279 | 5,664 | ||
Courtyard Charleston Historic District | Charleston, SC | 176 | 5,602 | ||
Marriott Denver Airport @ Gateway Park | Aurora, CO | 238 | 5,398 | ||
Residence Inn Austin Dtwn Conv Ctr | Austin, TX | 179 | 5,322 | ||
Hilton Garden Inn New Orleans Conv Ctr | New Orleans, LA | 286 | 5,176 | ||
Renaissance Ft Lauderdale Plantation | Plantation, FL | 250 | 5,103 | ||
Hilton Garden Inn Los Angeles Hollywood | Los Angeles, CA | 160 | 5,019 | ||
Embassy Suites Los Angeles Downey | Downey, CA | 220 | 4,779 | ||
Residence Inn Bethesda Downtown | Bethesda, MD | 188 | 4,645 | ||
Homewood Suites Washington DC Downtown | Washington, DC | 175 | 4,509 | ||
Hyatt Atlanta Midtown | Atlanta, GA | 194 | 4,386 | ||
Courtyard New York Manhattan Upper East | New York, NY | 226 | 4,213 | ||
Hyatt Place Fremont Silicon Valley | Fremont, CA | 151 | 4,191 | ||
Fairfield Inn & Suites Key West | Key West, FL | 106 | 4,108 | ||
Courtyard Waikiki Beach | Honolulu, HI | 403 | 4,055 | ||
Marriott Austin South | Austin, TX | 211 | 4,022 | ||
Renaissance Boulder Flatiron Hotel | Broomfield, CO | 232 | 3,799 | ||
Hyatt House San Diego Sorrento Mesa | San Diego, CA | 193 | 3,760 | ||
Courtyard Houston By The Galleria | Houston, TX | 190 | 3,513 | ||
Hyatt House Charlotte Center City | Charlotte, NC | 163 | 3,446 | ||
Embassy Suites West Palm Beach Central | West Palm Beach, FL | 194 | 3,379 | ||
Residence Inn Louisville Downtown | Louisville, KY | 140 | 3,315 | ||
Hyatt House San Ramon | San Ramon, CA | 142 | 3,285 | ||
Residence Inn Chicago Oak Brook | Oak Brook, IL | 156 | 3,237 | ||
Embassy Suites Irvine Orange Cnty Arprt | Irvine, CA | 293 | 3,214 | ||
Residence Inn National Harbor DC | Oxon Hill, MD | 162 | 3,204 | ||
Residence Inn Indy Dtwn On The Canal | Indianapolis, IN | 134 | 3,204 | ||
Hyatt Market Street The Woodlands | The Woodlands, TX | 70 | 3,172 | ||
Hampton Inn Garden City | Garden City, NY | 143 | 3,071 | ||
SpringHill Suites Portland Hillsboro | Hillsboro, OR | 106 | 2,992 | ||
Residence Inn Houston By The Galleria | Houston, TX | 146 | 2,966 | ||
Hyatt Place Madison Downtown | Madison, WI | 151 | 2,930 | ||
Courtyard Atlanta Buckhead | Atlanta, GA | 181 | 2,928 | ||
Courtyard Houston Dtwn Conv Ctr | Houston, TX | 191 | 2,906 | ||
Hyatt House Dallas Lincoln Park | Dallas, TX | 155 | 2,880 | ||
Homewood Suites Seattle Lynnwood | Lynnwood, WA | 170 | 2,875 | ||
Residence Inn Houston Dtwn Conv Ctr | Houston, TX | 171 | 2,823 | ||
Hilton Garden Inn Pittsburgh Univ Pl | Pittsburgh, PA | 202 | 2,768 | ||
Courtyard Austin Airport | Austin, TX | 150 | 2,718 | ||
Hampton Inn Houston Near The Galleria | Houston, TX | 176 | 2,590 | ||
Courtyard San Francisco | San Francisco, CA | 166 | 2,144 | ||
Hyatt Place Washington DC Dtwn K St | Washington, DC | 164 | 1,177 | ||
Top 60 Assets | 13,135 | 296,721 | |||
Other (1) | 7,700 | 114,238 | |||
Total Portfolio | 20,835 | $ | 410,959 | ||
Note: For the trailing twelve months ended March 31, 2016. Information above is unaudited and includes results for periods prior to the Company's ownership. Results reflect 100% of DoubleTree NYC Metropolitan financial results, which have not been adjusted to reflect the noncontrolling interest in the joint venture. Amounts in thousands, except rooms. (1) Reflects 65 hotels.
14
RLJ Lodging Trust
Pro forma Operating Statistics
For the three months ended March 31, 2016
Note: Information above is unaudited and includes results for periods prior to the Company's ownership. Results reflect 100% of DoubleTree NYC Metropolitan financial results, which have not been adjusted to reflect the noncontrolling interest in the joint venture. All results exclude sold hotels as of March 31, 2016, and four non-comparable properties.
Top Markets | Occupancy | ADR | RevPAR | % of Hotel EBITDA | ||||||||||||||||||||||||||
# of Hotels | 2016 | 2015 | Var | 2016 | 2015 | Var | 2016 | 2015 | Var | Q1 | ||||||||||||||||||||
South Florida | 10 | 89.0 | % | 91.7 | % | (2.9 | )% | $ | 218.29 | $ | 214.21 | 1.9 | % | $ | 194.28 | $ | 196.44 | (1.1 | )% | 17 | % | |||||||||
Austin | 13 | 79.4 | % | 77.8 | % | 2.1 | % | 177.77 | 176.96 | 0.5 | % | 141.22 | 137.67 | 2.6 | % | 12 | % | |||||||||||||
Northern California | 7 | 85.6 | % | 75.7 | % | 13.0 | % | 212.81 | 186.75 | 14.0 | % | 182.08 | 141.46 | 28.7 | % | 11 | % | |||||||||||||
Louisville | 5 | 73.6 | % | 70.2 | % | 4.8 | % | 152.92 | 153.84 | (0.6 | )% | 112.54 | 108.03 | 4.2 | % | 7 | % | |||||||||||||
Houston | 9 | 72.3 | % | 74.3 | % | (2.7 | )% | 159.90 | 168.01 | (4.8 | )% | 115.54 | 124.79 | (7.4 | )% | 7 | % | |||||||||||||
Denver | 13 | 68.6 | % | 65.7 | % | 4.4 | % | 127.99 | 129.72 | (1.3 | )% | 87.77 | 85.19 | 3.0 | % | 7 | % | |||||||||||||
Southern California | 6 | 81.4 | % | 77.4 | % | 5.1 | % | 158.76 | 149.20 | 6.4 | % | 129.19 | 115.48 | 11.9 | % | 5 | % | |||||||||||||
DC | 7 | 65.1 | % | 70.9 | % | (8.1 | )% | 174.38 | 165.98 | 5.1 | % | 113.54 | 117.62 | (3.5 | )% | 5 | % | |||||||||||||
Chicago | 14 | 54.5 | % | 62.4 | % | (12.7 | )% | 129.28 | 129.00 | 0.2 | % | 70.48 | 80.55 | (12.5 | )% | 3 | % | |||||||||||||
NYC | 5 | 92.3 | % | 91.6 | % | 0.7 | % | 168.52 | 170.38 | (1.1 | )% | 155.51 | 156.11 | (0.4 | )% | 1 | % | |||||||||||||
Other | 32 | 74.2 | % | 74.2 | % | (0.1 | )% | 153.74 | 151.20 | 1.7 | % | 114.03 | 112.25 | 1.6 | % | 25 | % | |||||||||||||
Total | 121 | 75.4 | % | 75.3 | % | 0.1 | % | $ | 165.59 | $ | 162.24 | 2.1 | % | $ | 124.80 | $ | 122.22 | 2.1 | % | 100 | % | |||||||||
Service Level | Occupancy | ADR | RevPAR | % of Hotel EBITDA | ||||||||||||||||||||||||||
# of Hotels | 2016 | 2015 | Var | 2016 | 2015 | Var | 2016 | 2015 | Var | Q1 | ||||||||||||||||||||
Focused-Service | 100 | 74.2 | % | 73.8 | % | 0.6 | % | $ | 158.50 | $ | 154.36 | 2.7 | % | $ | 117.56 | $ | 113.86 | 3.3 | % | 71 | % | |||||||||
Compact Full-Service | 20 | 79.0 | % | 80.3 | % | (1.7 | )% | 183.87 | 181.28 | 1.4 | % | 145.18 | 145.66 | (0.3 | )% | 25 | % | |||||||||||||
Full-Service | 1 | 73.2 | % | 69.9 | % | 4.7 | % | 167.81 | 172.47 | (2.7 | )% | 122.80 | 120.56 | 1.9 | % | 4 | % | |||||||||||||
Total | 121 | 75.4 | % | 75.3 | % | 0.1 | % | $ | 165.59 | $ | 162.24 | 2.1 | % | $ | 124.80 | $ | 122.22 | 2.1 | % | 100 | % | |||||||||
Chain Scale | Occupancy | ADR | RevPAR | % of Hotel EBITDA | ||||||||||||||||||||||||||
# of Hotels | 2016 | 2015 | Var | 2016 | 2015 | Var | 2016 | 2015 | Var | Q1 | ||||||||||||||||||||
Upper Upscale | 18 | 75.9 | % | 77.0 | % | (1.4 | )% | $ | 182.69 | $ | 180.28 | 1.3 | % | $ | 138.74 | $ | 138.83 | (0.1 | )% | 27 | % | |||||||||
Upscale | 87 | 76.1 | % | 75.1 | % | 1.3 | % | 161.34 | 157.75 | 2.3 | % | 122.72 | 118.48 | 3.6 | % | 64 | % | |||||||||||||
Upper Midscale | 15 | 71.0 | % | 73.9 | % | (3.9 | )% | 155.89 | 152.66 | 2.1 | % | 110.72 | 112.86 | (1.9 | )% | 9 | % | |||||||||||||
Midscale | 1 | 44.1 | % | 58.8 | % | (25.0 | )% | 96.90 | 83.85 | 15.6 | % | 42.74 | 49.30 | (13.3 | )% | — | % | |||||||||||||
Total | 121 | 75.4 | % | 75.3 | % | 0.1 | % | $ | 165.59 | $ | 162.24 | 2.1 | % | $ | 124.80 | $ | 122.22 | 2.1 | % | 100 | % | |||||||||
Flags | Occupancy | ADR | RevPAR | % of Hotel EBITDA | ||||||||||||||||||||||||||
# of Hotels | 2016 | 2015 | Var | 2016 | 2015 | Var | 2016 | 2015 | Var | Q1 | ||||||||||||||||||||
Residence Inn | 29 | 74.6 | % | 74.6 | % | — | % | $ | 156.94 | $ | 152.86 | 2.7 | % | $ | 117.12 | $ | 114.06 | 2.7 | % | 18 | % | |||||||||
Courtyard | 22 | 71.5 | % | 73.4 | % | (2.5 | )% | 156.11 | 157.65 | (1.0 | )% | 111.65 | 115.65 | (3.5 | )% | 16 | % | |||||||||||||
Hyatt House | 11 | 85.1 | % | 73.1 | % | 16.5 | % | 172.18 | 160.31 | 7.4 | % | 146.59 | 117.20 | 25.1 | % | 12 | % | |||||||||||||
SpringHill Suites | 6 | 80.8 | % | 81.8 | % | (1.1 | )% | 189.45 | 177.97 | 6.4 | % | 153.16 | 145.51 | 5.3 | % | 9 | % | |||||||||||||
Marriott | 5 | 71.0 | % | 69.7 | % | 1.9 | % | 160.83 | 163.33 | (1.5 | )% | 114.18 | 113.79 | 0.3 | % | 9 | % | |||||||||||||
Hilton Garden Inn | 9 | 75.7 | % | 78.1 | % | (3.0 | )% | 168.78 | 162.61 | 3.8 | % | 127.85 | 126.99 | 0.7 | % | 8 | % | |||||||||||||
Hampton Inn | 7 | 73.7 | % | 75.5 | % | (2.5 | )% | 167.02 | 162.79 | 2.6 | % | 123.02 | 122.93 | 0.1 | % | 5 | % | |||||||||||||
Embassy Suites | 7 | 72.0 | % | 74.4 | % | (3.2 | )% | 145.38 | 144.07 | 0.9 | % | 104.70 | 107.23 | (2.4 | )% | 4 | % | |||||||||||||
Hilton | 2 | 92.4 | % | 93.5 | % | (1.2 | )% | 218.33 | 229.23 | (4.8 | )% | 201.66 | 214.31 | (5.9 | )% | 4 | % | |||||||||||||
Fairfield Inn & Suites | 8 | 71.4 | % | 69.4 | % | 2.9 | % | 124.64 | 122.36 | 1.9 | % | 88.96 | 84.87 | 4.8 | % | 4 | % | |||||||||||||
Renaissance | 3 | 66.0 | % | 72.3 | % | (8.7 | )% | 170.60 | 167.90 | 1.6 | % | 112.57 | 121.39 | (7.3 | )% | 3 | % | |||||||||||||
DoubleTree | 3 | 88.0 | % | 88.2 | % | (0.2 | )% | 180.72 | 181.04 | (0.2 | )% | 159.12 | 159.72 | (0.4 | )% | 2 | % | |||||||||||||
Hyatt | 2 | 74.9 | % | 75.1 | % | (0.3 | )% | 209.11 | 203.80 | 2.6 | % | 156.60 | 153.02 | 2.3 | % | 2 | % | |||||||||||||
Hyatt Place | 2 | 84.0 | % | 80.5 | % | 4.3 | % | 155.25 | 146.81 | 5.8 | % | 130.42 | 118.24 | 10.3 | % | 2 | % | |||||||||||||
Homewood Suites | 2 | 61.8 | % | 64.4 | % | (4.1 | )% | 176.79 | 169.35 | 4.4 | % | 109.17 | 109.02 | 0.1 | % | 1 | % | |||||||||||||
Other | 3 | 51.8 | % | 60.1 | % | (13.8 | )% | 156.67 | 147.34 | 6.3 | % | 81.12 | 88.51 | (8.3 | )% | 1 | % | |||||||||||||
Total | 121 | 75.4 | % | 75.3 | % | 0.1 | % | $ | 165.59 | $ | 162.24 | 2.1 | % | $ | 124.80 | $ | 122.22 | 2.1 | % | 100 | % | |||||||||
15