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 04, 2023
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||||||||
| (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):
Securities registered pursuant to Section 12 (b) of the Exchange Act:
| Title of Class | Trading Symbol | Name of Exchange on Which Registered | ||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 4, 2023 , RLJ Lodging Trust (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2023. 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 | ||||||||
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, 2023 | By: | /s/ Leslie D. Hale | ||||||
| Leslie D. Hale | ||||||||
| President and Chief Executive Officer | ||||||||
EXHIBIT LIST
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
Press Release
RLJ Lodging Trust Reports First Quarter 2023 Results
- Q1 RevPAR increased 27.0% from 2022
- Repurchased $40 million of common shares
- Increased quarterly dividend to $0.08 per common share
Bethesda, MD, May 4, 2023 – RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months ended March 31, 2023.
First Quarter And Year To Date Highlights
•Portfolio Comparable RevPAR of $136.45, an increase of 27.0% from Q1 2022 and achieved 95% of the comparable period in 2019
•Total revenue of $314.5 million
•Net income of $10.5 million
•Net income per diluted share attributable to common shareholders of $0.03
•Comparable Hotel EBITDA of $90.9 million
•Adjusted EBITDA of $82.7 million
•Adjusted FFO per diluted common share and unit of $0.35
•Repurchased approximately 3.9 million common shares for approximately $40 million at an average price per share of $10.22
•Increased quarterly dividend by 60% to $0.08 per common share
•Exercised option to extend maturity of $225 million of term loans and a $200 million secured loan to 2024
“We are pleased to see the positive momentum in lodging fundamentals continue, especially in urban markets which benefited from further improvement in business travel, strong group demand, healthy leisure and rising international travel.” commented Leslie D. Hale, President and Chief Executive Officer. “These positive trends allowed our portfolio to achieve strong year-over-year RevPAR growth with continuing pricing power, which led to our first quarter results coming in ahead of our expectations. A number of our key urban markets including San Diego, New York and Washington DC, exceeded 2019 ADR by 10% or more during the quarter. Additionally, we continued to demonstrate the optionality that our strong balance sheet provides by executing on our incremental growth initiatives, opportunistically repurchasing our shares on a leverage neutral basis and meaningfully increasing our quarterly dividend by 60%, which underscore the benefits of our strong free cash flow profile."
The prefix “comparable” as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.
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Financial and Operating Highlights
($ in thousands, except ADR, RevPAR, and per share amounts)
(unaudited)
| For the three months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
Operational Overview: (1) | ||||||||
| Comparable ADR | $199.07 | $175.82 | ||||||
| Comparable Occupancy | 68.5% | 61.1% | ||||||
| Comparable RevPAR | $136.45 | $107.42 | ||||||
| Financial Overview: | ||||||||
| Total Revenues | $314,503 | $242,899 | ||||||
| Comparable Hotel Revenue | $314,488 | $242,510 | ||||||
| Net Income (Loss) | $10,514 | ($15,469) | ||||||
| Comparable Hotel EBITDA (2) | $90,926 | $63,251 | ||||||
| Comparable Hotel EBITDA Margin | 28.9% | 26.1% | ||||||
| Adjusted EBITDA | $82,685 | $54,594 | ||||||
| Adjusted FFO | $56,080 | $23,894 | ||||||
| Adjusted FFO Per Basic and Diluted Common Share and Unit | $0.35 | $0.14 | ||||||
Note:
(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of March 31, 2023.
(2) Comparable Hotel EBITDA for the three months ended March 31 2022 excludes $0.2 million net income from sold hotels. Comparable Hotel EBITDA for the three months ended March 31, 2022 includes $0.1 million net income from acquired hotels.
Operational Update
During the first quarter, the Company’s portfolio generated Comparable RevPAR of $136.45, an increase of 27.0% from the comparable period in 2022 and achieved 95% of the comparable period in 2019. Occupancy during the first quarter of 2023 increased by 12.2% while ADR increased by 13.2% compared to the comparable period in 2022, achieving 90% and 105% of occupancy and ADR for the comparable period in 2019, respectively. The Company’s strong performance during the first quarter was positively impacted by broad based improvement in all segments of demand, most notably in urban markets where the Company generates over two-thirds of its earnings.
Share Repurchases
Year-to-date through May 4, 2023, the Company has repurchased approximately 3.9 million common shares for approximately $40 million, at an average price per share of $10.22, including 1.2 million shares repurchased so far during the second quarter for $12.5 million at an average price per share of $10.21.
The Company's Board of Trustees recently approved a new one-year share repurchase program to acquire up to an aggregate $250.0 million of common and preferred shares under the same terms as the expiring program.
Balance Sheet
As of March 31, 2023, the Company had approximately $1.1 billion of total liquidity, comprising approximately $474.3 million of unrestricted cash and $600.0 million available under its revolving credit facility ("Revolver"), and $2.2 billion of debt outstanding, 93% of which is currently either fixed or hedged.
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During the first quarter of 2023, the Company drew down the final $95 million in proceeds on its amended $200 million term loan and utilized these proceeds to pay off $94 million in term loans maturing in January 2023. Additionally, the Company extended the maturity to January 2024 of approximately $225 million of its term loans maturing in January 2023, and $200 million of a secured loan maturing in 2023 to April 2024.
Dividends
The Company’s Board of Trustees declared a quarterly cash dividend of $0.08 per common share of beneficial interest of the Company. The dividend was paid on April 17, 2023 to shareholders of record as of March 31, 2023.
The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on April 28, 2023 to shareholders of record as of March 31, 2023.
Q2 2023 Outlook
Based on current trends and assuming no materials disruptions to travel caused by pandemics or worsening macro-economic conditions, the Company's second quarter 2023 is as follows:
Q2 2023 | |||||
Comparable RevPAR | $155.00 to $159.00 | ||||
Comparable Hotel EBITDA | $121.0M to $130.0.M | ||||
Adjusted EBITDA | $112.0M to $121.0M | ||||
Adjusted FFO per diluted share | $0.51 to $0.57 | ||||
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 May 5, 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 first 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.
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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, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.
###
Additional Contact:
Sean M. Mahoney, Executive Vice President and Chief Financial Officer – (301) 280-7774
For additional information or to receive press releases via email, please visit our website:
http://www.rljlodgingtrust.com
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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 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.
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 benefit or 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) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.
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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 hotels
For the three months ended March 31, 2023 and 2022, Comparable adjustments included the following acquired hotel:
•21c Hotel Nashville acquired in July 2022
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Comparable adjustments: Sold hotels
For the three months ended March 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
7
RLJ Lodging Trust
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(unaudited)
| March 31, 2023 | December 31, 2022 | ||||||||||
| Assets | |||||||||||
| Investment in hotel properties, net | $ | 4,165,843 | $ | 4,180,328 | |||||||
| Investment in unconsolidated joint ventures | 7,260 | 6,979 | |||||||||
| Cash and cash equivalents | 474,332 | 481,316 | |||||||||
| Restricted cash reserves | 31,244 | 55,070 | |||||||||
| Hotel and other receivables, net of allowance of $323 and $319, respectively | 41,178 | 38,528 | |||||||||
| Lease right-of-use assets | 135,480 | 136,915 | |||||||||
| Prepaid expense and other assets | 76,615 | 79,089 | |||||||||
| Total assets | $ | 4,931,952 | $ | 4,978,225 | |||||||
| Liabilities and Equity | |||||||||||
| Debt, net | $ | 2,219,284 | $ | 2,217,555 | |||||||
| Accounts payable and other liabilities | 144,775 | 155,916 | |||||||||
| Advance deposits and deferred revenue | 27,904 | 23,769 | |||||||||
| Lease liabilities | 116,193 | 117,010 | |||||||||
| Accrued interest | 11,144 | 20,707 | |||||||||
| Distributions payable | 19,412 | 14,622 | |||||||||
| Total liabilities | 2,538,712 | 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 March 31, 2023 and December 31, 2022 | 366,936 | 366,936 | |||||||||
| Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 160,077,784 and 162,003,533 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 1,601 | 1,620 | |||||||||
| Additional paid-in capital | 3,034,682 | 3,054,958 | |||||||||
| Distributions in excess of net earnings | (1,057,939) | (1,049,441) | |||||||||
| Accumulated other comprehensive income | 34,175 | 40,591 | |||||||||
| Total shareholders’ equity | 2,379,455 | 2,414,664 | |||||||||
| Noncontrolling interests: | |||||||||||
| Noncontrolling interest in the Operating Partnership | 6,264 | 6,313 | |||||||||
| Noncontrolling interest in consolidated joint ventures | 7,521 | 7,669 | |||||||||
| Total noncontrolling interest | 13,785 | 13,982 | |||||||||
| Total equity | 2,393,240 | 2,428,646 | |||||||||
| Total liabilities and equity | $ | 4,931,952 | $ | 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.
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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, | |||||||||||
| 2023 | 2022 | ||||||||||
| Revenues | |||||||||||
| Operating revenues | |||||||||||
| Room revenue | $ | 260,832 | $ | 205,779 | |||||||
| Food and beverage revenue | 33,288 | 20,901 | |||||||||
| Other revenue | 20,383 | 16,219 | |||||||||
| Total revenues | 314,503 | 242,899 | |||||||||
| Expenses | |||||||||||
| Operating expenses | |||||||||||
| Room expense | 66,051 | 53,828 | |||||||||
| Food and beverage expense | 26,137 | 16,169 | |||||||||
| Management and franchise fee expense | 26,182 | 20,388 | |||||||||
| Other operating expenses | 82,624 | 68,654 | |||||||||
| Total property operating expenses | 200,994 | 159,039 | |||||||||
| Depreciation and amortization | 44,996 | 46,865 | |||||||||
| Property tax, insurance and other | 24,648 | 22,513 | |||||||||
| General and administrative | 13,656 | 14,134 | |||||||||
| Transaction costs | 20 | 62 | |||||||||
| Total operating expenses | 284,314 | 242,613 | |||||||||
| Other income, net | 849 | 7,285 | |||||||||
| Interest income | 3,664 | 172 | |||||||||
| Interest expense | (24,130) | (24,561) | |||||||||
| Gain on sale of hotel properties, net | — | 1,417 | |||||||||
| Income (loss) before equity in income from unconsolidated joint ventures | 10,572 | (15,401) | |||||||||
| Equity in income from unconsolidated joint ventures | 281 | 122 | |||||||||
| Income (loss) before income tax expense | 10,853 | (15,279) | |||||||||
| Income tax expense | (339) | (190) | |||||||||
| Net income (loss) | 10,514 | (15,469) | |||||||||
| Net (income) loss attributable to noncontrolling interests: | |||||||||||
| Noncontrolling interest in the Operating Partnership | (17) | 104 | |||||||||
| Noncontrolling interest in consolidated joint ventures | 148 | 118 | |||||||||
| Net income (loss) attributable to RLJ | 10,645 | (15,247) | |||||||||
| Preferred dividends | (6,279) | (6,279) | |||||||||
| Net income (loss) attributable to common shareholders | $ | 4,366 | $ | (21,526) | |||||||
| Basic per common share data: | |||||||||||
| Net income (loss) per share attributable to common shareholders - basic | $ | 0.03 | $ | (0.13) | |||||||
| Weighted-average number of common shares | 159,483,268 | 164,179,661 | |||||||||
| Diluted per common share data: | |||||||||||
| Net income (loss) per share attributable to common shareholders - diluted | $ | 0.03 | $ | (0.13) | |||||||
| Weighted-average number of common shares | 160,143,748 | 164,179,661 | |||||||||
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.
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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 March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net income (loss) | $ | 10,514 | $ | (15,469) | |||||||
| Preferred dividends | (6,279) | (6,279) | |||||||||
| Depreciation and amortization | 44,996 | 46,865 | |||||||||
| Gain on sale of hotel properties, net | — | (1,417) | |||||||||
| Noncontrolling interest in consolidated joint ventures | 148 | 118 | |||||||||
| Adjustments related to consolidated joint venture (1) | (43) | (49) | |||||||||
| Adjustments related to unconsolidated joint venture (2) | 237 | 295 | |||||||||
| FFO | 49,573 | 24,064 | |||||||||
| Transaction costs | 20 | 62 | |||||||||
| Pre-opening costs (3) | 222 | 234 | |||||||||
| Amortization of share-based compensation | 5,692 | 5,185 | |||||||||
| Non-cash income tax expense | — | (135) | |||||||||
| Non-cash interest expense related to discontinued interest rate hedges | 482 | 336 | |||||||||
| Derivative gains in accumulated other comprehensive income reclassified to earnings (4) | — | (5,866) | |||||||||
| Other expenses (5) | 91 | 14 | |||||||||
| Adjusted FFO | $ | 56,080 | $ | 23,894 | |||||||
| Adjusted FFO per common share and unit-basic | $ | 0.35 | $ | 0.14 | |||||||
| Adjusted FFO per common share and unit-diluted | $ | 0.35 | $ | 0.14 | |||||||
| Basic weighted-average common shares and units outstanding (6) | 160,255 | 164,951 | |||||||||
| Diluted weighted-average common shares and units outstanding (6) | 160,916 | 165,516 | |||||||||
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 outside of the normal course of operations.
(6)Includes 0.8 million weighted-average operating partnership units for the three month periods ended March 31, 2023 and 2022.
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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 March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net income (loss) | $ | 10,514 | $ | (15,469) | |||||||
| Depreciation and amortization | 44,996 | 46,865 | |||||||||
| Interest expense, net of interest income | 20,466 | 24,389 | |||||||||
| Income tax expense | 339 | 190 | |||||||||
| Adjustments related to unconsolidated joint venture (1) | 345 | 407 | |||||||||
| EBITDA | 76,660 | 56,382 | |||||||||
| Gain on sale of hotel properties, net | — | (1,417) | |||||||||
EBITDAre | 76,660 | 54,965 | |||||||||
| Transaction costs | 20 | 62 | |||||||||
| Pre-opening costs (2) | 222 | 234 | |||||||||
| Amortization of share-based compensation | 5,692 | 5,185 | |||||||||
| Derivative gains in accumulated other comprehensive income reclassified to earnings (3) | — | (5,866) | |||||||||
| Other expenses (4) | 91 | 14 | |||||||||
| Adjusted EBITDA | 82,685 | 54,594 | |||||||||
| General and administrative | 7,964 | 8,949 | |||||||||
| Other corporate adjustments | 470 | (166) | |||||||||
| Consolidated Hotel EBITDA | 91,119 | 63,377 | |||||||||
| Comparable adjustments - income from sold hotels | (193) | (191) | |||||||||
| Comparable adjustments - income from acquired hotels | — | 65 | |||||||||
| Comparable Hotel EBITDA | $ | 90,926 | $ | 63,251 | |||||||
Notes: Comparable statistics reflect the Company's 96 hotel portfolio owned as of March 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 outside of the normal course of operations.
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RLJ Lodging Trust
Reconciliation of Non-GAAP Measures
(Amounts in thousands except %)
(unaudited)
Comparable Hotel EBITDA Margin
| For the three months ended March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Total revenue | $ | 314,503 | $ | 242,899 | ||||||||||
| Comparable adjustments - revenue from sold hotels | — | (2,220) | ||||||||||||
| Comparable adjustments - revenue from prior ownership of acquired hotels | — | 1,846 | ||||||||||||
| Other corporate adjustments / non-hotel revenue | (15) | (15) | ||||||||||||
| Comparable Hotel Revenue | $ | 314,488 | $ | 242,510 | ||||||||||
| Comparable Hotel EBITDA | $ | 90,926 | $ | 63,251 | ||||||||||
| Comparable Hotel EBITDA Margin | 28.9 | % | 26.1 | % | ||||||||||
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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 March 31, 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 | 4.35% | 200,000 | |||||||||||||||
| Mortgage loan - 3 hotels | 5 | Apr 2026 | Floating | 2.53% | 96,000 | |||||||||||||||
| Mortgage loan - 4 hotels | 5 | Apr 2026 | Floating | 4.89% | 85,000 | |||||||||||||||
| Weighted Average / Mortgage Total | 4.08% | $ | 406,000 | |||||||||||||||||
| Corporate Debt | ||||||||||||||||||||
| Revolver (5) | 4 | May 2025 | Floating | - | $ | — | ||||||||||||||
| $200 Million Term Loan Maturing 2026 | 3 | January 2028 | Floating | 3.43% | 200,000 | |||||||||||||||
| $400 Million Term Loan Maturing 2024 | 5 | January 2024 | Floating | 6.71% | 151,683 | |||||||||||||||
| $225 Million Term Loan Maturing 2024 | 5 | January 2024 | Floating | 4.57% | 72,973 | |||||||||||||||
| $400 Million Term Loan Maturing 2025 | 5 | May 2025 | Floating | 3.27% | 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 | 3.96% | $ | 1,824,656 | |||||||||||||||||
| Weighted Average / Total | 3.98% | $ | 2,230,656 | |||||||||||||||||
Notes:
(1) The floating interest rate is hedged with an interest rate swap.
(2) Interest rates as of March 31, 2023.
(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 March 31, 2023, there was $600.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually.
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