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 8, 2013

 

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 8, 2013, RLJ Lodging Trust (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2013.  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 8, 2013, issued by RLJ Lodging Trust, providing financial results for the three months ended March 31, 2013.

 

2



 

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

 

 

Date: May 8, 2013

By:

/s/ Thomas J. Baltimore, Jr.

 

 

Thomas J. Baltimore, Jr.

 

 

President, Chief Executive Officer and Trustee

 

3



 

EXHIBIT LIST

 

Exhibit
Number

 

Description

99.1

 

Press release dated May 8, 2013, issued by RLJ Lodging Trust, providing financial results for the three months ended March 31, 2013.

 

4


Exhibit 99.1

 

 

Press Release

 

RLJ LODGING TRUST REPORTS FIRST QUARTER 2013 RESULTS

- First quarter Pro forma RevPAR increased 10.6%

- First quarter Pro forma Hotel EBITDA Margin increased 150 basis points

 

Bethesda, MD, May 8, 2013 — RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months ended March 31, 2013.

 

First Quarter Highlights

 

·                  Pro forma RevPAR increased 10.6%, Pro forma ADR increased 6.7% and Pro forma Occupancy increased 3.7%

·                  Pro forma Hotel EBITDA Margin increased 150 basis points to 31.3%

·                  Pro forma Consolidated Hotel EBITDA increased 16.8% to $68.9 million

·                  Adjusted FFO increased 54.5% to $44.1 million

·                  Acquired two hotels and one apartment building that will be converted to a hotel for a total purchase price of $79.5 million in Houston, a key gateway market

·                  Completed first follow-on offering raising net proceeds of $327.7 million

·                  Declared a cash dividend of $0.205 per share for the quarter

 

“Once again our value-add strategies and well diversified portfolio resulted in outsized performance this quarter. The groundwork that we set forth in 2011 and 2012 through acquisitions, capital investments, and proactive balance sheet management continue to serve as a strong tailwind,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer.  “We remain committed to being prudent capital allocators and delivering long-term shareholder value through targeted acquisitions and strategic capital investments.”

 

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 non-comparable hotels that were not open for operation or closed for renovations 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, 2013, increased 10.6% over the comparable period in 2012, driven by a Pro forma ADR increase of 6.7% and a Pro forma Occupancy increase of 3.7%.  Among the Company’s top six markets, the best performers in the quarter were New York City and Austin which experienced RevPAR growth of 43.1% and 9.8%, respectively.

 

Pro forma Hotel EBITDA Margin for the three months ended March 31, 2013, increased 150 basis points over the comparable period in 2012 to 31.3%.

 

Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels.  For the three months ended March 31, 2013, Pro forma Consolidated Hotel EBITDA increased $9.9 million to $68.9 million, representing a 16.8% increase over the comparable period in 2012.

 

1



 

Adjusted EBITDA for the three months ended March 31, 2013, increased $12.2 million to $61.3 million, representing a 24.8% increase over the comparable period in 2012.

 

Adjusted FFO for the three months ended March 31, 2013, increased $15.5 million to $44.1 million, representing a 54.5% increase over the comparable period in 2012.  Adjusted FFO per diluted share and unit for the three months ended March 31, 2013, was $0.41 based on the Company’s diluted weighted-average shares and units outstanding of 108.3 million.

 

Net income attributable to common shareholders for the three months ended March 31, 2013, was $8.5 million, compared to a loss of $6.5 million in the comparable period in 2012.

 

Net cash flow from operating activities for the three months ended March 31, 2013, totaled $34.0 million compared to $10.5 million for the comparable period in 2012.

 

Capital Expenditures

 

In 2013, the Company expects to initiate renovation projects at 25 hotels for approximately $40.0 million to $45.0 million.  The majority of these projects are scheduled to be renovated in the fourth quarter.

 

Acquisitions

 

On March 19, 2013, the Company acquired the historic Humble Oil Building complex in downtown Houston, for a purchase price of $79.5 million, or approximately $151,000 per key based on a combined forward room count of 528 keys. The Humble Oil Building is a three-tower complex that occupies an entire city block. The complex consists of an 82-unit apartment tower that will be converted to a 166-room SpringHill Suites and two existing hotels, the existing 191-room Courtyard Houston Downtown Convention Center and the 171-room Residence Inn Houston Downtown Convention Center. The purchase price represents a forward capitalization rate of approximately 10.1% for the Courtyard and 9.5% for the Residence Inn based on each hotel’s projected 2013 net operating income and applicable purchase price allocation.

 

The acquisition was funded through the Company’s revolving credit facility, which was subsequently repaid with proceeds from the Company’s equity offering.

 

Balance Sheet and Capital Structure

 

On March 25, 2013, the Company completed its underwritten public offering of 15,870,000 common shares at a public offering price of $21.60 per share.  The total shares include 2,070,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional common shares.  Net proceeds from the public offering after deducting the underwriting discount and other offering costs were approximately $327.7 million. The Company used funds from its equity raise to repay funds borrowed under the revolving credit facility for the Humble Oil Building acquisition.  The Company intends to use the remaining net proceeds from the offering to fund future acquisitions and for general corporate purposes.

 

As of March 31, 2013, the Company had $347.0 million of unrestricted cash on its balance sheet and $300.0 million available on its unsecured revolving credit facility.  The Company had $1.4 billion of outstanding debt.  The Company’s ratio of net debt to Adjusted EBITDA for the trailing twelve month period was 3.6 times.

 

2



 

Dividends

 

The Company’s Board of Trustees declared a cash dividend of $0.205 per common share of beneficial interest in the first quarter.  The dividend was paid on April 15, 2013, to shareholders of record as of March 28, 2013.

 

2013 Outlook

 

Based on the Company’s recent acquisition and first quarter performance, the Company is increasing its 2013 outlook.  The outlook excludes potential future acquisitions and dispositions, which could result in a material change to the Company’s outlook.  The 2013 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 prior owner results and assume that the Company owned its 147 hotels since January 1, 2012.  Pro forma Consolidated Hotel EBITDA includes approximately $1.7 million of prior ownership Hotel EBITDA from the two recent hotel acquisitions acquired in the first quarter that will not be included in the Company’s corporate Adjusted EBITDA or Adjusted FFO.  For the full year 2013, the Company anticipates:

 

 

 

Current Outlook

 

Prior Outlook

Pro forma RevPAR growth (1)

 

6.0% to 8.0%

 

5.5% to 7.5%

Pro forma Hotel EBITDA Margin (1)

 

34.0% to 35.0%

 

34.0% to 35.0%

Pro forma Consolidated Hotel EBITDA

 

$

320.0M to $340.0M

 

$

310.0M to $330.0M

Corporate cash general and administrative expenses

 

$

23.5M to $24.5M

 

$

23.5M to $24.5M

 


(1)         Pro forma RevPAR growth and Pro forma Hotel EBITDA Margin exclude one non-comparable hotel, Hotel Indigo New Orleans Garden District, which was closed and under renovation for most of 2012.

 

Earnings Call

 

The Company will conduct its quarterly analyst and investor conference call on May 9, 2013, at 10:00 a.m. (Eastern Time).  The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 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 148 properties, comprised of 147 hotels with approximately 22,000 rooms and one planned hotel conversion, located in 21 states and the District of Columbia.

 

3



 

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,” “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 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 urge 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

 

4



 

RLJ Lodging Trust

Non-GAAP Definitions

 

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 the Company’s 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 the Company’s 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 (“NAREIT”), which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, items classified by GAAP as extraordinary, 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 by excluding the effect of depreciation and amortization, gains or losses from sales for real estate, extraordinary items and the portion of items related to unconsolidated entities, all of which are based on historical cost accounting, and that FFO 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 the Company’s OP units, because the Company’s OP units are redeemable for common shares.  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 sale of assets, and (3) depreciation and amortization. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of the Company’s operating performance between periods and between REITs by removing the impact of the Company’s capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from the Company’s 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 the Company’s OP units, because the Company’s OP units are redeemable for common shares.  The Company believes it is meaningful for the investor to understand EBITDA attributable to all common shares and OP units.

 

5



 

Hotel EBITDA

 

With respect to Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses, non-cash items, and the portion of these items related to unconsolidated entities, 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 on the ongoing operational performance of the Company’s hotels and effectiveness of the third-party management companies operating the Company’s business on a property-level basis.

 

Pro forma Hotel EBITDA includes hotel results from prior ownership periods and excludes non-comparable hotels which were not open for operation or closed for renovations for comparable periods.  Pro forma Consolidated Hotel EBITDA includes hotel results from prior ownership periods and includes non-comparable hotels which were not open for operation or closed for renovations for comparable periods.

 

Adjustments to EBITDA and FFO

 

The Company adjusts FFO and EBITDA for items that the Company considers outside the normal course of business.  The Company believes that these adjustments provide investors with another financial measure that may facilitate comparisons of operating performance between periods and between REITs. The Company believes that the exclusion of certain additional recurring and non-recurring items when combined with GAAP net income, EBITDA and FFO, are beneficial to an investor’s complete understanding of the Company’s operating performance. The Company adjusts EBITDA and FFO 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.

·                  Other 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.  In 2013 and 2012, the Company excluded the amortization of share based compensation.

·                  Non-recurring expenses: The Company excludes the effect of certain non-customary expenses because it believes they do not reflect the underlying performance of the Company.  In 2013, the Company excluded legal expenses it considered outside the normal course of business.

 

6



 

RLJ Lodging Trust

Combined Consolidated Balance Sheets

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

 

 

 

March 31,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Investment in hotel and other properties, net

 

$

3,136,597

 

$

3,073,483

 

Investment in loans

 

12,386

 

12,426

 

Cash and cash equivalents

 

347,027

 

115,861

 

Restricted cash reserves

 

64,008

 

64,787

 

Hotel and other receivables, net of allowance of $232 and $194, respectively

 

28,390

 

22,738

 

Deferred financing costs, net

 

10,418

 

11,131

 

Deferred income tax asset

 

2,292

 

2,206

 

Purchase deposits

 

7,936

 

9,910

 

Prepaid expense and other assets

 

28,566

 

33,843

 

Total Assets

 

$

3,637,620

 

$

3,346,385

 

Liabilities and Equity

 

 

 

 

 

Borrowings under revolving credit facility

 

$

 

$

16,000

 

Mortgage loans

 

994,073

 

997,651

 

Term loans

 

400,000

 

400,000

 

Interest rate swap liability

 

816

 

470

 

Accounts payable and accrued expense

 

76,922

 

87,105

 

Deferred income tax liability

 

4,052

 

4,064

 

Advance deposits and deferred revenue

 

12,898

 

8,508

 

Accrued interest

 

2,403

 

2,284

 

Distributions payable

 

25,917

 

22,392

 

Total Liabilities

 

1,517,081

 

1,538,474

 

 

 

 

 

 

 

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, 2013 and December 31, 2012, respectively.

 

 

 

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 122,733,573 and 106,565,516 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively.

 

1,227

 

1,066

 

Additional paid-in-capital

 

2,171,357

 

1,841,449

 

Accumulated other comprehensive loss

 

(477

)

 

Distributions in excess of net earnings

 

(69,552

)

(52,681

)

Total shareholders’ equity

 

2,102,555

 

1,789,834

 

 

 

 

 

 

 

Noncontrolling interest

 

 

 

 

 

Noncontrolling interest in joint venture

 

6,718

 

6,766

 

Noncontrolling interest in Operating Partnership

 

11,266

 

11,311

 

Total noncontrolling interest

 

17,984

 

18,077

 

Total Equity

 

2,120,539

 

1,807,911

 

Total Liabilities and Equity

 

$

3,637,620

 

$

3,346,385

 

 

7



 

RLJ Lodging Trust

Combined Consolidated Statements of Operations

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

 

 

 

For the three months ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Revenue

 

 

 

 

 

Operating revenue

 

 

 

 

 

Room revenue

 

$

186,427

 

$

158,579

 

Food and beverage revenue

 

23,232

 

19,505

 

Other operating department revenue

 

6,228

 

5,109

 

Total revenue

 

215,887

 

183,193

 

Expense

 

 

 

 

 

Operating expense

 

 

 

 

 

Room expense

 

43,397

 

36,930

 

Food and beverage expense

 

16,577

 

14,440

 

Management fee expense

 

7,419

 

6,304

 

Other operating expense

 

66,900

 

58,558

 

Total property operating expense

 

134,293

 

116,232

 

Depreciation and amortization

 

31,435

 

33,697

 

Property tax, insurance and other

 

14,786

 

12,634

 

General and administrative

 

8,815

 

7,260

 

Transaction and pursuit costs

 

1,089

 

19

 

Total operating expense

 

190,418

 

169,842

 

Operating income

 

25,469

 

13,351

 

Other income

 

79

 

84

 

Interest income

 

296

 

419

 

Interest expense

 

(17,034

)

(20,181

)

 

 

 

 

 

 

Income (loss) before income taxes

 

8,810

 

(6,327

)

 

 

 

 

 

 

Income tax expense

 

(226

)

(594

)

 

 

 

 

 

 

Net income (loss)

 

8,584

 

(6,921

)

 

 

 

 

 

 

Net (income) loss attributable to non-controlling interests

 

 

 

 

 

Noncontrolling interest in joint venture

 

48

 

370

 

Noncontrolling interest in common units of Operating Partnership

 

(139

)

38

 

Net income (loss) attributable to common shareholders

 

$

8,493

 

$

(6,513

)

 

 

 

 

 

 

Basic per common share data:

 

 

 

 

 

Net income (loss) per share attributable to common shareholders

 

$

0.08

 

$

(0.06

)

Weighted-average number of common shares

 

106,815,375

 

105,332,812

 

 

 

 

 

 

 

Diluted per common share data:

 

 

 

 

 

Net income (loss) per share attributable to common shareholders

 

$

0.08

 

$

(0.06

)

Weighted-average number of common shares

 

107,423,195

 

105,332,812

 

 

Note:

 

The comprehensive income statement and corresponding footnotes can be found in the Company’s Quarterly Report on Form 10Q.

 

8



 

RLJ Lodging Trust

Reconciliation of Net Income/(Loss) to Non-GAAP Measures

(Amounts in thousands, except per share data)

(Unaudited)

 

Funds From Operations (FFO)

 

 

 

For the three months ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Net income (loss)

 

$

8,584

 

$

(6,921

)

Depreciation and amortization

 

31,435

 

33,697

 

Noncontrolling interest in joint venture

 

48

 

370

 

Adjustments related to joint venture (1)

 

(121

)

(98

)

FFO attributable to common shareholders

 

39,946

 

27,048

 

Transaction and pursuit costs

 

1,089

 

19

 

Amortization of share based compensation

 

3,014

 

1,459

 

Other expenses (2)

 

13

 

 

Adjusted FFO

 

$

44,062

 

$

28,526

 

 

 

 

 

 

 

Adjusted FFO per common share and unit- basic

 

$

0.41

 

$

0.27

 

Adjusted FFO per common share and unit- diluted

 

$

0.41

 

$

0.27

 

 

 

 

 

 

 

Basic weighted-average common shares and units outstanding (3)

 

107,709

 

106,227

 

Diluted weighted-average common shares and units outstanding (3)

 

108,317

 

106,227

 

 


Note:

 

(1)   Includes depreciation and amortization expense allocated to the noncontrolling interest in joint venture.

(2)   Includes less than $0.1 million for the three months ended March 31, 2013, of legal expenses outside the normal course of operations.

(3)   Includes 894,000 operating partnership units.

 

9



 

RLJ Lodging Trust

Reconciliation of Net Income/(Loss) to Non-GAAP Measures

(Amounts in thousands)

(Unaudited)

 

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

 

 

 

For the three months ended

 

 

 

March 31,

 

 

 

2013

 

2012

 

Net income (loss)

 

$

8,584

 

$

(6,921

)

Depreciation and amortization

 

31,435

 

33,697

 

Interest expense, net (1)

 

17,027

 

20,169

 

Income tax expense

 

226

 

594

 

Noncontrolling interest in joint venture

 

48

 

370

 

Adjustments related to joint venture (2)

 

(121

)

(272

)

EBITDA

 

57,199

 

47,637

 

Transaction and pursuit costs

 

1,089

 

19

 

Amortization of share based compensation

 

3,014

 

1,459

 

Other expenses (3)

 

13

 

 

Adjusted EBITDA

 

61,315

 

49,115

 

General and administrative (4)

 

5,801

 

5,801

 

Other income/interest income

 

(368

)

(491

)

Corporate overhead allocated to properties

 

90

 

202

 

Operating results from noncontrolling interest in joint venture

 

73

 

(98

)

Apartment Income

 

(43

)

 

Pro forma hotel adjustments (5)

 

1,735

 

4,230

 

Non-cash amortization (6)

 

301

 

250

 

Pro forma Consolidated Hotel EBITDA

 

68,904

 

59,009

 

Non-comparable hotels (7)

 

(582

)

48

 

Pro forma Hotel EBITDA

 

$

68,322

 

$

59,057

 

 


Note:

 

(1)         Excludes amounts attributable to investment in loans of $0.3 million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively.

(2)         Includes depreciation, amortization and interest expense allocated to the noncontrolling interest in joint venture.

(3)         Includes less than $0.1 million for the three months ended March 31, 2013, of legal expenses outside the normal course of operations.

(4)         General and administrative expenses exclude amortization of share based compensation, which are reflected in Adjusted EBITDA.

(5)         Reflects prior ownership adjustments made for recent acquisitions.

(6)         Non-cash amortization includes the amortization of management and franchise fees.

(7)         The Hotel Indigo New Orleans Garden District was closed most of 2012 due to a conversion upgrade.  It reopened in December 2012 and therefore has been excluded from 2013 and 2012.

 

10



 

RLJ Lodging Trust

Acquisitions

 

2013 Acquisitions

 

Location

 

Acquisition
Date

 

Management Company

 

Rooms

 

Purchase Price
($ in millions)

 

%
Interest

 

Courtyard Houston Downtown

 

Houston, TX

 

Mar 19, 2013

 

Marriott International

 

191

 

$

34.4

 

100

%

Residence Inn Houston Downtown

 

Houston, TX

 

Mar 19, 2013

 

Marriott International

 

171

 

29.5

 

100

%

Humble Tower Apartments (1)

 

Houston, TX

 

Mar 19, 2013

 

The Sterling Group

 

82

 

15.6

 

100

%

Hilton Cabana Miami Beach (2)

 

Miami Beach, FL

 

N/A

 

N/A

 

N/A

 

71.6

 

100

%

Total Acquisitions (3)

 

 

 

 

 

 

 

444

 

$

151.1

 

 

 

 

2012 Acquisitions

 

Location

 

Acquisition
Date

 

Management Company

 

Rooms

 

Purchase Price
($ in millions)

 

%
Interest

 

Residence Inn Bethesda Downtown

 

Bethesda, MD

 

May 29, 2012

 

Marriott International

 

187

 

$

64.5

 

100

%

Courtyard New York Manhattan/Upper East Side

 

New York, NY

 

May 30, 2012

 

Highgate Hotels

 

226

 

82.0

 

100

%

Hilton Garden Inn San Francisco/Oakland Bay Bridge

 

Emeryville, CA

 

Jun 11, 2012

 

Davidson Hotels & Resorts

 

278

 

36.2

 

100

%

Embassy Suites Boston/Waltham

 

Waltham, MA

 

Nov 13, 2012

 

HEI Hotels and Resorts

 

275

 

64.5

 

100

%

Total Acquisitions

 

 

 

 

 

 

 

966

 

$

247.2

 

 

 

 


Note:

(1)         Conversion to a 166-room SpringHill Suites expected to be complete by mid-2015.

(2)         On November 30, 2012, the Company signed a purchase and sale agreement to acquire upon completion the 231-room Hilton Cabana Miami Beach for a fixed purchase price of $71.6 million, or approximately $310,000 per key. The transaction is expected to close in fourth quarter 2013.  No management contract has been signed.

(3)         The 2013 acquisitions in Houston do not reflect a $225,000 credit received at closing. The credit results in a net purchase price of $79.3 million.

 

11



 

RLJ Lodging Trust

Pro forma Operating Statistics — Top 40 Assets

(Amounts in thousands, except rooms)

(Unaudited)

 

For the trailing twelve months ending March 31, 2013

 

Property

 

City/State

 

Rooms

 

Pro forma
Consolidated
Hotel EBITDA

 

DoubleTree Metropolitan

 

New York, NY

 

764

 

$

19,529

 

Marriott Louisville Downtown

 

Louisville, KY

 

616

 

13,386

 

Hilton New York Fashion District

 

New York, NY

 

280

 

11,884

 

Hilton Garden Inn New York

 

New York, NY

 

298

 

11,878

 

Courtyard Austin Downtown

 

Austin, TX

 

270

 

8,247

 

Courtyard Chicago Downtown Mag Mile

 

Chicago, IL

 

306

 

6,983

 

Embassy Suites Tampa Downtown

 

Tampa, FL

 

360

 

6,147

 

Fairfield Inn Washington DC

 

Washington, DC

 

198

 

6,130

 

Renaissance Pittsburgh

 

Pittsburgh, PA

 

300

 

5,359

 

Embassy Suites Waltham

 

Waltham, MA

 

275

 

4,967

 

Marriott Denver South @ Park Meadow

 

Littleton, CO

 

279

 

4,879

 

Courtyard Upper East Side

 

New York, NY

 

226

 

4,680

 

Residence Inn Bethesda

 

Bethesda, MD

 

187

 

4,547

 

Homewood Suites Washington DC

 

Washington, DC

 

175

 

4,539

 

Marriott Denver International Airport

 

Aurora, CO

 

238

 

4,387

 

Residence Inn Austin Downtown

 

Austin, TX

 

179

 

4,046

 

Courtyard Houston Galleria

 

Houston, TX

 

190

 

3,885

 

Residence Inn National Harbor

 

Oxon Hill, MD

 

162

 

3,790

 

Hilton Garden Inn New Orleans Convention Center

 

New Orleans, LA

 

286

 

3,789

 

Renaissance Plantation

 

Plantation, FL

 

250

 

3,779

 

Hilton Garden Inn Emeryville

 

Emeryville, CA

 

278

 

3,740

 

Embassy Suites Downey

 

Downey, CA

 

219

 

3,508

 

Hilton Garden Inn Los Angeles Hollywood

 

Hollywood, CA

 

160

 

3,471

 

Courtyard Houston Downtown

 

Houston, TX

 

191

 

3,437

 

Renaissance Boulder Suites @ Flatiron

 

Broomfield, CO

 

232

 

3,412

 

Hampton Inn Garden City

 

Garden City, NY

 

143

 

3,383

 

Courtyard Charleston Historic District

 

Charleston, SC

 

176

 

3,129

 

Marriott Airport Austin South

 

Austin, TX

 

211

 

2,927

 

Residence Inn Houston Downtown

 

Houston, TX

 

171

 

2,881

 

Residence Inn Galleria

 

Houston, TX

 

146

 

2,863

 

Hilton Garden Inn Bloomington

 

Bloomington, IN

 

168

 

2,851

 

Residence Inn Oakbrook

 

Oak Brook, IL

 

156

 

2,804

 

Hilton Garden Inn Pittsburgh

 

Pittsburgh, PA

 

202

 

2,740

 

Residence Inn Downtown Louisville

 

Louisville, KY

 

140

 

2,691

 

Fairfield Inn & Suites Key West

 

Key West, FL

 

106

 

2,499

 

Hyatt House Dallas Lincoln Park

 

Dallas, TX

 

155

 

2,414

 

Marriott Midway

 

Chicago, IL

 

200

 

2,297

 

Hampton Inn Houston Galleria

 

Houston, TX

 

176

 

2,212

 

Courtyard Buckhead

 

Atlanta, GA

 

181

 

2,174

 

Embassy Suites West Palm Beach

 

West Palm Beach, FL

 

194

 

1,781

 

 

 

 

 

 

 

 

 

Top 40 Assets

 

 

 

9,444

 

194,042

 

Other

 

 

 

12,535

 

120,537

 

Total Portfolio

 

 

 

21,979

 

$

314,580

 

 

Note:

The information above has not been audited and is presented only for comparison purposes.  Results reflect 100% of DoubleTree by Hilton Hotel Metropolitan New York City financial results, which have not been adjusted to reflect the 5% noncontrolling interest in the joint venture.

 

12



 

RLJ Lodging Trust

Pro forma Operating Statistics

 (Unaudited)

 

For the three months ending March 31, 2013

 

 

 

 

 

Occupancy

 

ADR

 

RevPAR

 

% of Hotel
EBITDA

 

Top Markets

 

# of Hotels

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

Q1

 

NYC

 

5

 

95.2

%

68.7

%

38.6

%

$

186.49

 

$

180.69

 

3.2

%

$

177.51

 

$

124.06

 

43.1

%

9

%

Chicago

 

21

 

61.7

%

62.5

%

(1.4

)%

114.48

 

105.93

 

8.1

%

70.62

 

66.25

 

6.6

%

6

%

Austin

 

17

 

76.5

%

74.9

%

2.1

%

151.07

 

140.50

 

7.5

%

115.50

 

105.18

 

9.8

%

17

%

Denver

 

15

 

62.2

%

62.9

%

(1.1

)%

116.56

 

112.33

 

3.8

%

72.49

 

70.67

 

2.6

%

7

%

Louisville

 

5

 

65.7

%

67.7

%

(3.0

)%

138.68

 

129.93

 

6.7

%

91.09

 

88.02

 

3.5

%

7

%

Washington DC

 

7

 

62.1

%

61.1

%

1.6

%

166.69

 

164.15

 

1.5

%

103.46

 

100.33

 

3.1

%

6

%

Other

 

76

 

70.8

%

69.7

%

1.6

%

126.10

 

119.87

 

5.2

%

89.33

 

83.60

 

6.9

%

48

%

Total

 

146

 

70.7

%

68.1

%

3.7

%

$

135.66

 

$

127.20

 

6.7

%

$

95.85

 

$

86.64

 

10.6

%

100

%

 

 

 

 

 

Occupancy

 

ADR

 

RevPAR

 

% of Hotel
EBITDA

 

Service Level

 

# of Hotels

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

Q1

 

Focused Service

 

125

 

69.2

%

68.8

%

0.5

%

$

129.23

 

$

120.70

 

7.1

%

$

89.40

 

$

83.06

 

7.6

%

72

%

Compact Full Service

 

20

 

75.8

%

66.1

%

14.7

%

151.88

 

145.41

 

4.5

%

115.19

 

96.15

 

19.8

%

24

%

Full Service

 

1

 

66.0

%

66.6

%

(0.9

)%

156.76

 

150.86

 

3.9

%

103.40

 

100.42

 

3.0

%

4

%

Total

 

146

 

70.7

%

68.1

%

3.7

%

$

135.66

 

$

127.20

 

6.7

%

$

95.85

 

$

86.64

 

10.6

%

100

%

 

 

 

 

 

Occupancy

 

ADR

 

RevPAR

 

% of Hotel
EBITDA

 

Chain Scale

 

# of Hotels

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

Q1

 

Upper Upscale

 

17

 

72.7

%

71.8

%

1.3

%

$

149.25

 

$

144.14

 

3.6

%

$

108.58

 

$

103.55

 

4.9

%

25

%

Upscale

 

101

 

71.0

%

67.3

%

5.5

%

134.41

 

124.81

 

7.7

%

95.44

 

84.01

 

13.6

%

63

%

Upper Midscale

 

27

 

65.7

%

65.6

%

0.2

%

123.24

 

114.82

 

7.3

%

80.99

 

75.31

 

7.5

%

12

%

Midscale

 

1

 

75.3

%

87.4

%

(13.8

)%

60.43

 

58.30

 

3.7

%

45.53

 

50.97

 

(10.7

)%

0

%

Total

 

146

 

70.7

%

68.1

%

3.7

%

$

135.66

 

$

127.20

 

6.7

%

$

95.85

 

$

86.64

 

10.6

%

100

%

 

 

 

 

 

Occupancy

 

ADR

 

RevPAR

 

% of Hotel
EBITDA

 

Flags

 

# of Hotels

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

2013

 

2012

 

Var

 

Q1

 

Courtyard

 

35

 

67.0

%

66.3

%

1.0

%

$

132.32

 

$

123.68

 

7.0

%

$

88.67

 

$

82.03

 

8.1

%

21

%

Residence Inn

 

35

 

70.6

%

70.6

%

0.0

%

129.16

 

123.07

 

5.0

%

91.18

 

86.87

 

5.0

%

19

%

Fairfield Inn

 

14

 

65.1

%

67.7

%

(3.9

)%

125.11

 

114.39

 

9.4

%

81.39

 

77.44

 

5.1

%

6

%

SpringHill Suites

 

11

 

65.9

%

66.2

%

(0.4

)%

104.53

 

99.74

 

4.8

%

68.91

 

66.04

 

4.3

%

4

%

Hilton Garden Inn

 

10

 

73.4

%

71.1

%

3.1

%

151.99

 

137.53

 

10.5

%

111.50

 

97.82

 

14.0

%

11

%

Hampton Inn

 

9

 

68.4

%

65.5

%

4.4

%

125.80

 

116.84

 

7.7

%

86.07

 

76.58

 

12.4

%

5

%

Marriott

 

6

 

66.3

%

65.8

%

0.8

%

140.93

 

134.73

 

4.6

%

93.46

 

88.68

 

5.4

%

10

%

Hyatt House

 

6

 

78.6

%

76.0

%

3.5

%

106.61

 

100.39

 

6.2

%

83.84

 

76.25

 

10.0

%

4

%

Embassy Suites

 

6

 

78.1

%

77.7

%

0.5

%

151.82

 

146.42

 

3.7

%

118.62

 

113.83

 

4.2

%

9

%

Renaissance

 

3

 

73.5

%

70.3

%

4.6

%

142.59

 

146.53

 

(2.7

)%

104.83

 

103.01

 

1.8

%

4

%

DoubleTree

 

2

 

88.1

%

40.9

%

115.4

%

177.27

 

180.91

 

(2.0

)%

156.22

 

73.99

 

111.1

%

2

%

Homewood Suites

 

2

 

75.0

%

76.3

%

(1.7

)%

161.27

 

155.92

 

3.4

%

120.98

 

118.94

 

1.7

%

2

%

Hilton

 

2

 

80.4

%

80.2

%

0.3

%

179.18

 

164.43

 

9.0

%

144.13

 

131.88

 

9.3

%

2

%

Other

 

5

 

64.3

%

65.1

%

(1.2

)%

99.93

 

97.64

 

2.3

%

64.24

 

63.53

 

1.1

%

1

%

Total

 

146

 

70.7

%

68.1

%

3.7

%

$

135.66

 

$

127.20

 

6.7

%

$

95.85

 

$

86.64

 

10.6

%

100

%

 

Note:

The information above has not been audited and is presented only for comparison purposes.  Results reflect 100% of DoubleTree by Hilton Hotel Metropolitan New York City financial results, which have not been adjusted to reflect the 5% noncontrolling interest in the joint venture.  All results exclude non-comparable hotels, the Hotel Indigo New Orleans Garden District was closed most of 2012 due to a conversion upgrade.  It reopened in December 2012 and therefore has been excluded from 2013 and 2012.

 

13