RLJ RLJ Lodging Trust

Q2 RevPAR increased 2.6% above 2023

Acquired a boutique lifestyle hotel in Denver

Announced increase of quarterly dividend to $0.15 per share

RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and six months ended June 30, 2024.

Second Quarter Highlights

• Portfolio Comparable RevPAR of $157.30; an increase of 2.6% from last year
• Total Revenue of $369.3 million; an increase of 3.5% from last year
• Net Income of $37.3 million
• Comparable Hotel EBITDA of $118.6 million
• Adjusted EBITDA of $109.0 million
• Adjusted FFO per diluted common share and unit of $0.51
• Acquired Hotel Teatro in Denver for $35.5 million
• Repurchased 0.3 million shares for approximately $3.1 million at an average price of $9.72
• Addressed 2024 debt maturities

“We were encouraged to see industry RevPAR growth improve during the second quarter despite a choppy backdrop. Relative to this environment, we were pleased with our solid second quarter performance, which was driven by strong gains in a number of our urban markets that benefitted from growth in business and group segments,” commented Leslie D. Hale, President and Chief Executive Officer. “Additionally, we were active on multiple fronts including, acquiring a high-quality boutique lifestyle hotel in Denver, progressing on our 2024 conversions, and repurchasing shares while increasing our quarterly dividend. Our strong execution of these initiatives once again demonstrates the optionality our strong balance sheet provides to drive multiple channels of growth simultaneously."

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

 

Financial and Operating Highlights

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

(unaudited)

 

 

For the three months ended June 30,

For the six months ended June 30,

 

2024

2023

Change

2024

2023

Change

Operational Overview: (1)

 

 

 

 

 

 

Comparable ADR

$205.20

$204.05

0.6%

$202.26

$201.83

0.2%

Comparable Occupancy

76.7%

75.1%

2.1%

73.0%

71.8%

1.6%

Comparable RevPAR

$157.30

$153.26

2.6%

$147.61

$144.95

1.8%

 

 

 

 

 

 

 

Financial Overview:

 

 

 

 

 

 

Total Revenue

$369,297

$356,960

3.5%

$693,707

$671,463

3.3%

Comparable Hotel Revenue

$371,027

$358,880

3.4%

$696,505

$674,589

3.2%

 

 

 

 

 

 

 

Net Income

$37,291

$41,720

(10.6)%

$42,037

$52,234

(19.5)%

 

 

 

 

 

 

 

Comparable Hotel EBITDA

$118,639

$123,532

(4.0)%

$207,432

$214,577

(3.3)%

Comparable Hotel EBITDA Margin

32.0%

34.4%

(245) bps

29.8%

31.8%

(203) bps

Adjusted EBITDA

$108,971

$113,829

(4.3)%

$188,563

$196,513

(4.0)%

 

 

 

 

 

 

 

Adjusted FFO

$78,619

$87,836

(10.5)%

$130,473

$143,916

(9.3)%

Adjusted FFO Per Diluted Common Share and Unit

$0.51

$0.56

(8.9)%

$0.84

$0.90

(6.7)%

Note:

(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of June 30, 2024.

Acquisitions and Dispositions

During the second quarter of 2024, the Company purchased the 110-room Hotel Teatro in Denver, Colorado for a purchase price of $35.5 million. The hotel is expected to generate an estimated 10% yield upon stabilization. Additionally, the Company sold a non-core 78-room Residence Inn hotel located in Indiana for a sales price of $8.1 million.

Share Repurchases

During the second quarter, the Company recycled proceeds from the sale of a non-core hotel to repurchase common shares. During the second quarter, the Company repurchased 0.3 million common shares for approximately $3.1 million at an average price of $9.72. Year-to-date, the Company has repurchased 0.5 million common shares for approximately $5.0 million at an average price of $9.66. As of August 1, the Company's 2024 share repurchase program had a remaining capacity of $245.0 million.

Balance Sheet

As of June 30, 2024, the Company had approximately $771.1 million of total liquidity, comprising approximately $371.1 million of unrestricted cash and $400.0 million available under its revolving credit facility, and $2.2 billion of debt outstanding.

In April 2024, the Company drew $200.0 million under its $600.0 million revolving credit facility and utilized the proceeds to repay $200.0 million of maturing mortgage debt.

In April 2024, the Company exercised its one-year extension options to extend the maturities of $181.0 million of mortgage loans to April 2025.

Dividends

The Company’s Board of Trustees declared a second quarter cash dividend of $0.10 per common share of beneficial interest of the Company. The dividend was paid on July 15, 2024 to shareholders of record as of June 28, 2024.

The Company's Board of Trustees declared a second quarter cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on July 31, 2024 to shareholders of record as of June 28, 2024.

In July, the Company's Board of Trustees approved an increase to its quarterly cash dividend to $0.15 per common share of beneficial interest of the Company starting with the third quarter of 2024. The Dividend will be paid on October 15, 2024 to shareholders of record as of September 30, 2024.

Outlook Update

The Company is updating its full-year outlook range to incorporate recent transactions, year-to-date operating performance, and the current economic environment. 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.

 

FY 2024

Comparable RevPAR Growth

1.0% to 2.5%

Comparable Hotel EBITDA

$382.5M to $402.5M

Adjusted EBITDA

$346.5M to $366.5M

Adjusted FFO per diluted share

$1.45 to $1.58

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

• Net interest expense of $93.0 million to $95.0 million.
• Capital expenditures related to renovations in the range of $100.0 million to $120.0 million.
• Diluted weighted average common shares and units of 155.0 million.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on August 2, 2024 at 10:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust’s second quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company’s website for two weeks.

Supplemental Information

Please refer to the presentation of supplemental information for additional detail and comparable operating statistics, which will be available through the Investor Relations section of the Company's website.

About Us

RLJ Lodging Trust ("RLJ") is a self-advised, publicly traded real estate investment trust that owns 96 premium-branded, rooms-oriented, high-margin, urban-centric hotels located within the heart of demand locations. Our hotels are geographically diverse and concentrated in major urban markets that provide multiple demand generators from business, leisure, and other travelers.

Forward-Looking Statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” “may,” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled “Risk Factors,” “Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which will be filed on August 2, 2024, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

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

RLJ Lodging Trust Non-GAAP and Accounting Commentary

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

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

Funds From Operations (“FFO”)

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

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

EBITDA and EBITDAre

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

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

Adjustments to FFO and EBITDA

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

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

Hotel EBITDA and Hotel EBITDA Margin

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

Comparable Hotel EBITDA and Comparable Hotel EBITDA margin include prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels and excludes results from sold hotels as applicable.

Comparable adjustments: Acquired hotel

For the three and six months ended June 30, 2024 and 2023, Comparable adjustments included the following acquired hotel:

• Hotel Teatro acquired in June 2024

Comparable adjustments: Sold hotel

For the three and six months ended June 30, 2024 and 2023, Comparable adjustments included the following sold hotel:

• Residence Inn Merrillville sold in May 2024

 

RLJ Lodging Trust

Consolidated Balance Sheets

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

(unaudited)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Investment in hotel properties, net

$

4,274,669

 

 

$

4,136,216

 

Investment in unconsolidated joint ventures

 

7,386

 

 

 

7,398

 

Cash and cash equivalents

 

371,133

 

 

 

516,675

 

Restricted cash reserves

 

36,081

 

 

 

38,652

 

Hotel and other receivables, net of allowance of $369 and $265, respectively

 

30,916

 

 

 

26,163

 

Lease right-of-use assets

 

130,875

 

 

 

136,140

 

Prepaid expense and other assets

 

66,967

 

 

 

58,051

 

Total assets

$

4,918,027

 

 

$

4,919,295

 

Liabilities and Equity

 

 

 

Debt, net

$

2,222,642

 

 

$

2,220,778

 

Accounts payable and other liabilities

 

149,682

 

 

 

147,819

 

Advance deposits and deferred revenue

 

33,475

 

 

 

32,281

 

Lease liabilities

 

119,902

 

 

 

122,588

 

Accrued interest

 

21,934

 

 

 

22,539

 

Distributions payable

 

22,621

 

 

 

22,500

 

Total liabilities

 

2,570,256

 

 

 

2,568,505

 

Equity

 

 

 

Shareholders’ equity:

 

 

 

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

 

 

 

Series A Cumulative Convertible Preferred Shares, $0.01 par value, 12,950,000 shares authorized; 12,879,475 shares issued and outstanding, liquidation value of $328,266, at June 30, 2024 and December 31, 2023

 

366,936

 

 

 

366,936

 

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 155,240,677 and 155,297,829 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

 

1,552

 

 

 

1,553

 

Additional paid-in capital

 

3,000,394

 

 

 

3,000,894

 

Distributions in excess of net earnings

 

(1,057,061

)

 

 

(1,055,183

)

Accumulated other comprehensive income

 

22,171

 

 

 

22,662

 

Total shareholders’ equity

 

2,333,992

 

 

 

2,336,862

 

Noncontrolling interests:

 

 

 

Noncontrolling interest in the Operating Partnership

 

6,318

 

 

 

6,294

 

Noncontrolling interest in consolidated joint ventures

 

7,461

 

 

 

7,634

 

Total noncontrolling interest

 

13,779

 

 

 

13,928

 

Total equity

 

2,347,771

 

 

 

2,350,790

 

Total liabilities and equity

$

4,918,027

 

 

$

4,919,295

 

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

 

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)

 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

 

Room revenue

$

303,652

 

 

$

295,496

 

 

$

570,282

 

 

$

556,328

 

Food and beverage revenue

 

40,843

 

 

 

38,132

 

 

 

76,532

 

 

 

71,420

 

Other revenue

 

24,802

 

 

 

23,332

 

 

 

46,893

 

 

 

43,715

 

Total revenues

 

369,297

 

 

 

356,960

 

 

 

693,707

 

 

 

671,463

 

Expenses

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Room expense

 

73,941

 

 

 

70,333

 

 

 

143,327

 

 

 

136,384

 

Food and beverage expense

 

30,304

 

 

 

28,037

 

 

 

58,931

 

 

 

54,174

 

Management and franchise fee expense

 

29,789

 

 

 

29,277

 

 

 

55,444

 

 

 

55,459

 

Other operating expenses

 

90,792

 

 

 

84,207

 

 

 

180,601

 

 

 

166,831

 

Total property operating expenses

 

224,826

 

 

 

211,854

 

 

 

438,303

 

 

 

412,848

 

Depreciation and amortization

 

44,474

 

 

 

44,925

 

 

 

89,153

 

 

 

89,921

 

Property tax, insurance and other

 

28,753

 

 

 

24,684

 

 

 

56,587

 

 

 

49,332

 

General and administrative

 

13,940

 

 

 

14,627

 

 

 

29,045

 

 

 

28,283

 

Transaction costs

 

76

 

 

 

4

 

 

 

90

 

 

 

24

 

Total operating expenses

 

312,069

 

 

 

296,094

 

 

 

613,178

 

 

 

580,408

 

Other income, net

 

687

 

 

 

736

 

 

 

3,878

 

 

 

1,585

 

Interest income

 

4,118

 

 

 

5,011

 

 

 

8,905

 

 

 

8,675

 

Interest expense

 

(28,049

)

 

 

(24,543

)

 

 

(54,507

)

 

 

(48,673

)

Gain (loss) on sale of hotel properties, net

 

3,546

 

 

 

(44

)

 

 

3,546

 

 

 

(44

)

Loss on extinguishment of indebtedness, net

 

—

 

 

 

(169

)

 

 

—

 

 

 

(169

)

Income before equity in income from unconsolidated joint ventures

 

37,530

 

 

 

41,857

 

 

 

42,351

 

 

 

52,429

 

Equity in income from unconsolidated joint ventures

 

154

 

 

 

220

 

 

 

388

 

 

 

501

 

Income before income tax expense

 

37,684

 

 

 

42,077

 

 

 

42,739

 

 

 

52,930

 

Income tax expense

 

(393

)

 

 

(357

)

 

 

(702

)

 

 

(696

)

Net income

 

37,291

 

 

 

41,720

 

 

 

42,037

 

 

 

52,234

 

Net (income) loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

Noncontrolling interest in the Operating Partnership

 

(169

)

 

 

(171

)

 

 

(167

)

 

 

(188

)

Noncontrolling interest in consolidated joint ventures

 

(16

)

 

 

(154

)

 

 

173

 

 

 

(6

)

Net income attributable to RLJ

 

37,106

 

 

 

41,395

 

 

 

42,043

 

 

 

52,040

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(12,557

)

 

 

(12,557

)

Net income attributable to common shareholders

$

30,827

 

 

$

35,116

 

 

$

29,486

 

 

$

39,483

 

Basic per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders - basic

$

0.20

 

 

$

0.22

 

 

$

0.19

 

 

$

0.25

 

Weighted-average number of common shares

 

153,641,065

 

 

 

156,424,444

 

 

 

153,305,640

 

 

 

157,945,406

 

Diluted per common share data:

 

 

 

 

 

 

 

Net income per share attributable to common shareholders - diluted

$

0.20

 

 

$

0.22

 

 

$

0.19

 

 

$

0.25

 

Weighted-average number of common shares

 

154,105,871

 

 

 

156,741,187

 

 

 

154,151,135

 

 

 

158,381,380

 

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

 

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

 

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

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income

$

37,291

 

 

$

41,720

 

 

$

42,037

 

 

$

52,234

 

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(12,557

)

 

 

(12,557

)

Depreciation and amortization

 

44,474

 

 

 

44,925

 

 

 

89,153

 

 

 

89,921

 

(Gain) loss on sale of hotel properties, net

 

(3,546

)

 

 

44

 

 

 

(3,546

)

 

 

44

 

Noncontrolling interest in consolidated joint ventures

 

(16

)

 

 

(154

)

 

 

173

 

 

 

(6

)

Adjustments related to consolidated joint venture (1)

 

(47

)

 

 

(44

)

 

 

(92

)

 

 

(87

)

Adjustments related to unconsolidated joint venture (2)

 

228

 

 

 

236

 

 

 

457

 

 

 

473

 

FFO

 

72,105

 

 

 

80,448

 

 

 

115,625

 

 

 

130,022

 

Transaction costs

 

76

 

 

 

4

 

 

 

90

 

 

 

24

 

Pre-opening costs (3)

 

125

 

 

 

639

 

 

 

199

 

 

 

860

 

Loss on extinguishment of indebtedness, net

 

—

 

 

 

169

 

 

 

—

 

 

 

169

 

Amortization of share-based compensation

 

5,275

 

 

 

6,089

 

 

 

11,708

 

 

 

11,781

 

Non-cash interest expense related to discontinued interest rate hedges

 

418

 

 

 

482

 

 

 

900

 

 

 

964

 

Other expenses (4)

 

620

 

 

 

5

 

 

 

1,951

 

 

 

96

 

Adjusted FFO

$

78,619

 

 

$

87,836

 

 

$

130,473

 

 

$

143,916

 

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit-basic

$

0.51

 

 

$

0.56

 

 

$

0.85

 

 

$

0.91

 

Adjusted FFO per common share and unit-diluted

$

0.51

 

 

$

0.56

 

 

$

0.84

 

 

$

0.90

 

 

 

 

 

 

 

 

 

Basic weighted-average common shares and units outstanding (5)

 

154,413

 

 

 

157,196

 

 

 

154,077

 

 

 

158,717

 

Diluted weighted-average common shares and units outstanding (5)

 

154,878

 

 

 

157,513

 

 

 

154,923

 

 

 

159,153

 

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)

Represents expenses and income outside of the normal course of operations.

(5)

Includes 0.8 million weighted-average operating partnership units for the three and six month periods ended June 30, 2024 and 2023.

 

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

 

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

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income

$

37,291

 

 

$

41,720

 

 

$

42,037

 

 

$

52,234

 

Depreciation and amortization

 

44,474

 

 

 

44,925

 

 

 

89,153

 

 

 

89,921

 

Interest expense, net of interest income

 

23,931

 

 

 

19,532

 

 

 

45,602

 

 

 

39,998

 

Income tax expense

 

393

 

 

 

357

 

 

 

702

 

 

 

696

 

Adjustments related to unconsolidated joint venture (1)

 

332

 

 

 

345

 

 

 

667

 

 

 

690

 

EBITDA

 

106,421

 

 

 

106,879

 

 

 

178,161

 

 

 

183,539

 

(Gain) loss on sale of hotel properties, net

 

(3,546

)

 

 

44

 

 

 

(3,546

)

 

 

44

 

EBITDAre

 

102,875

 

 

 

106,923

 

 

 

174,615

 

 

 

183,583

 

Transaction costs

 

76

 

 

 

4

 

 

 

90

 

 

 

24

 

Pre-opening costs (2)

 

125

 

 

 

639

 

 

 

199

 

 

 

860

 

Loss on extinguishment of indebtedness, net

 

—

 

 

 

169

 

 

 

—

 

 

 

169

 

Amortization of share-based compensation

 

5,275

 

 

 

6,089

 

 

 

11,708

 

 

 

11,781

 

Other expenses (3)

 

620

 

 

 

5

 

 

 

1,951

 

 

 

96

 

Adjusted EBITDA

 

108,971

 

 

 

113,829

 

 

 

188,563

 

 

 

196,513

 

General and administrative

 

8,665

 

 

 

8,538

 

 

 

17,337

 

 

 

16,502

 

Other corporate adjustments

 

691

 

 

 

666

 

 

 

1,358

 

 

 

1,137

 

Consolidated Hotel EBITDA

 

118,327

 

 

 

123,033

 

 

 

207,258

 

 

 

214,152

 

Comparable adjustments - income from sold hotels

 

(162

)

 

 

(558

)

 

 

(352

)

 

 

(918

)

Comparable adjustments - income from acquired hotels

 

474

 

 

 

1,057

 

 

 

525

 

 

 

1,343

 

Comparable Hotel EBITDA

$

118,639

 

 

$

123,532

 

 

$

207,432

 

 

$

214,577

 

Notes:

(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)

Represents expenses and income outside of the normal course of operations.

 

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands except margin data)

(unaudited)

 

Comparable Hotel EBITDA Margin

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Total revenue

$

369,297

 

 

$

356,960

 

 

$

693,707

 

 

$

671,463

 

Comparable adjustments - revenue from sold hotels

 

(359

)

 

 

(866

)

 

 

(1,001

)

 

 

(1,487

)

Comparable adjustments - revenue from prior ownership of acquired hotels

 

2,107

 

 

 

2,806

 

 

 

3,834

 

 

 

4,649

 

Other corporate adjustments / non-hotel revenue

 

(18

)

 

 

(21

)

 

 

(35

)

 

 

(36

)

Comparable Hotel Revenue

$

371,027

 

 

$

358,880

 

 

$

696,505

 

 

$

674,589

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA

$

118,639

 

 

$

123,532

 

 

$

207,432

 

 

$

214,577

 

 

 

 

 

 

 

 

 

Comparable Hotel EBITDA Margin

 

32.0

%

 

 

34.4

%

 

 

29.8

%

 

 

31.8

%

 

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures - Full-Year Outlook

(Amounts in millions)

(unaudited)

 

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

 

For the year ended December 31, 2024

 

Low End

 

High End

Net income

$

44.0

 

 

$

62.0

 

Depreciation and amortization

 

187.0

 

 

 

187.0

 

Interest expense, net of interest income

 

93.0

 

 

 

95.0

 

Income tax expense

 

1.5

 

 

 

1.5

 

Adjustments related to joint ventures

 

1.5

 

 

 

1.5

 

EBITDA

 

327.0

 

 

 

347.0

 

Gain on sale of hotel properties, net

 

(3.5

)

 

 

(3.5

)

EBITDAre

 

323.5

 

 

 

343.5

 

Amortization of share-based compensation

 

21.0

 

 

 

21.0

 

All other items, net

 

2.0

 

 

 

2.0

 

Adjusted EBITDA

 

346.5

 

 

 

366.5

 

General and administrative

 

36.0

 

 

 

36.0

 

Consolidated Hotel EBITDA

 

382.5

 

 

 

402.5

 

Comparable adjustments - income from sold hotels

 

(0.5

)

 

 

(0.5

)

Comparable adjustments - income from acquired hotels

 

0.5

 

 

 

0.5

 

Comparable Hotel EBITDA

$

382.5

 

 

$

402.5

 

 

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

 

For the year ended December 31, 2024

 

Low End

 

High End

Net income

$

44.0

 

 

$

62.0

 

Preferred dividends

 

(25.0

)

 

 

(25.0

)

Depreciation and amortization

 

187.0

 

 

 

187.0

 

Gain on sale of hotel properties, net

 

(3.5

)

 

 

(3.5

)

Adjustments related to joint ventures

 

1.0

 

 

 

1.0

 

FFO

 

203.5

 

 

 

221.5

 

Amortization of share-based compensation

 

21.0

 

 

 

21.0

 

All other items, net

 

1.0

 

 

 

3.0

 

Adjusted FFO

$

225.5

 

 

$

245.5

 

 

 

 

 

Adjusted FFO per common share and unit-diluted

$

1.45

 

 

$

1.58

 

 

 

 

 

Diluted weighted-average common shares and units outstanding

 

155.0

 

 

 

155.0

 

 

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands except interest data)

(unaudited)

 

Loan

Base Term

(Years)

Maturity

(incl. extensions)

Floating / Fixed (1)

Interest Rate (2)

 

Balance as of

June 30, 2024 (3)

Mortgage Debt

 

 

 

 

 

 

Mortgage loan - 1 hotel

10

Jan 2029

Fixed

5.06%

 

$

25,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating

5.04%

 

 

96,000

 

Mortgage loan - 4 hotels

5

Apr 2026

Floating

5.61%

 

 

85,000

 

Weighted Average / Mortgage Total

 

 

 

5.28%

 

$

206,000

 

 

 

 

 

 

 

 

Corporate Debt

 

 

 

 

 

 

Revolver (4)

4

May 2028

Floating

7.09%

 

$

200,000

 

$225 Million Term Loan Maturing 2026

3

May 2028

Floating

4.07%

 

 

225,000

 

$200 Million Term Loan Maturing 2026

3

January 2028

Floating

7.04%

 

 

200,000

 

$400 Million Term Loan Maturing 2025

5

May 2025

Floating

4.72%

 

 

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

 

 

 

4.69%

 

$

2,025,000

 

 

 

 

 

 

 

 

Weighted Average / Total

 

 

 

4.75%

 

$

2,231,000

 

Notes:

(1)

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

(2)

Interest rates as of June 30, 2024, inclusive of the impact of interest rate hedges.

(3)

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

(4)

As of June 30, 2024, there was $400.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually. In April 2024, the Company borrowed $200.0 million under the Revolver and utilized the proceeds to repay a $200.0 million maturing mortgage loan, reducing the remaining capacity on the Revolver to $400.0 million.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801568739/en/

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