Company Announcements

RLJ Lodging Trust Reports Second Quarter 2022 Results

- Acquired a boutique lifestyle hotel in Nashville
- Increased quarterly dividend to $0.05 per common share
- Successfully exited covenant waivers
- Repurchased common shares

BETHESDA, Md.--(BUSINESS WIRE)--Aug. 4, 2022-- RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and six months ended June 30, 2022.

Highlights

  • Pro forma RevPAR of $146.05 for Q2; representing 92% of 2019 levels, improving 36% from Q1
  • Total revenue of $330.5 million
  • Net income attributable to common shareholders of $26.7 million
  • Net income per basic and diluted share attributable to common shareholders of $0.16
  • Pro forma Hotel EBITDA of $118.6 million
  • Adjusted EBITDA of $111.0 million
  • Adjusted FFO per basic and diluted common share and unit of $0.49
  • Repurchased 4.2 million common shares for $50.0 million with proceeds from asset sales
  • Increased quarterly cash dividend to $0.05 per common share
  • Acquired a boutique lifestyle hotel in Nashville in July for $59.0 million
  • Successfully exited the covenant waiver period under corporate credit facilities
  • Maintained a strong balance sheet with approximately $1.1 billion of liquidity, including $511.5 million of unrestricted cash

“Our second quarter results significantly outperformed our expectations, led by the performance of our urban markets, which were the major beneficiary of strengthening business travel and greater citywide attendance, that drove outsized growth during the weekdays, in addition to robust leisure demand. The surge of demand in our urban markets drove our results to sequentially improve each month of the quarter, which continued into July,” commented Leslie D. Hale, President and Chief Executive Officer. “Against this improving backdrop, our strong balance sheet allowed us to execute multiple capital allocation initiatives, including advancing our three 2022 conversions, accretively recycling capital into share repurchases, and acquiring a high-quality boutique lifestyle hotel in downtown Nashville. Our accelerating performance allowed us to exit our covenant waivers, and our confidence in the sustainability of our cash flows enabled us to meaningfully increase our dividend.”

The prefix “pro forma” as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Pro forma RevPAR and pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude any hotels sold during the period and non-comparable hotels that were not open for operation or were closed for renovation for comparable periods. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.

Financial and Operating Highlights

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

(unaudited)

 
 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

2022

2021

 

2022

2021

Operational Overview: (1)

 

 

 

 

 

Pro forma ADR

$195.64

$143.07

 

$186.66

$133.26

Pro forma Occupancy

74.7%

59.7%

 

67.9%

52.0%

Pro forma RevPAR

$146.05

$85.41

 

$126.83

$69.27

 

 

 

 

 

 

Financial Overview:

 

 

 

 

 

Total Revenues

$330,501

$194,254

 

$573,400

$313,806

Pro forma Hotel Revenue

$330,367

$191,660

 

$571,031

$308,839

 

 

 

 

 

 

Net Income (Loss)

$33,202

($52,221)

 

$17,732

($131,339)

 

 

 

 

 

 

Pro forma Hotel EBITDA (2)

$118,556

$52,268

 

$181,742

$67,272

Pro forma Hotel EBITDA Margin

35.9%

27.3%

 

31.8%

21.8%

Adjusted EBITDA

$110,978

$43,560

 

$165,570

$47,151

 

 

 

 

 

 

Adjusted FFO

$80,999

$11,295

 

$104,892

($18,472)

Adjusted FFO Per Basic and Diluted Common Share and Unit

$0.49

$0.07

 

$0.64

($0.11)

Note:
(1) Pro forma statistics reflect the Company's 95 hotel portfolio owned as of June 30, 2022.
(2) Pro forma Hotel EBITDA for the three months ended June 30, 2022 and 2021 excludes $0.1 million net income and $1.4 million net loss, respectively, from sold hotels. Pro forma Hotel EBITDA for the six months ended June 30, 2022 and 2021 excludes $0.3 million net income and $4.6 million net loss, respectively, from sold hotels. Pro forma Hotel EBITDA for the three months ended June 30, 2021 includes $0.9 million net income from acquired hotels. Pro forma Hotel EBITDA for the six months ended June 30, 2021 includes $0.5 million net income from acquired hotels.

Operational Update

Lodging fundamentals continued to accelerate throughout the second quarter, benefiting from summer travel, ramping corporate and group demand, and stronger citywide attendance. These positive trends led to a significant step up in demand within urban markets, which has continued into July. RLJ’s Urban hotel RevPAR achieved the strongest growth during the second quarter, achieving 95% of 2019 levels in June. Improving corporate demand also drove positive momentum in weekday results which strengthened throughout the second quarter. These improving trends led the Company to achieve pro forma RevPAR of $146.05 and pro forma Hotel EBITDA of $118.6 million during the second quarter, which represented approximately 92% and 91% of 2019 levels, respectively, with each achieving new highs since the beginning of the pandemic. This positive momentum from the second quarter has continued into the third quarter.

Acquisition

In July, the Company acquired the fee simple interest in a 124-room boutique lifestyle hotel in Nashville for a purchase price of $59.0 million, or approximately $476,000 per key. The hotel is expected to generate an estimated 8.0% to 8.5% stabilized NOI yield and an accretive stabilized RevPAR nearly double that of the rest of the Company’s portfolio. The Company funded the acquisition with existing cash on its balance sheet.

Dispositions

As previously disclosed, during the second quarter, the Company sold the SpringHill Suites Denver North Westminster for gross proceeds of approximately $14.5 million. Year-to-date the Company has sold two hotel properties for combined sales prices of approximately $49.9 million.

Share Repurchases

During the second quarter, the Company repurchased approximately 4.2 million common shares for $50.0 million, at an average price per share of $11.93. As of August 4, 2022, the Company's share buyback program has $200.0 million of remaining capacity.

Balance Sheet

As of June 30, 2022, the Company had approximately $1.1 billion of total liquidity, comprising of $511.5 million of unrestricted cash and $600.0 million available under its revolving credit facility ("Revolver"), and $2.2 billion of debt outstanding. The Company has no debt maturities until 2023.

The Company has exited both the covenant waiver period and leverage relief period under its credit facilities. The impact of these exits includes the reinstatement of financial covenants, the elimination of the minimum liquidity financial covenant, the elimination of certain spending limitations, and reinstatement of the pre-waiver pricing grids.

Dividends

The Company’s Board of Trustees declared a quarterly cash dividend of $0.01 per common share of beneficial interest of the Company in the second quarter. The dividend was paid on July 15, 2022 to shareholders of record as of June 30, 2022. Subsequently, on July 29, 2022 the Company’s Board of Trustees also declared a quarterly cash dividend of $0.05 per common share of beneficial interest of the Company for the third quarter. The dividend will be paid on October 17, 2022 to shareholders of record as of September 30, 2022.

The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares in the second quarter. The dividend was paid on July 29, 2022 to shareholders of record as of June 30, 2022. Subsequently, on July 29, 2022 the Company's Board of Trustees also declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares for the third quarter. The dividend will be paid on October 31, 2022 to shareholders of record as of September 30, 2022.

2022 Outlook

Given continued uncertainties the Company is unable to provide a future outlook at this time.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on August 5, 2022 at 9:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust’s second quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company’s website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which is available through the Investor Relations section of the Company's website.

About Us

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section27A 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.

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.

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) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of its operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.

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 partnerships and 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 either outside the normal course of operations or extraordinary. 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, is beneficial to an investor’s understanding of its 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 taxes, and non-cash 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.

Pro forma Consolidated Hotel EBITDA includes prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels, which has not been audited and excludes results from sold hotels as applicable. Pro forma Hotel EBITDA and pro forma Hotel EBITDA Margin exclude the results of non-comparable hotels that were under renovation or not open for the entirety of the comparable periods. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Acquired hotels

For the three and six months ended June 30, 2022 and 2021, pro forma adjustments included the following acquired hotels:

  • Hampton Inn & Suites Atlanta Midtown acquired in August 2021
  • AC Hotel Boston Downtown acquired in October 2021
  • Moxy Denver Cherry Creek acquired in December 2021

Pro forma adjustments: Sold hotels

For the three and six months ended June 30, 2022 and 2021, pro forma adjustments included the following sold hotels:

  • Courtyard Houston Sugarland sold in January 2021
  • Residence Inn Chicago Naperville sold in May 2021
  • Residence Inn Indianapolis Fishers sold in May 2021
  • Fairfield Inn & Suites Chicago Southeast Hammond sold in July 2021
  • Residence Inn Chicago Southeast Hammond sold in August 2021
  • Courtyard Chicago Southeast Hammond sold in August 2021
  • Embassy Suites Secaucus-Meadowlands ground lease expired in October 2021
  • DoubleTree Hotel Metropolitan New York City sold in December 2021
  • Marriott Denver Airport at Gateway Park sold in March 2022
  • SpringHill Suites Denver North Westminster sold in April 2022

RLJ Lodging Trust

Consolidated Balance Sheets

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

(unaudited)

 
 

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

Investment in hotel properties, net

$

4,127,290

 

 

$

4,219,116

 

Investment in unconsolidated joint ventures

 

6,927

 

 

 

6,522

 

Cash and cash equivalents

 

511,481

 

 

 

665,341

 

Restricted cash reserves

 

44,281

 

 

 

48,528

 

Hotel and other receivables, net of allowance of $332 and $274, respectively

 

40,938

 

 

 

31,091

 

Lease right-of-use assets

 

142,213

 

 

 

144,988

 

Prepaid expense and other assets

 

60,096

 

 

 

33,390

 

Total assets

$

4,933,226

 

 

$

5,148,976

 

Liabilities and Equity

 

 

 

Debt, net

$

2,211,735

 

 

$

2,409,438

 

Accounts payable and other liabilities

 

139,115

 

 

 

155,136

 

Advance deposits and deferred revenue

 

18,583

 

 

 

20,047

 

Lease liabilities

 

121,609

 

 

 

123,031

 

Accrued interest

 

18,617

 

 

 

19,110

 

Distributions payable

 

7,995

 

 

 

8,347

 

Total liabilities

 

2,517,654

 

 

 

2,735,109

 

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, 2022 and December 31, 2021

 

366,936

 

 

 

366,936

 

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 162,981,820 and 166,503,062 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

1,630

 

 

 

1,665

 

Additional paid-in capital

 

3,053,345

 

 

 

3,092,883

 

Distributions in excess of net earnings

 

(1,044,726

)

 

 

(1,046,739

)

Accumulated other comprehensive income (loss)

 

24,594

 

 

 

(17,113

)

Total shareholders’ equity

 

2,401,779

 

 

 

2,397,632

 

Noncontrolling interests:

 

 

 

Noncontrolling interest in the Operating Partnership

 

6,325

 

 

 

6,316

 

Noncontrolling interest in consolidated joint ventures

 

7,468

 

 

 

9,919

 

Total noncontrolling interest

 

13,793

 

 

 

16,235

 

Total equity

 

2,415,572

 

 

 

2,413,867

 

Total liabilities and equity

$

4,933,226

 

 

$

5,148,976

 

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,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues

 

 

 

 

 

 

 

Operating revenues

 

 

 

 

 

 

 

Room revenue

$

280,676

 

 

$

166,554

 

 

$

486,455

 

 

$

269,326

 

Food and beverage revenue

 

31,154

 

 

 

12,983

 

 

 

52,055

 

 

 

19,225

 

Other revenue

 

18,671

 

 

 

14,717

 

 

 

34,890

 

 

 

25,255

 

Total revenues

 

330,501

 

 

 

194,254

 

 

 

573,400

 

 

 

313,806

 

Expenses

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Room expense

 

65,793

 

 

 

42,898

 

 

 

119,621

 

 

 

72,325

 

Food and beverage expense

 

21,770

 

 

 

8,709

 

 

 

37,939

 

 

 

13,265

 

Management and franchise fee expense

 

26,067

 

 

 

12,630

 

 

 

46,456

 

 

 

17,991

 

Other operating expense

 

76,888

 

 

 

56,883

 

 

 

145,542

 

 

 

106,003

 

Total property operating expenses

 

190,518

 

 

 

121,120

 

 

 

349,558

 

 

 

209,584

 

Depreciation and amortization

 

46,922

 

 

 

46,915

 

 

 

93,787

 

 

 

93,858

 

Impairment losses

 

 

 

 

 

 

 

 

 

 

5,946

 

Property tax, insurance and other

 

22,949

 

 

 

24,048

 

 

 

45,462

 

 

 

44,129

 

General and administrative

 

13,348

 

 

 

12,133

 

 

 

27,482

 

 

 

22,934

 

Transaction costs

 

136

 

 

 

195

 

 

 

198

 

 

 

255

 

Total operating expenses

 

273,873

 

 

 

204,411

 

 

 

516,487

 

 

 

376,706

 

Other income (expense), net

 

721

 

 

 

(9,720

)

 

 

8,006

 

 

 

(9,255

)

Interest income

 

347

 

 

 

220

 

 

 

519

 

 

 

604

 

Interest expense

 

(23,855

)

 

 

(26,366

)

 

 

(48,416

)

 

 

(54,261

)

(Loss) gain on sale of hotel properties, net

 

(364

)

 

 

103

 

 

 

1,053

 

 

 

1,186

 

Loss on extinguishment of indebtedness, net

 

 

 

 

(6,207

)

 

 

 

 

 

(6,207

)

Income (loss) before equity in income (loss) from unconsolidated joint ventures

 

33,477

 

 

 

(52,127

)

 

 

18,075

 

 

 

(130,833

)

Equity in income (loss) from unconsolidated joint ventures

 

283

 

 

 

60

 

 

 

405

 

 

 

(238

)

Income (loss) before income tax expense

 

33,760

 

 

 

(52,067

)

 

 

18,480

 

 

 

(131,071

)

Income tax expense

 

(558

)

 

 

(154

)

 

 

(748

)

 

 

(268

)

Net income (loss)

 

33,202

 

 

 

(52,221

)

 

 

17,732

 

 

 

(131,339

)

Net (income) loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

Noncontrolling interest in the Operating Partnership

 

(125

)

 

 

268

 

 

 

(21

)

 

 

664

 

Noncontrolling interest in consolidated joint ventures

 

(111

)

 

 

506

 

 

 

7

 

 

 

1,242

 

Net income (loss) attributable to RLJ

 

32,966

 

 

 

(51,447

)

 

 

17,718

 

 

 

(129,433

)

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(12,557

)

 

 

(12,557

)

Net income (loss) attributable to common shareholders

$

26,687

 

 

$

(57,726

)

 

$

5,161

 

 

$

(141,990

)

Basic per common share data:

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders - basic

$

0.16

 

 

$

(0.35

)

 

$

0.03

 

 

$

(0.87

)

Weighted-average number of common shares

 

163,539,446

 

 

 

163,996,003

 

 

 

163,857,785

 

 

 

163,911,475

 

Diluted per common share data:

 

 

 

 

 

 

 

Net income (loss) per share attributable to common shareholders - diluted

$

0.16

 

 

$

(0.35

)

 

$

0.03

 

 

$

(0.87

)

Weighted-average number of common shares

 

163,784,573

 

 

 

163,996,003

 

 

 

164,217,150

 

 

 

163,911,475

 

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,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

33,202

 

 

$

(52,221

)

 

$

17,732

 

 

$

(131,339

)

Preferred dividends

 

(6,279

)

 

 

(6,279

)

 

 

(12,557

)

 

 

(12,557

)

Depreciation and amortization

 

46,922

 

 

 

46,915

 

 

 

93,787

 

 

 

93,858

 

Loss (gain) on sale of hotel properties, net

 

364

 

 

 

(103

)

 

 

(1,053

)

 

 

(1,186

)

Impairment losses

 

 

 

 

 

 

 

 

 

 

5,946

 

Noncontrolling interest in consolidated joint ventures

 

(111

)

 

 

506

 

 

 

7

 

 

 

1,242

 

Adjustments related to consolidated joint ventures (1)

 

(49

)

 

 

(75

)

 

 

(98

)

 

 

(150

)

Adjustments related to unconsolidated joint ventures (2)

 

295

 

 

 

291

 

 

 

590

 

 

 

585

 

FFO

 

74,344

 

 

 

(10,966

)

 

 

98,408

 

 

 

(43,601

)

Transaction costs

 

136

 

 

 

195

 

 

 

198

 

 

 

255

 

Loss on extinguishment of indebtedness, net

 

 

 

 

6,207

 

 

 

 

 

 

6,207

 

Amortization of share-based compensation

 

5,470

 

 

 

4,848

 

 

 

10,654

 

 

 

7,600

 

Non-cash income tax expense

 

135

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

10,658

 

 

 

(5,866

)

 

 

10,658

 

Other expenses (4)

 

914

 

 

 

353

 

 

 

1,498

 

 

 

409

 

Adjusted FFO

$

80,999

 

 

$

11,295

 

 

$

104,892

 

 

$

(18,472

)

 

 

 

 

 

 

 

 

Adjusted FFO per common share and unit-basic

$

0.49

 

 

$

0.07

 

 

$

0.64

 

 

$

(0.11

)

Adjusted FFO per common share and unit-diluted

$

0.49

 

 

$

0.07

 

 

$

0.64

 

 

$

(0.11

)

 

 

 

 

 

 

 

 

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

 

164,311

 

 

 

164,768

 

 

 

164,630

 

 

 

164,684

 

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

 

164,556

 

 

 

165,242

 

 

 

164,989

 

 

 

164,684

 

Note:
(1) Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint ventures.
(2) Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint ventures.
(3) Reclassification of interest rate swap losses (gains) from accumulated other comprehensive income (loss) to earnings for discontinued interest rate hedges.
(4) Represents expenses and income outside of the normal course of operations, including $0.5 million and $0.8 million of non-cash interest expense related to discontinued interest rate hedges during the three and six months ended June 30, 2022, respectively.
(5) Includes 0.8 million weighted-average operating partnership units for the three and six month periods ended June 30, 2022 and 2021.

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,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

33,202

 

 

$

(52,221

)

 

$

17,732

 

 

$

(131,339

)

Depreciation and amortization

 

46,922

 

 

 

46,915

 

 

 

93,787

 

 

 

93,858

 

Interest expense, net of interest income

 

23,508

 

 

 

26,146

 

 

 

47,897

 

 

 

53,657

 

Income tax expense

 

558

 

 

 

154

 

 

 

748

 

 

 

268

 

Adjustments related to unconsolidated joint ventures (1)

 

408

 

 

 

408

 

 

 

815

 

 

 

818

 

EBITDA

 

104,598

 

 

 

21,402

 

 

 

160,979

 

 

 

17,262

 

Loss (gain) on sale of hotel properties, net

 

364

 

 

 

(103

)

 

 

(1,053

)

 

 

(1,186

)

Impairment losses

 

 

 

 

 

 

 

 

 

 

5,946

 

EBITDAre

 

104,962

 

 

 

21,299

 

 

 

159,926

 

 

 

22,022

 

Transaction costs

 

136

 

 

 

195

 

 

 

198

 

 

 

255

 

Loss on extinguishment of indebtedness, net

 

 

 

 

6,207

 

 

 

 

 

 

6,207

 

Amortization of share-based compensation

 

5,470

 

 

 

4,848

 

 

 

10,654

 

 

 

7,600

 

Derivative losses (gains) in accumulated other comprehensive income (loss) reclassified to earnings (2)

 

 

 

 

10,658

 

 

 

(5,866

)

 

 

10,658

 

Other expenses (3)

 

410

 

 

 

353

 

 

 

658

 

 

 

409

 

Adjusted EBITDA

 

110,978

 

 

 

43,560

 

 

 

165,570

 

 

 

47,151

 

General and administrative (4)

 

7,878

 

 

 

7,286

 

 

 

16,828

 

 

 

15,334

 

Other corporate adjustments (5)

 

(194

)

 

 

(829

)

 

 

(359

)

 

 

(316

)

Consolidated Hotel EBITDA

 

118,662

 

 

 

50,017

 

 

 

182,039

 

 

 

62,169

 

Pro forma adjustments - (income) loss from sold hotels

 

(106

)

 

 

1,362

 

 

 

(297

)

 

 

4,591

 

Pro forma adjustments - income from acquired hotels

 

 

 

 

889

 

 

 

 

 

 

512

 

Pro forma Hotel EBITDA

$

118,556

 

 

$

52,268

 

 

$

181,742

 

 

$

67,272

 

Note: Pro forma statistics reflect the Company's 95 hotel portfolio owned as of June 30, 2022.
(1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint ventures.
(2) Reclassification of interest rate swap losses (gains) from accumulated other comprehensive income (loss) to earnings for discontinued interest rate hedges.
(3) Represents expenses and income outside of the normal course of operations.
(4) Excludes amortization of share-based compensation reflected in Adjusted EBITDA.
(5) Other corporate adjustments include property-level adjustments and certain revenues and expenses at corporate entities. These items include interest income, amortization of deferred management fees, key money amortization, ground rent amortization, legal fees, revenues and expenses associated with non-hotel properties, income (loss) from unconsolidated entities, internal lease rent expense, and other items.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

 

Pro forma Hotel EBITDA Margin

 
 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Total revenue

$

330,501

 

 

$

194,254

 

 

$

573,400

 

 

$

313,806

 

Pro forma adjustments - revenue from sold hotels

 

(117

)

 

 

(6,927

)

 

 

(2,337

)

 

 

(11,145

)

Pro forma adjustments - revenue from prior ownership of acquired hotels

 

 

 

 

4,351

 

 

 

 

 

 

6,216

 

Other corporate adjustments / non-hotel revenue

 

(17

)

 

 

(18

)

 

 

(32

)

 

 

(38

)

Pro forma Hotel Revenue

$

330,367

 

 

$

191,660

 

 

$

571,031

 

 

$

308,839

 

 

 

 

 

 

 

 

 

Pro forma Hotel EBITDA

$

118,556

 

 

$

52,268

 

 

$

181,742

 

 

$

67,272

 

 

 

 

 

 

 

 

 

Pro forma Hotel EBITDA Margin

 

35.9

%

 

 

27.3

%

 

 

31.8

%

 

 

21.8

%

Note: Pro forma statistics reflect the Company's 95 hotel portfolio owned as of June 30, 2022.

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands)

(unaudited)

 
 

Loan

Base Term
(Years)

Maturity
(incl. extensions)

Floating / Fixed (1)

Interest Rate (2)

 

Balance as of June 30,
2022 (3)

Mortgage Debt

 

 

 

 

 

 

Mortgage loan - 1 hotel

10

Jan 2029

Fixed

5.06%

 

$

25,000

Mortgage loan - 7 hotels

3

Apr 2024

Floating

3.30%

 

 

200,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating

2.53%

 

 

96,000

Mortgage loan - 4 hotels

5

Apr 2026

Floating

3.43%

 

 

85,000

Weighted Average / Mortgage Total

 

 

 

3.25%

 

$

406,000

 

 

 

 

 

 

 

Corporate Debt

 

 

 

 

 

 

Revolver (4)

4

May 2025

Floating

 

$

$150 Million Term Loan Maturing 2024

2

Jun 2024

Floating

4.18%

 

 

100,000

$400 Million Term Loan Maturing 2023

5

Jan 2023

Floating

4.69%

 

 

52,261

$400 Million Term Loan Maturing 2024

5

Jan 2024

Floating

4.69%

 

 

151,683

$225 Million Term Loan Maturing 2023

5

Jan 2023

Floating

4.69%

 

 

41,745

$225 Million Term Loan Maturing 2024

5

Jan 2024

Floating

4.03%

 

 

72,973

$400 Million Term Loan Maturing 2025

5

May 2025

Floating

4.00%

 

 

400,000

$500 Million Senior Notes due 2026

5

Jul 2026

Fixed

3.75%

 

 

500,000

$500 Million Senior Notes due 2029

8

Sep 2029

Fixed

4.00%

 

 

500,000

Weighted Average / Corporate Total

 

 

 

4.04%

 

$

1,818,662

 

 

 

 

 

 

 

Weighted Average / Total

 

 

 

3.89%

 

$

2,224,662

Note:
(1) The floating interest rate is hedged with an interest rate swap.
(2) Interest rates as of June 30, 2022.
(3) Excludes the impact of fair value adjustments and deferred financing costs.
(4) As of June 30, 2022, there was $600.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually.

 

Sean M. Mahoney, Executive Vice President and Chief Financial Officer – (301) 280-7774
For additional information or to receive press releases via email, please visit our website: http://www.rljlodgingtrust.com

Source: RLJ Lodging Trust